CCTV Transcripts

CCTV Script 08/01/20

— This is the script of CNBC's news report for China's CCTV on January 8, 2020, Wednesday.

Tesla's stock price closed up 3.88% to $469 per share overnight after the delivery event of Shanghai Gigafactory. From the one-year trend of its stock price we can tell that in the past half year, Tesla continued to rise and almost double, not its market value is around $8.5m, which is almost equal to the combination of GM and Ford.

In comparison, GM and Ford didn't perform as good as Tesla last year.

When Musk danced to celebrate the delivery event, GM made an announcement Tuesday, saying it sees a market downturn and sales in china also face challenges. The Wall Street still hold an optimistic view to Tesla, even though it has yet to turn a profit for its full fiscal year. Leading analysts' top price target for tesla is $556 that means there is still about20% to go up.

One of the supporting factors of this bullish sentiment if Tesla's China strategy. How important is China to Tesla? Experts used a keyword to explain it: "gamechanger". On the one hand, China market is significant to Tesla.

Gene Munster

managing partner and co-founder of Loup Ventures

"China's the largest [electric vehicle] market in the world, 60-70%. … The average EV sells for about 15,000 U.S. dollars, and so well below [Tesla's cheapest model, the Model 3]. But I think the right analogy here is what's happened with Apple. Their China business right now is 17% of total Apple revenue. And right now, China, for Tesla, in the most recent reported quarter, the September quarter, was 11%. And so they're not going to hit the sweet spot of the China market — they're just too expensive — but I think that if you start to put the pieces together and say that they can have, call it, 17% of Tesla's businesses in China, you start to build a model out where you can grow their business at 20% year over year.

On the other hand, it is generally believed that the real competitor to EVs will come from China, so Musk didn't choose Detroit, but Shanghai.

Currently, the delivery speed and cost control in Shanghai Gigafactory surprise the Wall Street, Musk also said they plan to invest on small E-SUV in China and launch a design center to create "original car" to sell it worldwide.

What the Wall Street most focuses on now is Tesla's market locating and pricing strategy in China. Currently, traditional automakers have got into the EVs area, which is the market with the fiercest competition. Tesla locates itself as high-end car or EV? How much it could change in price? Will there be more low-end cars? We will keep an eye on these issues.

Craig Irwin

senior research analyst at Roth Capital Partner

"The big question is whether or not this is a comp to the luxury vehicle market in China or if it's more of a comp to the EV vehicles in China. So, most people looking at Tesla are assuming that it's really to the EV vehicles, and no, it's not comparable to the vast majority of vehicles that are being sold as EVs in China today. To the luxury vehicles? Yeah. There's a lot of tier-one automotive companies that make most of their money, actually, selling into China. So, Tesla's going to have to aim to compete against them rather than take a pre-existing slice out of the EV market. ... I think Tesla operates in a vacuum. I think that they're going to be strong competition, and I can't think of a stronger signal to Detroit of, 'Hey, we want credible EVs' as the market cap dislocation in Tesla right now."