Fire, pricing error weigh on company's performance
U.S. carmaker Tesla reported a larger-than-expected loss of more than $700 million in the first quarter, a result that one analyst said reflected poor strategic choices.
"It's like Tesla has a handful of good cards, but they have played it badly," Zhang Zhiyong, founder of the Beijing-based car data service provider iwenfeng.cn, told the Global Times Thursday.
According to a financial statement released by Tesla Wednesday, the company lost $702 million in the first quarter this year, or $2.9 per share, after posting profits for two consecutive quarters in the second half of 2018.
The figure compared with a $1.3 loss per share that was expected by analysts in an earlier Bloomberg poll.
For the quarter, Tesla generated $4.5 billion in revenue, which was down from $7.2 billion in the previous quarter, but up from $3.4 billion in the first quarter of 2018.
Analysts polled by Bloomberg forecast revenue of $4.84 billion for the quarter.
Tesla's deliveries of Model S and Model X cars slumped 45 percent year-on-year in the first quarter to 12,091, but deliveries of Model 3 cars surged by 522 percent to 50,928, according to the statement.
Tesla didn't disclose its performance in specific markets like China or the U.S..
"With Tesla's lead in technologies, it should have done much better," Zhang told the Global Times.
According to Zhang, Tesla's slipping performance in the first quarter was largely due to faulty business strategies.
"Their random price changes in March triggered an outcry among customers, and many potential buyers decided to wait and see, which had a negative impact on the company's sales," Zhang said. Also, Tesla's strategy of cutting showroom sales channels did much to diminish the company's brand influence. Particularly, car buyers in China want to see actual vehicles, Zhang said.
The U.S. carmaker is also facing pressure from unexpected events, such as a case of spontaneous combustion, after a Model S car was destroyed by a fire in Shanghai Sunday night.
Tesla has convened experts to study the reason for the incident. As of press time, the investigation was in progress with no conclusion yet reached, a person close to Tesla told the Global Times.
Zheng Jiatu, deputy managing director of the China Electric Vehicle Charging Technology and Industry Alliance, told the Global Times Thursday that such events were very likely caused by battery problems, but there can be various specific causes such as water leaks.
A Tesla owner surnamed Wang said that the chances of such events are very small compared with traditional gasoline-fueled cars. "I feel confident about Tesla cars... the incident does not affect me," she told the Global Times on Thursday.
Another Model 3 owner surnamed Zhang also said that the incident wouldn't taint Tesla's reputation in her mind. "It's inevitable that problems would emerge as new technologies develop. I don't think the development of new-energy car technologies should be put off by those problems, "she said.
Zhang Zhiyong said that isolated case should not have too much impact on Tesla's overall business. "If the company can solve its strategic mistakes, it won't have any rivals in the new-energy car sector," he said.
Tesla affirmed in the financial report that its goal of 360,000 to 400,000 vehicle deliveries in 2019 has not changed.
The company also stressed that its second-generation Model 3 line, which will be set up in its Shanghai-based Gigafactory 3 now under construction, will be at least 50 percent cheaper per unit of capacity compared with other Model 3 lines.
