HomeWorld NewsTesla: head of China market becomes company's No. 2

Tesla: head of China market becomes company’s No. 2

The fact that the Chinese market was important to Tesla had been understood for some time, although that it was of such importance that the head of the Chinese market was given the second most important position in the company was not obvious to most. 

Today Reuters reports that Tom Zhu, i.e., Tesla’s head in China, has taken over as head of sales, service and delivery in North America, citing unnamed but inside sources. In this way, Zhu becomes the automaker’s number two, after CEO Elon Musk. 

Moreover, Zhu also remains vice-president in charge of Asia/Pacific, so a lot of power is focused on his name, precisely at a time when Musk is devoting a great deal of time to Twitter after buying the famous social network company, and embarking on a major restructuring. 

Reuters also reports that Zhu has been visiting Tesla plants in California and Texas, along with his Shanghai team, generating some discontent. 

Tesla’s sales in 2022

The fourth quarter of 2022 for Tesla ended with new all-time highs in production and deliveries of its electric vehicles around the world, but still disappointing investor estimates due to logistical problems, slowing demand, rising interest rates, and recession fears.

A total of 439,000 cars were produced in the quarter, and 405,000 were delivered. Markets, however, had forecast 420,000 deliveries in the quarter, for a total of 1.34 million over the year, up 43% from 2021. 

Total 2022 deliveries in the end were 1.31 million or slightly below expectations, up 40% from the previous year. On the other hand, it is worth noting that production increased by 47%, which is slightly more than expected. 

The fact is that Elon Musk had promised a 50% increase in deliveries over 2021, when they were just under one million, so the actual results fell short of both promises and investors’ expectations, while remaining record highs. 

The asset on the stock market

It is no coincidence that today Tesla’s share price on the stock market is again losing heavily, despite yesterday’s recovery. 

2022 was the worst year ever in this respect, but 2023 did not seem to be off to a bad start. 

Over the past year, Tesla’s share price plunged from $382 to $123, a loss of nearly 68%, and even touching a low below $110. 

The year 2023 started with +4% yesterday in the European markets while the US markets were still closed for holidays, but already today in the European markets the stock is losing more than 5% due to the lower-than-expected fourth quarter data. 

It has to be said that today’s very negative reaction of the markets seems a little excessive, given that the actual results were a little lower than expected (+40% sales instead of +43%), and given that these are still record results. 

However, Tesla’s stock over the past few years has risen too much, and now it is probably discounting the bursting of the speculative bubble that swelled in 2021. 

In truth, while the comparison with 2021 looks truly merciless, the comparison with 2020 is still largely positive. 

In fact, at the beginning of 2020, Tesla’s share price was only $28, rising to over $230 by the end of the year. The current value of about 123% is also much lower than that at the end of 2020, but it is enormously higher than at the beginning of 2020. 

The speculative bubble on Tesla’s stock began to swell in November 2020, when from about $135 the price skyrocketed to nearly 300% in just over two months. 

What is surprising is that the current price is below even the $135 of October 2020, and this is perhaps due to excessive fear. 

During 2021, at the height of the bubble, the price then soared as high as over $400, and then began its slow descent toward $120. 

It seems really rather strange that in the face of the best year ever for car production and delivery, Tesla’s stock price is back to what it was in September 2020, when production and sales were enormously lower, partly because of the ongoing pandemic. 

It is worth adding, however, that compared to the stocks of other large automakers Tesla still has higher multiples, with a seemingly unjustifiably high capitalization-to-sales ratio. Perhaps an excess of enthusiasm partly generated by Musk’s over-promises has weighed in recent years. 

Marco Cavicchioli
Marco Cavicchioli
Born in 1975, Marco has been the first to talk about Bitcoin on YouTube in Italy. He founded ilBitcoin.news and the Facebook group" Bitcoin Italia (open and without scam) ".