Seriously, I can't get enough from this Berlin speech, it is relentless.
But we should expand on this 20 million vehicles a year number, as it would appear to be a
rather major target that Elon likes to bring up, that we first heard at Battery Day.
20 million vehicles is huge, its basically the same number of vehicles that the two current
largest automakers currently produce, combined.
Not only that, this is not being done with a Toyota Corolla type product, a low end,
low cost vehicle for the masses.
No, Tesla's still wont be at that price point.
This is being done closer to a Mercedes price point, except with margins similar to Apple.
It's absolutely mind blowing.
Of course the vehicles aren't actually that expensive.
When you buy a Tesla, it's like you are prepaying for gas, brakes, engine repairs and servicing,
all included in the initial price tag.
Anyway, a Tesla is not nearly as expensive as most people think, and a lot more people
can afford them, than they think, so although this price point may be high for some, there
may be ways to mitigate that.
This 20 million a year figure is somewhat
synonymous with the target of holding until 2030 when Tesla's stock price is worth $10,000.
You must HODL for this long if you want to get rich with Tesla, just keep holding an
long term it will do very well, even if you lose half you investment during the dips.
It's not a short term investment, just look at Amazon.
Time in the market is what matters.
Right?
I think we have all heard the rhetoric before.
It's a safe strategy for investing to avoid all the market manipulation and volatility.
In the long run, the stock will go up, but through lots of peaks and troughs on the way.
But in the long run the market can't ignore massive profits, especially the sort of profits
20 million Teslas a year can bring.
The thing is that most analysts who try and
do forecasts to predict even 5 million sales a year, let alone 10 or 20 million, they can't
seem to do it, without majorly adjusting the average selling price, as in they simply can't
understand how Tesla may be able to sell that many cars, at such high price points.
But we now know the biggest selling car will not be some $25,000 compact, and it will be
the Model Y, which currently costs over $60,000 in the US.
There is also a very good chance these cars can hit FSD within the next few years, which
will only further add to this price tag, as adoption levels increase and there is no longer
any deferred revenue.
However, I think Tesla would likely need to include a standard range Model Y, and perhaps
a medium range too.
And possibly the prices may need to come down slightly, but not to the levels that people
estimate.
But when you include FSD, the ASP is probably still higher in the future, than it is today.
It's not the car that is getting more expensive, it's an extra service Tesla are offering you,
you can have a full time chauffer, at a fraction of the usual cost.
There is no competition coming to compete
with Tesla either, in that they do not need to worry about competitive pricing.
Tesla can make EVs lower cost than anyone else, like for like.
None of the others can even make a profit, whilst at around Tesla's price point, and
a lot of them are even getting subsidies.
Yet they still lose money.
These so called competition will likely need to raise their prices if anything, not cut
them in order to compete with Tesla.
Even if they did drop their prices below Tesla, and their cars were like for like, then they
couldn't handle the demand anyway.
But that's simply not going to happen.
The competition need to start breaking even, and then try and find a profit, and then try
and recoup some of this massive capex they have got through.
No one is going to be competing with Tesla on price.
In other words, Tesla do not need to look at reducing prices due to the competition.
I mean Tesla really are pretty much a monopoly, as in they are the only BEV company to make
a profit and hit volume production.
Now this 20 million number, we were initially
told it would achieved easily before 2030 on Battery Day, and then in Berlin we were
told in 10 years time.
However, at Berlin we were also told more than 70 to 80% growth which is more like 5
years time.
If these 4680 lines go as we hope, then Tesla should have enough battery supply for 10 million
likely around 2025.
If we are moving at exponential rates, then it shouldn't take as long to get to the second
10 million.
What cars will Tesla be selling to hit this
20 million vehicles a year number.
Well the chances are we might assume that by this stage then Tesla has well and truly
cracked FSD, and like Robotaxis too.
So I am happy enough to say that 10 million of these vehicles could be Model 3 and Model
Y, granted possibly standard range versions of both model will be out, which would have
a lower selling price.
On top of that I think there will be plenty of demand for people wanting to own a Tesla
to add to the Robotaxi network.
I think the Cybertruck will have to sell in the millions, or Tesla simply wouldn't bother,
it wouldn't make that much of an impact to the overall mission if they were just selling
a few hundred thousand.
