What is the next year going to look like for Tesla?
I think there are enough dots to connect some of what Tesla will be doing in the future.
I know a lot of you just think who cares about the next year or so, I am holding until 2030,
and Tesla is obviously going to be way bigger by that stage, selling 20 million vehicles
a year, etc.
Well I like to analyze Tesla from all timelines, whether its next quarter or next decade, I
find it all interesting and like to work out where it is headed.
For example, currently the only path I can see to reach 20 million vehicles a year, is
for Tesla to solve 4680 cells in high volume production.
They are currently at around 2% of the target on battery day, so I am not 20 million a year.
by 2030 believer at this stage, despite Elon still saying thats the target.
I have learned to judge the future on what I can see happening, rather than what we are
told, and I have been much more accurate as a result.
But still you are right as to think think how much further Tesla would have evolved
by a time like 2030, and how more popular EVs will be, how much better the charging
infrastructure will have become, more service centers, more efficiencies, better batteries,
lower cost EVs, etc, etc.
I mean dont get me wrong I would love it if Tesla would hit 20 million a year, and it
would be a lot more exciting if I believed that, but I don't have the evidence I need
to believe that, even if some of you do.
Yes, sure all good points.
But there are many of us here in this community and we have different objectives and goals.
We are at different times in our lives, and some of us have been invested in Tesla much
longer than others.
If there is a chance that Tesla's stock price could hit 400 to 500, the some investors may
take some profits, its enough for them, they may even be in their 70s for all you know,
and just want to enjoy the rest of their lives, without having to worry about riding the Tesla
roller coaster one more time.
Anyway, the Model 3 Highland has finally been revealed, and we can pretty much work out
the majority of the specifications, and what the new price will be.
It would be good to know what the cost savings of this vehicle will be.
The fanboys are saying up to around 15%, and all their math appears to be based on, because
I said so.
They have about as much of a clue as you and I do.
However, we would assume that costs are down somewhat, and we can see the price is up.
I think I am being a little conservative when I say this has increased margins by as much
as 5%.
And I hope to see a similar increase when Tesla do the same thing for the Model Y.
This is all we need, this additional margin, and probably an increase in production and
deliveries over that similar period, after OPEX is removed, is going to make a big difference.
We could actually see profits double by the time all this kicks in, assuming Cybertruck
doesn't take too much out of profits.
Anyway, I think I can see the roadmap ahead for next year, and it does look quite promising.
You just have to pick up on various clues that are out there.
Now apparently we are hearing that Tesla's new Megapack factory in Shanghai is expected
to start this month, and in production within about 9 months after that.
Is this something we can get excited about?
Well judging by the progress at Lathrop, no.
But then why would Tesla bother starting a new Megapack factory in Shanghai if Lathrop
was at such low capacity?
Well my theory on this is, that Megapacks are going to be using the lowest cost cells
Tesla have, that are not particularly energy dense.
There is obviously no need, keep energy dense cells for vehicles, for obvious reasons.
Let me put this another way, Tesla have about a further 30 GWh a year capacity remaining
at the Lathrop Megapack factory.
Tesla is about to build another Megapack factory with an additional 40 GWh of capacity.
That is 70 GWh a year of cells required.
Which is a lot, a massive cell factory needs to be built for such a supply.
Such a factory would be noticed, and the only company that is building factories of that
magnitude is CATL.
Except CATL already just built such a factory.
The rumors of this factory are that they will be CATL's new cell, which is one step closer
to LMFP cell chemistry, by using a hybrid cathode that includes LFP still, but doesn't
use nickel nor cobalt, which is always good to see.
It is frustrating to not be able to get more information as to what CATL are doing there,
but look, they built the factory right next door to Giga Shanghai, so its not going to
take a genius to work out who these cells are for.
There may even been enough LFP cells available, that Tesla could make a new Powerwall, at
much lower cost using these cells, which may turn the Powerwall from a business that is
for luxury or convenience, into one that actually saves money with a decent return on investment
in many markets, which would increase demand a lot.
Now I think its safe to assume that this new CATL factory has better, by which I mean more
energy dense cells, than the current LFP cells, we are hearing supposedly 10% more energy
density, which would mean Tesla's current battery could go from 60 kWh to 66 kWh with
the same weight and likely similar volumetric density improvements too.
And like I am saying energy density doesn't matter for storage.
Therefore my assumption is that these new cells will be used in Tesla's Model Y.
The Model Y update is going to be later next year by the sounds of it.
Bear with me here, now if this new Megapack factory will be in production in 9 months
time.
Then where are the cells coming from?
CATL aren't building any more factories to make these old LFP cells.
Therefore I think it highly likely they would be coming from the old LFP cells.
In other words, the cells that are going into the current RWD Model Ys.
So what if in about 9 months time or about Q2 2024, Tesla update the Model Y, and use
a new battery pack, that is structural, and has 66 kWh, yet actually weighs less due to
it being structural?
Then include all the other efficiencies that Tesla have used to improve the Model 3, and
the RWD Model Y, might very well also be hitting that 300 mile threshold.
The range numbers look so much better at 300 miles, when compared to even 299.
Its a big factor, and will mean people are willing to pay more.
However, this battery shouldn't actually cost much more than $1,000 extra.
And Tesla have hopefully saved a further $3,000 or so on the refresh.
There is absolutely no one coming close to competing with this.
It will also be enough range for Tesla to actually sell the RWD model in the US, and
receive all those additional credits and subsidies.
Tesla would totally own the electric cross over market, and the mid-size and luxury sedan
markets too.
I mean they already do, but this takes it to another level again.
Tesla is a stoic company, they are not concerned about comparing themselves with the competition,
and trying to beat them, they are comparing themselves with the current Tesla, and trying
to improve that.
There is absolutely no competition, absolutely none.
Oh what about Hyundai, or Kia, they're doing a good job.
No, their range is dismal, and they are losing thousands if not 10s of thousands net profit,
on every car they sell.
BYD are junk and likely barely break even on each sale.
Not to mention BYD have a serious barrier into international sales, as they lose their
domestic production advantage very fast.
Oh and their range, even with structural battery packs, still doesn't beat Tesla.
Model Y and model 3 increasing margin is a really big deal.
Considering they are about 90% of Tesla's sales, and probably about 80% of the entire
revenue the company generates.
The rest of the business is almost superfluous, particularly as it isn't even very profitable,
or actually loses money, like solar.
It should hopefully increase demand so much, that even if Texas and Berlin ramp, then there
will be enough demand, that Tesla can still hit around 20% margin on that car.
We would be at around 2.4 million Model Ys a year, at full capacity from all factories.
If ASP is $45,000, then thats just over $20 billion in gross profit.
Just from Model Y.
Then all those cells from the Model Y going into the energy storage business.
Therefore this would all time in perfectly.
Sure perhaps Tesla could have used this new battery pack in the Model 3 Highland, but
then the range for the RWD might end up at around 330 miles, and is going to start cannibalizing
the long range version.
And 300 miles is more than good enough for the RWD Model 3.
especially at its price point.