By Jacob Davis
CSMS Magazine
As the struggle to save our planet against global warming moves to higher gear, industrial nations have been hard at work trying to abide by the Paris Climate Agreement. Reducing carbon emission into the atmosphere is a key component in the agreement. Thus, comes the role of electric-powered vehicles. Gasoline-powered vehicles bear the share of the blame for pollution in the atmosphere. According to US Energy Information (EIA), in 2019, total U.S. CO2 emissions from aviation and motor gasoline combustion were about 1,139 million metric tons, or about 22% of total U.S. energy-related CO2 emissions. A typical passenger vehicle emits about 4.6 metric tons of carbon dioxide per year. This assumes the average gasoline vehicle on the road today has a fuel economy of about 22.0 miles per gallon and drives around 11,500 miles per year. Every gallon of gasoline burned creates about 8,887 grams of CO2.
Not surprisingly, electric vehicles are increasingly becoming the new players in the auto industry. Like in every industry, there are leaders, and albeit Tesla, the giant US EV maker and its flamboyant leader Elon Musk, China has taken the lead in the revolution. Below is an excerpt from an article written by Ed Carson for Business Insider.
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On Saturday, Tesla (TSLA) reported fourth-quarter deliveries and production figures, with deliveries nearly hitting the 500,000 full-year target. China EV maker startup Li Auto (LI) announced booming December sales. On Sunday, China EV makers Nio (NIO) and Xpeng (XPEV) reported fast-rising December deliveries. BYD Co. (BYDDF) also should report December figures in the next few days.
Tesla and Nio stock were two of 2020’s biggest winners, with Xpeng, Li Auto and BYD also delivering triple-digit gains.
Tesla Deliveries Soar
Tesla deliveries for the fourth quarter jumped to 180,570, well above the previous best of 139,300 in Q3. That brought full-year Tesla deliveries total to 499,550, essentially in line with the EV maker’s target for 500,000.
Wall Street analysts officially expected Tesla deliveries of around 174,000 in Q4. But forecasters with a better track record predicted Tesla deliveries of roughly 183,000. CEO Elon Musk raised expectations less than a week ago, saying Tesla was on the cusp of the “historic milestone” of 500,000 deliveries.
Tesla produced 179,757 vehicles in the fourth quarter, for a full-year total of 509,737.
Tesla does not break down sales and output by region, but China was clearly a big driver of growth in Q4 and the full year. Industrywide data will provide December China production and sales figures for Tesla in the coming weeks. There are early indications that Tesla’s China sales were roughly 30,000 in December, for about 65,000 in the quarter.
If so, that could suggest weaker-than-expected sales in the U.S.
In Q4, Tesla delivered 161,650 Model 3 and Model Y cars and produced 163,660. It delivered 18,920 Model S and X vehicles and produced 16,097 of them.
On Jan. 1, Tesla said it would start delivering the made-in-China Model Y this month, setting a base price of 339,900 yuan ($52,074). The Nio EC6, which starts at 368,000 yuan ($52,542), though the Nio crossover gets a 2021 subsidy of 18,000 yuan because of its battery-swap capability. The Model Y crossover also will compete with the soon-to-debut Volkswagen (VWAGY) ID.4. The VW ID.4 launched in Europe last month and will reach the U.S. in March.
Meanwhile, Tesla cut prices of its MIC Model 3 vehicles yet again. It trimmed prices on its base SR+ and slashed prices on the higher-end Performance variant, while pulling the mid-level LR from its website. China OK’d the Performance variant for a 10% purchase tax cut.
Tesla Stock
Clearly, investors have been expecting strong Tesla deliveries for 2020 and years to come.
But in premarket trading, Tesla stock rose 2%, signaling yet another record high.
Tesla stock rose 1.6% on Thursday, closing out a mammoth 743% surge in 2020. TSLA stock is well extended from any conceivable buy point.
China EV Sales
Nio sales in December rose to 7,007, up 32.4% vs. November and 121% vs. a year earlier. Full-year sales reached 43,728.
Nio’s top-selling electric vehicle is now the EC6 crossover, which just began deliveries a few months ago. In December, the Model Y rival had sales of 2,505. The ES6 SUV had 2,493 deliveries while the larger ES8 had 2,009. In November, Nio sold 2,386 ES6 vehicles, 1,518 EC6 crossovers and 1,387 ES8 SUVs.
Nio also announced a new used-car business, selling pre-owned Nio vehicles. The company plans to invest billion yuan ($459.21 million) into Nio Certified over five years.
The EV maker will hold its annual Nio Day Jan. 9, where it will unveil at least one sedan, battery technology and more. The sedan is likely to be a rival to the Tesla Model, the Xpeng P7 and BYD Han EV.
Xpeng reported December sales of 5,700, up 35% vs. November and 326% a year earlier. That includes 3,691 P7 sedans, which only launched in mid-2020, and 2,009 G3 compact SUVs. Xpeng has begun making a few deliveries of its G3 small SUV in Norway. It’s unclear if those are included in these figures.
Li Auto sales hit 6,126 in December, up 31.9% vs November. That was up 529.6% vs. December 2019, when Li Auto was just starting deliveries of its Li One SUV. For all of 2020, Li Auto sold 32,624 Li One vehicles, which have a tiny gas engine to extend range.
BYD Co. is due to report December deliveries over the coming days.
All four Chinese EV makers, along with Tesla, saw big China sales gains in November. One factor is Shanghai, which has a free license plate policy for new energy vehicles, including EVs, hybrids and fuel-cell vehicles. Many Chinese cities limit the number of license plates, providing the right to own a car, and they are quite expensive. The NEV free license policy was due to end in 2020, but on Dec. 30 Shanghai extended that through February.
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Jacob Davis is a contributing editor for the magazine. He’s not a financial advisor. Therefore, his articles are only meant to inform, not to give financial advice.
