[True Burn Finance] April 22 Noon Briefing: Tesla follows up with price cuts; new energy vehicle price war intensifies

"The price war in the new energy vehicle market continues to heat up, intensifying competition. On April 21, Tesla China announced price cuts of 14,000 yuan across its entire Model 3, Y, S, and X lineup in mainland China. The starting price of the Model 3 has been reduced to 231,900 yuan, only 16,000 yuan more expensive than the Xiaomi SU7 standard version. In fact, since April, multiple new energy vehicle brands have announced price reductions, affecting many new models. Intel has launched a large-scale neuromorphic system; Li Auto announced price cuts across its entire product line, with the highest reduction reaching 30,000 yuan."

Key News

Intel Launches Large-Scale Neuromorphic System$Intel(INTC.US)

l According to Xinhua News Agency, on April 21, Intel Corporation announced the launch of a large-scale neuromorphic system named Hala Point, aimed at supporting cutting-edge research in brain-inspired artificial intelligence and addressing challenges in AI efficiency and sustainability.

l Intel revealed that the Hala Point system will be delivered to Sandia National Laboratories, marking the first deployment of Intel's shared large-scale neuromorphic research system. This development has attracted significant attention from the global scientific community, as brain-inspired AI is considered the "crown jewel" of scientific research.

l Among the subfields of brain-inspired AI, "brain-computer interfaces" and neurotechnology devices are two key areas. Brain-computer interfaces have enormous market potential. According to a McKinsey report, the global annual market size for brain-computer interfaces could range from $70 billion to $200 billion (approximately 510 billion to 1.4 trillion yuan) between 2030 and 2040.

l In the A-share market, Tianfeng Securities research reports suggest that the brain-computer interface industry has broad prospects, with a focus on potential application scenarios. Leading overseas companies are rapidly advancing their technologies, while domestic companies are also making frequent breakthroughs.

l Minmetals Securities research reports indicate that brain-computer interfaces, as an emerging industry, primarily consist of hardware and software layers. The hardware layer includes EEG acquisition devices and external control devices, while the software layer involves biosignal analysis, core algorithms, communication computing, and security and privacy. Chinese companies are involved in all these technologies.

Tesla Joins Price Cuts as New Energy Vehicle Price War Intensifies$Tesla(TSLA.US)

l The price war in the new energy vehicle market continues to escalate, further intensifying competition. On April 21, Tesla China announced price cuts of 14,000 yuan across its entire Model 3, Y, S, and X lineup in mainland China. The starting price of the Model 3 has been reduced to 231,900 yuan, only 16,000 yuan more expensive than the Xiaomi SU7 standard version. In fact, since April, multiple new energy vehicle brands have announced price reductions, affecting many new models.

l Experts suggest that with the upcoming Beijing Auto Show and the release of new products, market supply will further diversify. "The policy of replacing old cars with new ones will gradually take effect, coupled with the launch of multiple new models, which is expected to boost sales in the second quarter."

l Tesla's price cuts of 14,000 yuan across its Model 3, Y, S, and X lineup mark the second large-scale price reduction in mainland China this year. On April 21, Tesla China's website showed that the starting price of the refreshed Model 3 has been reduced to 231,900 yuan, while the long-range version starts at 271,900 yuan. Reporters noted that the refreshed Model 3 has seen a price cut of nearly 30,000 yuan this year.

l Meanwhile, the starting price of the Model Y rear-wheel-drive version has been reduced to 249,900 yuan, the long-range version to 290,900 yuan, and the performance version to 354,900 yuan. The Model Y has undergone multiple price adjustments in mainland China this year. On April 20, Tesla's U.S. website showed that all Model Y variants in the U.S. market were reduced by $2,000.

l Tesla's large-scale price cuts may be related to its lower-than-expected Q1 deliveries. In Q1, Tesla's deliveries declined for the first time in nearly four years, with 387,000 vehicles delivered, far below market expectations of 458,500.

l Additionally, Tesla recently announced a global workforce reduction of 10% to cut costs and improve productivity, affecting approximately 14,000 employees. Analysts suggest that after the decline in Q1 2024 deliveries, Tesla's Q2 deliveries may drop again.

l In Q1 2024, Tesla China delivered 221,000 vehicles, accounting for nearly 60% of Tesla's global deliveries. After the 2024 Chinese New Year, the price war in China's new energy vehicle market intensified. Industry insiders believe Tesla's large-scale price cuts are a response to fierce market competition.

