It has been more than a year since the factory was put into production in January 2020.
This year, Tesla also walked out of an unprecedented road of rapid expansion of sole proprietorship.
According to the latest sales data, in 2020, the sales volume of Tesla’s only model 3 in China has exceeded that of most new energy vehicle companies, reaching 140000.
In addition, Tesla’s capacity layout is also rapidly expanding. In addition to the capacity of Shanghai Super factory phase II, Tesla Shanghai Super charging pile factory was officially completed and put into operation on February 3. It is worth mentioning that the project only takes less than half a year from the establishment to completion.
Under the rapid expansion, Tesla is also controversial. Whether it is the shock of the whole market caused by frequent price reduction, or spontaneous combustion, out of control and other events, there is no lack of its shadow.
It’s undeniable that Tesla has become the best in China. What does this mean for joint ventures that are about to lose their “protective cover”?
Wechatimg175.jpeg image source: unsplash
Just a few days ago, the alarm went off again.
On January 26, a spokesman for the Ministry of industry and information technology said at a press conference of the state information office that in 2022, restrictions on foreign investment in automobiles will be fully liberalized according to the original schedule.
In other words, in less than 10 months, all the apparent restrictions on foreign investment in the automobile industry will be completely lifted. For the automobile enterprises that are still used to relying on foreign enterprises for profits and sales, they should feel a strong sense of crisis, whether they are themselves or their joint venture brands.
“The better Tesla develops, the greater the pressure will be on joint venture auto companies after the stock ratio is released, because it means that foreign auto companies can live well in the Chinese market even without China, which is a very dangerous signal.” A few days ago, a person in the deep industry told time finance.
Like a fish in water, but also controversial
In 2020, Tesla, the “giant catfish”, will officially enter China. It will not only stir up the spring water of the electric vehicle market, but also impact the inherent ecology of China’s automobile industry.
The first shock came from the voice of the national development and Reform Commission.
In July 2018, after the national development and Reform Commission announced the abolition of joint venture restrictions on new energy vehicles and special purpose vehicles, Tesla announced that it would enter China as a sole proprietorship and build a Mega factory in Shanghai for localized production.
nimg.ws .126. net.jpg Shanghai Super factory source: Network
Subsequently, Tesla expanded rapidly in the Chinese market.
In the past 2020, Tesla sold nearly 500000 electric vehicles in the world, while the model 3 model produced in Shanghai sold nearly 140000 vehicles in the Chinese market, accounting for nearly 30% of Tesla’s global sales.
China is gradually becoming Tesla’s most important market in the world.
Looking back on the development history of China’s automobile industry, few joint venture automobile enterprises can match Tesla and reach such a development scale in such a short time after localization.
The reasons are worth pondering.
It is worth mentioning that even if it is a sole proprietorship, Tesla still has a high degree of support from the local government.
“For local governments, leading auto companies like Tesla, even if they can’t join the joint venture, will rush to get it, which will be of great help to local taxes, GDP, employment opportunities, and the introduction of industrial chain.” A person in the industry said.
The conditions Shanghai has offered Tesla are indeed favorable. From nearly 10% off the land price of the plant (140 million US dollars, 214 acres), plus 10 billion scale of Chinese bank loans, as well as state-owned enterprise level interest rate concessions, all reflect the sincerity of Tesla.
However, Tesla will have to pay a price to obtain the above favorable conditions. First, Tesla Shanghai Super factory will have to pay taxes of 2.23 billion yuan per year from 2023. If it fails to achieve the corresponding goal, it will have to return the land. Second, Tesla must also promise to invest about 14 billion yuan in its Shanghai factory within five years.
A487a9752dbc4d81a2fc859840e27f63.jpg Shanghai Super factory foundation map source: Network
From the foundation laying in January 2019 to the trial production in January 2020, Tesla Shanghai factory has completed the land purchase, government approval, factory construction, equipment import and trial production in a short period of one year.
Even in China, such production speed is beyond the imagination of the industry.
“Generally, it takes two years for the whole process to be completed. Tesla’s speed from approval of construction to production is indeed beyond expectation, which may be closely related to the” green light “acceleration of relevant departments,” a person familiar with the factory construction of automobile enterprises told Time Finance on February 1.
However, under the rapid expansion, the dispute also follows. From the dissatisfaction of old users caused by repeated sharp price cuts after the localization of products, to the concerns of consumers caused by out of control and spontaneous combustion of vehicles, and to the name of Xinhua outlets recently caused by “throwing pot type public relations”, Tesla has been highly controversial.
Whose cheese did you pry?
What’s more worth thinking is, what does Tesla mean to the Chinese enterprises that are about to lose the joint venture protection restrictions when it is marching forward in the solely owned track?
