Auto parts manufacturers welcome development opportunities

The "Tesla Effect" is stirring up a spring of China's new energy vehicle market. Recently, Nicholas Lithium's question on the investor interaction platform for “Whether Tesla visited the company recently” stated that the news is true and Tesla has sent personnel to visit the company. Analysts believe that Tesla is a representative global leading company in the field of new energy. If the products of listed companies smoothly enter its supply chain system, the rapid increase in the number of new energy vehicle models in the future is expected to contribute considerable performance flexibility to the company.

The performance of auto parts companies rose sharply

With the implementation of the model 3 mass production plan, Tesla’s news of China’s construction of its factory and industrial chain in China continued to affect the nerves of the A-share market. At present, China's listed companies enter Tesla's industrial chain in two major ways: One is to become a first-tier supplier directly, such as Xusheng Group, Tianqi Model, Guangdong Hongtu, Ningbo Huaxiang, Yi'an Technology, etc.; One is indirect support for the first-tier suppliers, such as the quality of the motor, the pilot intelligence, the new state and other states.

Among the directly-supported suppliers, Xu Sheng shares the highest value of bicycles, reaching around 3,400 yuan. The company started cooperation with Tesla in 2013, which directly boosted its auto parts business. The company supplies and supplies components for Tesla, and gradually expands from the supply of common components to the core components such as transmission systems and battery systems. From 2014 to 2016, the sales of Xusheng shares to Tesla accounted for 15.41%, 50.27% and 56.61%, respectively. In the future, the production volume of Model 3 will significantly increase its performance.

In addition, as a top-tier supplier of mold design and manufacturing services, Tianqi Mould has provided Tesla with over 50 million yuan in mold revenue over the past two years, and Model 3 is also in talks.

According to industry insiders, Tesla's mass production has brought huge demand for parts and components. Domestic companies are willing to enter Tesla's domestic industrial chain and share the scale bonus and brand effect.

However, some analysts believe that although there are a few domestic companies that have entered Tesla's supply chain system, most of them have not yet conducted actual cooperation with Tesla, or the scale of cooperation is small. However, due to Tesla's "catfish effect" in the new energy automotive industry, Tesla-certified listed companies will gain advantages in the supply of domestic new energy automobile industry chains, thereby realizing improved performance.

Foreign investment component substitution is expected to be localized

Industry insiders believe that as a global leader in new energy vehicles, after Tesla enters China, the supply chain will likely shift to the Chinese market, and listed companies that directly or indirectly enter the Tesla supply chain system may benefit.

From the perspective of supply chain operations, Tesla's core technology suppliers are mostly from companies in Japan, the United States, and the European Union. Most Chinese companies enter the system as secondary material suppliers. For example, in the lithium battery supply chain, there is currently no A-share listed company that is directly supplied to Tesla. Domestic listed companies are indirectly involved in supply chain systems by supplying Tesla Panasonic, Panasonic’s “Queen” battery supplier. Such as new cosmopolitan, China Baoan subsidiary Bertray, pilot intelligence and so on. Judging from the battery management system aspect, both Winstronics's subsidiary Pruri and Sanhua Intelligent Control are Tesla parts suppliers.

At present, China's Tesla suppliers are mainly concentrated in the body and parts. For example, Guangdong Hongtu and Tianqi Mould are suppliers of the body and mold; Tuopu Group, as the core supplier of aluminum alloy chassis components, is expected to increase its performance through supporting model 3.

In addition, in the in-vehicle infotainment system, NavInfo is a new map component, and Dafu Technology and Chunxing Jinggong work as antenna components. All of them are model 3 suppliers.

Essence Securities believes that although Tesla's parts procurement is globalized, only a few domestic auto parts manufacturers have entered the Tesla supply chain system, but after Tesla's localization, domestic auto parts manufacturers will hopefully achieve Tesla's full replacement of foreign parts and components, ushered in rapid growth in performance can be expected.