Li Auto Announces Price Cuts Across Entire Product Line: Up to 30,000 Yuan Reduction$LI AUTO-W(02015.HK)

l On April 22, Li Auto announced that starting April 22, 2024, the 2024 Li L7, Li L8, Li L9, and Li MEGA will adopt a new pricing system. Both new orders and existing orders yet to be delivered will enjoy the new prices.

l The price list shows that the Li L9 lineup, as well as the top and mid-tier Li L7 and Li L8 models, will see price cuts of 20,000 yuan, while the entry-level Li L7 and Li L8 Pro models will be reduced by 18,000 yuan. The Li MEGA will see the largest cut of 30,000 yuan.

l Li Auto also stated that it will provide cash rebates to owners of the 2024 Li L7, Li L8, Li L9, and Li MEGA who have already taken delivery. Notifications for these rebates will be sent via the Li Auto app.

Today's Forex and Commodity Updates

EUR/USD: ECB Council Member Müller Suggests Multiple Rate Cuts After June

l Madis Müller, a member of the ECB Council and Governor of the Bank of Estonia, stated that after the ECB's potential first rate cut in June, it should not rush into further cuts.

l The ECB should proceed cautiously and avoid loosening monetary policy too quickly, waiting for economic data to provide the necessary confidence that inflation is sustainably approaching its target.

l As long as economic conditions align with expectations, it would be appropriate to implement several more rate cuts after June until the end of the year.

l The timing and number of rate cuts will depend on economic developments.

l The speech had little impact on the euro's market performance. The EUR/USD pair traded at 1.0655, remaining flat throughout the day.

Precious Metals: Tin Prices Hit Near 2-Year High, Boosting Prospects for Tin Mining Companies

l Over the past week, the non-ferrous metals market has remained active, with tin prices reaching their highest level since June 2022. On April 19, LME tin surged 5.23%, with a cumulative increase of 13.24% over the last three trading days. The domestic Shanghai tin futures contract rose 5.48% overnight, reaching 281,950 yuan per ton.

l Other base metals also performed strongly. The rise in non-ferrous metal prices is driven by both supply and demand factors, with tin showing particularly notable gains due to supply disruptions and strong demand.

l On the supply side, global tin ore production has declined. The Manhsang mining area in Myanmar, which accounts for nearly 70% of China's overseas tin supply, has yet to announce a clear resumption of operations, raising concerns about future supply stability.

l On the demand side, the recovery of the consumer electronics industry in 2024 and the rapid increase in tin demand from AI servers are expected to create a supply gap for tin this year.

l Analysts predict that the rise in tin prices reflects market optimism about non-ferrous metals, with tin becoming another target for international funds after gold, copper, and aluminum. The upward trend is expected to continue in the short term.

l Against the backdrop of tight supply and rising prices, tin mining companies are expected to benefit from improved earnings.

Crude Oil: Oil Prices Erase Geopolitical Premium, but Global Oil Prices Are Still Rising

l Friday's oil market was a significant test for investors, with prices surging nearly $4 in just two hours before completely erasing gains and hitting a new intraday low. Such extreme volatility reflects the irrationality of investor sentiment, which tends to correct once the market calms down. For crude oil, the "king of commodities," single-day swings of $5 are not uncommon, but such extreme reversals are rare. Such volatility often breaches the risk control limits of most investors on the wrong side of the trade, leaving even seasoned traders in awe. After the wild swings, only those who misjudged the market are left bewildered—prices remain, but their money is gone.

l Israel finally took action on Friday, with geopolitical uncertainty being the market's greatest fear. The initial surge in adrenaline amplified volatility in oil prices and financial markets, with oil rising nearly $4 in two hours. However, the market soon realized this was another performative event, and tensions eased after Iran downplayed the attack. Iranian officials stated that the nuclear facilities previously under scrutiny were unharmed, and the three explosions near an army base in Isfahan were the result of their air defense system intercepting three drones. There was no ground damage. The attack's limited scale and Iran's muted response suggest that Middle Eastern parties are keen to avoid full-scale war, with actions aimed more at domestic appeasement and strategic goals. Observing Israel's retaliatory strike on April 19 and subsequent statements, while friction may persist, the risk of escalation appears to diminish over time. Oil prices reflected this by hitting a new intraday low, dropping $4.5 from the day's peak.

l Oil prices erased the geopolitical premium and returned to a consolidation phase overnight. Friday's extreme volatility left a long upper shadow on the chart, a classic noise pattern in oil market history. Prices are likely to consolidate around current levels as both bulls and bears reassess their positions.

l Since 2024, OPEC+ has worked hard to stabilize the oil market, with prices largely meeting expectations. Geopolitical factors have also played a role, lifting price floors and shifting the market's center of gravity upward. In April, Brent crude briefly surpassed $90. However, frequent but controlled geopolitical events have prevented runaway price surges. Meanwhile, weak diesel crack spreads, particularly in Europe, where prices hit February lows, indicate lackluster demand-side support. Against this backdrop, oil prices are unlikely to surpass last year's Q3 highs. The Biden administration's recent actions also suggest it will not tolerate further price spikes, likely capping oil prices below last year's peaks.

Source: Goldhorse Capital Extramile