Seriously, this statement still stands, in fact its taller than ever before.
There is only one Tesla, there is only company it the world that can competently make EVs. Only one
company that can make EVs at volume production. There is only one company that can make EVs at a
profit. There is only one company that can deliver EVs, with adequate range at an ICE price point,
without subsidies. There is only one company with a path to level 5 autonomy.
There is only one company with an adequate charging network. There is only one company
efficient enough at building EVs that can offer adequate range with low cost LFP batteries.
Tesla has no competition. That by definition means there is no competition for Tesla, no one is
taking away Tesla's sales. Everyone is coming up short. There is a certain tipping point, that an
EV much achieve before it becomes viable. You need to be able to make an EV with at least 250 miles
of range, or potentially up to 300 miles, and you need to do this, at the a price point competitive
with an internal combustion car, like for like. At least if you want to hit the biggest auto markets.
But you also have to make this car, at this price point, at a lower cost than you sell it for,
whilst also leaving enough room to cover all your OPEX too. A lot of these EVs are actually making
some gross profit, but after their OPEX kicks in, then the losses are huge. But if only they could
scale up, and make enough of them, then they could see a profit. Except the problem is that no one is
capable of ramping up production. Not only that, even if they did ramp up to a high enough level to
crack a net profit, then you would also have to find buyers for these cars, we don't hear about
the 6 month waiting lists for an ID4. And whilst Tesla is ramping up at an even higher stage.
But you need to leave some decent profit, as afterwards there is no more major income,
no servicing, no engine wear and tear. Which is a lot of what legacy autos rely on,
it's not enough to simply break even, although they may be able to still profit from financing.
So what are they all waiting on? What is the plan? Hang in long enough to build some market share,
until eventually the miracle that the industry needs is released and suddenly makes all electric
vehicles profitable? And what might this miracle be? Perhaps a lower cost battery,
that actually delivers some decent range. Or maybe its going to come from some amazing company
like QuantumScape, well even if QuantumScape released some incredible solid state battery,
then so what? For starters its going to be expensive, and likely suitable for
aircraft more than anything, as that industry could afford to pay more for such a battery,
assuming that it's even more energy dense than whatever Tesla has created. At least to start
with, as in case you haven't realized yet, well battery ramping is not an over the night thing.
Or are they hoping governments will cover them over this period. Or
maybe the entire auto market just wants electric,
and thus demand increases enough that EVs can raise their prices to become profitable.
Yea Tesla invented these absolutely incredible things, called 4680 batteries. People don't give
them anywhere near enough credit. As if Tesla were not already doing as well as they are now, well
these 4680 batteries are going to increase their margins a further 10%. Going from 30% to 40%,
I have been saying this for a while, check some of my older videos,
and now more people are starting to believe me, they thought I was too bullish before,
but the math was as simple back then as it still is now. Tesla will break 40% margin on their cars,
and then with FSD, it would be up to 50%. Not only that, Teslas are still a very good value
car to buy. When you compare the 5 year cost of ownership to an equivalent luxury car, like a BMW,
the Tesla is so much cheaper. And I am not even factoring in the minimal depreciation you lose.
What am I saying? More and more people will start to realize this,
and demand will increase, and prices will keep rising. Not to mention this
insane demand jump we are about to witness with these tax credits.
But Teslas are still scarce, they can only make so many. So there could be a huge wake up,
where everyone frantically starts buying Teslas as they realize they are obviously the future.
Everyone will want a Tesla, and they will pay dearly for a used one too. Because the waiting
list, is going to get long. Chip shortages will work themselves out. But batteries,
well there's not so many to go around. So Tesla's new 4680 batteries can be produced at 10 times the
speed they can produce 2170 in about 1/10 the footprint, and at nearly 1/3 the cost.
4680 batteries still use nickel, this is still scarce. The reason the Chinese are
making so many EVs, because they skipped nickel batteries. All the Chinese EVs have
insufficient range, and if their range even gets close to Tesla it has been
overloaded with batteries and is a dog to drive. Tesla absolutely destroy everyone in software,
motors, drive train and batteries already. No one is catching up.
But Elon has now even started saying that they will make their own LFP batteries,
which is something I was saying long before.
It was just incredibly obvious. I even have a pretty certain idea on how they will work too.
Tesla have created these amazing tabless batteries, the 4680s,
that as a result can be manufactured at a much higher rate, due to not having tabs. They also
copied the bottling manufacturing facilities, as that was the fastest production line, implying
they have to use cylindrical cell batteries, not prismatic, and certainly not pouches. I am not
sure enough people realize what this means. Sure the battery production lines, have been
taking a really long time to set up, and get a high enough yield, but Tesla are achieving it.
I mean that Kato Road facility has now been going for over and a half, and Telsa are still
not ramping up their battery production yet. This means it's a huge barrier to entry, and
going to be incredibly difficult to replicate, and possibly close to impossible without Teslas help.
As a result of all these great advances, Tesla are making 10 times as many batteries,
in 1/10 the footprint. I think this is the case, I have heard others say 100 times as many,
but perhaps they are going be sq ft equivalent. Which would be true.
So just think about that. Tesla can make their batteries so much faster, and so much cheaper
than everyone else. Surely in a couple of years Tesla could be up to 500 GWh of 4680 batteries.
But Tesla also have their LFP batteries, which will likely be cylindrical and tabless too,
but just a different form factor. The 4680 form factor was designed around thermal management,
cost and longevity, or degradation. LFP batteries do not overheat to the same extent, and their cost
is already low enough, compared to nickel. They will use the ultimate form factor that provides
as much range as possible, as in as energy dense as they can, for their cars. They will also create
another form factor that will be used for energy, where weight is not important, I expect it may be
designed around price. LFP batteries do not degrade at close to the same rate as nickel.
Tesla will use the same chemistry in their new LFP batteries as they used in the 4680 batteries,
like silicon in the anodes. These batteries could be argued as one of the most important products
ever to be invented. Tesla know this, they are taking their time.
Elon says something like 3 out of 4 of their cars will use them, I think it will be over 80%.
I can only imagine what the energy density on them will be.
But if any other EVs need a chance, to actually finally make a profit,
these are the batteries they are truly waiting on. There is nothing else coming along.
No one else understands batteries as well as Tesla. No one else has as good an engineers as
Tesla. No one else will benefit from better batteries as much as Tesla. No one has as
much capital to invest as Tesla. No one else is as motivated, with a mission as big as Tesla.
The could end up getting down to about $30/kWh, to give you an idea a 2170
battery is still almost $150, and CATL's batteries are possibly at around $100.
But remember the energy density too. As in you will need fewer batteries, and thus it will weigh
less. EVs are going to become absolutely amazing to drive, the lighter they get. And when battery
prices are low enough, then they will be cheaper than ICE car by a mile. Well at least Tesla's EVs.
Tesla will make so many of these batteries, it wont take long until it is outpacing the
rate at which they can make cars, which means the energy business will finally be able to expand.
There is no one else remotely close to Tesla. It doesn't matter who is telling that the Chinese
are coming, they simply aren't going to eat any of Tesla's pie. Tesla can scale and scale,
and keep eating everyone's market share. The only competition will be if there are any companies
that are smart enough to take on Tesla's FSD and their supercharger networks. But these batteries
are such a competitive advantage, that the competition really need to hope that Tesla
will eventually offer them too. Or could make some sort of platform for them to base their cars on.
Keep watching the batteries, it's all about batteries.