Like I said, the only video I ever lost subscribers on, was me suggesting that the Cybertruck
might not be out for a few more years.
There is a lot of love for this product, and so many applications.
If Tesla are only making a few hundred thousand, then it's too many resources, and not enough
gain, if they are selling 5 million Model Ys or so a year.
I don't think Tesla would waste that much effort creating something so complex if it
isn't going to result in a major impact for climate change.
I think there is the demand for it.
But people say that the F-150 is already selling almost a million a year, there isn't enough
room in the market for a Cybertruck, well we'll see.
F-150 owners are quite loyal, but I was loyal to BMW, and now I couldn't care less about
them.
Tesla always absolutely dominate every single market segment they are in.
Of course the Cybertruck will be the number one selling pick up truck.
The semi should be huge too, especially when it's autonomous.
Tesla can sell as many as they make, even if it was millions.
They offer so much value, and cost saving to anyone who needs transportation.
This may indeed require a lot more variety
of models, Teslas in every segment, perhaps a larger Model Y, a sports car, compact, and
everything else in-between.
Whilst still producing as many Robotaxis as possible.
But Robotaxis may be the highest end value per vehicle, but it's not the highest value
per consumer.
Tesla still make more profit from selling cars to consumers, per person.
Eventually Robotaxis will saturate, and then Tesla can focus more on the individual consumer
again, rather than the overall mission.
Costs for new cars will start to come down
too, as some of the older one start to be recycled.
This is a huge point to reach.
We just need to get these elements out of the ground first, then once they are out,
we can keep reusing them by recycling.
And then what, when Tesla hits 20 million
vehicles, is that it?
The target is reached, and they focus on energy?
I highly doubt it.
Is there any reason Tesla can't get to 30 million a year, or what about 40 million.
Hang on, that's about 50% market share of new cars sales.
Well possibly, but what if the majority of these cars weren't used by these new car buyers,
and instead they went into the Robotaxi network, each replacing 5 vehicles from the global
ICE fleet.
I think people look at the total addressable market incorrectly.
They are focused on around 80 million vehicles a year.
But this is a new paradigm.
The actual total addressable market is 2 billion vehicles.
Tesla want to replace 2 billion ICE vehicles with electric vehicles asap, it's not about
market share.
This is totally 3D chess again.
Tesla are replacing the used car market as well as the new.
What if Tesla hit 50 million a year?
I don't think 20 million is going to be nearly
enough.
And to be honest if it takes Tesla 10 years to get to 20 million, then there is very little
chance than many others come close to caught up.
At best, I would say the other EVs combined, might have hit 20 million a year.
Excluding any cheap, small battery Chinese EVs, that aren't legally allowed to be sold
out of China.
That would mean 40 million a year EVs, but likely also another 40 million a year ICE
vehicles still be produced, or maybe even 50 million, if 10 million of Teslas aren't
for new car buyers, and are for Robotaxis.
But if Tesla have 100 million Robotaxis by 2040, that have replaced 1/4 of the global
fleet, and perhaps another 400 million EVs on the road too, then we are nearly half way
the transition.
Also bear in mind the longer life EVs have with million mile batteries.
By that stage there should have been so many battery breakthroughs, and all sorts of technological
breakthroughs, don't forget this industry is of a new paradigm of value, which is another
number our brains can't comprehend.
Collectively though we are easily in the 10s of trillions of dollars if not more.
My point being there will be so much money invested into these industries, that we should
see some serious innovation.
Maybe cars running on just 20 or 30 kWh batteries, able to charge fully in just a couple of minutes,
with chargers everywhere you go.
So many other applications and businesses that thrived as a result of autonomous driving
and extremely low cost transportation.
We can only begin to imagine.
But it will take a while until we hit this level, and there is a lot of work involved
in getting there.
20 million EVs a year from Tesla, is an absolutely
insane number, but Tesla can't stop there, I think everyone else is too far behind to
make as big an impact, especially when we are dealing with exponentials.
With exponentials, getting started early makes all the difference, and no one begun as early
as Tesla.
Therefore I don't think there will be anyone else soon enough to really have enough of
an impact on transitioning to renewable energy fast enough.
I think the lions share will come down to Tesla.
Of course this just vehicles, Tesla also going to be busy trying sort out energy too, oh
and perhaps robots.