“The better the development of Tesla, the more dangerous the joint venture vehicle enterprises are,” some people in the industry expressed concern to time finance.
Many people in the industry have expressed similar views. In their view, Tesla’s sole proprietorship development model also provides a path for other foreign brands to leave the joint venture.
As a “joint venture mode” with decades of history, the importance of joint venture automobile enterprises for the development of China’s automobile industry can not be ignored. It has made a lot of contributions to the cultivation of talents, the cultivation of market, the cultivation of vehicle supply chain and the development of independent brand automobile manufacturing technology. At the same time, the joint venture also has the advantages of local operation and government relations.
However, with the improvement of market regulations and the change of competitive environment, the advantages of the original localization operation and government relationship of the joint venture are no longer prominent. On the contrary, the shortcomings of the decision-making efficiency of the joint venture are gradually emerging.
“Due to the checks and balances between Chinese and foreign shareholders, the decision-making efficiency of joint venture auto companies is definitely lower than that of wholly-owned auto companies. Therefore, Tesla’s rapid development will strengthen the determination of some auto brands to be wholly owned in China,” the person told Time Finance on February 2.
Although in the current composition of the share ratio of most joint venture automobile enterprises, most of the shares of the Chinese side and the foreign side account for 50:50. But in fact, China’s position in the joint venture is still obviously weak in terms of both the dominant power and the distribution of interests.
We have to admit the fact that, through the development of joint venture brands in recent decades, China is in a weak position in terms of actual business benefits, and the vision of “market for technology” has not been fully realized.
“The core assets of the enterprise are brand and technology, which are not owned by the joint venture at present, so the negotiation pressure will be great,” a person familiar with the joint venture told time finance.
In addition, the joint venture still needs to pay a huge amount of product technology development expenses to the foreign party, and bear the pressure of manufacturing equipment investment and the responsibility of product recall and quality claim. In other words, China’s profit margin will be compressed.
Therefore, the above-mentioned people are not optimistic in the face of the upcoming full liberalization of share ratio in 2022. “Unless your own brands are well developed, especially the intelligent network and electric vehicles, there is still a little consideration and possibility of game, otherwise the so-called relationship between channels and the government is not the core competitiveness.”.
However, some professionals believe that the prospect of the joint venture is not too pessimistic, at least in the short term, this change will not happen quickly.
On February 2, Ren Wanfu, an industry analyst, told time finance, “most of the joint ventures will not change in the short term. On the one hand, the contract term of some joint ventures is still relatively long, and there is still a period of time before the expiration; on the other hand, the change of share ratio will make the foreign party pay a higher time cost and capital cost. Moreover, the automobile industry is undergoing a period of change, so it is better to be in the market It’s better to set up a new portal in the field of new energy than to toss about in the field of traditional fuel vehicles. ”
The foreign giants have begun to act.
Among them, the German brand is the most frequent. At present, including Volkswagen, Audi, BMW and other brands have actual action.
For example, in the joint venture recently established between Audi and FAW, the ratio of shares of Audi and FAW is 60:40, and Audi has taken the lead. In addition, the original “Jianghuai Volkswagen” was officially renamed as Volkswagen (Anhui) Co., Ltd. by the end of 2020. Through capital increase, Volkswagen China has a 75% share in the company. In addition, German luxury brand BMW signed an agreement in advance as early as 2018 to increase the share ratio to 75%, and the agreement will come into effect in 2022. Mercedes Benz has also repeatedly heard about its intention to increase the equity of joint ventures in China.
169A39495E376A264083E5E3C9888315E02883A3_ size78_ w1080_ H608.jpg Audi FAW project contract source: Network
From the overall market point of view, compared with the German system, which has shown its ambition to share, the Japanese system, which is also developing strongly in the Chinese market, is obviously more cautious. No matter Honda, Toyota, or Nissan, there is no sign of expanding the share ratio.
In addition, we can see that most of the changes in the share ratio are concentrated in the relatively weak development of joint ventures, such as JAC and brilliance, and are mainly concentrated in the field of new energy, less in the field of traditional fuel vehicles.
“In the final analysis, enterprises focus on efficiency, the efficiency of operation and the ultimate efficiency of capital. Sole proprietorship is certainly the best, but there is a cost problem in the process of this game. ” Some people engaged in strategic research of automobile industry told time finance.
As for the current relatively stable situation of Japanese joint venture, it said, “different enterprises have different ways of doing things. On the one hand, the Japanese department may be more cautious in its development strategy compared with the German department. On the other hand, in the field of new energy, the Japanese department pays more attention to the current non mainstream hybrid market, and its judgment on the development of pure electric vehicles is still relatively conservative, so it has little action.”