We talk about Tesla's market share, but it's obviously calculated by quantity of BEVs sold.
The more you sell, the higher your market share. For this reason the Wuling EV, despite
only having a 9 kWh battery, still gets a reasonable market share, even though they
have a lot lower battery supply than Tesla. For example up to about September this year,
the Wuling had sold about 250,000 EVs, Tesla only 150,000. Of course these are Chinese
sales, Tesla produced a lot more than that in China and exported them.
But it could be argued that the Wuling sold 2/3s more EVs in China than Tesla, as they
literally did. But a fact is that the Wuling only sold EVs with a total of about 2.5 GWh,
whereas Tesla sold EVs in China with 9 GWh. In other words Tesla sold nearly 4 times as
many batteries in EVs than the Wuling. And like I said, this doesn't even include all
the Chinese made Teslas due to exports. This will change somewhat when Tesla start exporting
to Europe from the new Berlin factory.
So how do we calculate market share then? What would be a more fair comparison in how
we can measure the success of individual companies relative to the industry size. Well as we
mentioned, what about actual battery supply then, would that be a fairer comparison?
Yes, it would be, and especially when we look to the future of what supply Tesla will have,
not only is Tesla the largest consumer of batteries already from third parties like
CATL, LG and Panasonic, well very soon they will also start delivering cars with their
own in-house batteries. Especially when we hear Berlin should reach 250 GWh of battery
production, and then probably at least the same again with Texas. These are huge numbers.
And this is with nickel batteries. Look at the pace CATL are ramping up their battery
production using iron based batteries. When Tesla release their LFP batteries then it's
likely we will see Tesla battery production ramping up to even faster levels than the
4680s.
Now bear in mind, Tesla are making tabless batteries, using cylindrical forms with dry
battery electrodes. All of these 3 factors increase production speed at least by 10,
in about 1/10 the foot print that the likes of CATL require. Although I have also heard
some sources say Tesla can produce at 100 times the speed.
But not all batteries are created equally, nor are all batteries utilized equally. For
example we know how much more efficient a 4680 battery is over CATL's LFP batteries,
so its not a like for like comparison. And we also know how much more range a Tesla will
get on the same battery from literally any other EV manufacturer.
Therefore battery supply is not going to be a good enough comparison for market share
either. But I think I know what might be, or at least a different measurement that will
give us more perspective on how truly amazing Tesla's market share is, that goes under rated.
That factors in Tesla's battery supply, battery efficiencies, along with all other efficiencies
like power trains, software, motors and even weight reduction. What is it? Can you guess?
How about market share of total range produced? As in combine all the cars a BEV manufacturer
makes, and take all the range of each car. Then combine all the ranges of all the cars
produced, and then work out Tesla's market share from there. I think this would be an
interesting metric. And considering that so much of the market share of BEVs is actually
Chinese cars with really small batteries and minimal ranges, then Tesla may end up scoring
a lot higher than we think.
Look basically Tesla's market share has become a bit distorted, especially in China. Well
for starters Tesla exports a lot of their China made vehicles, a lot more relative to
the Chinese, of which some are only sold domestically. But what the Chinese EVs have also done, is
create new market segments that are then consolidated into the overall EV market, and thus dilute
Teslas market share as a result. We hear reports that the Chinese EV's auto
market share have increased from 5% to 20% or something, now while this statistic, again
you all know what I think of statistics, can be true, like any statistic if you want to
illustrate a point. Well it's said as if its eating up market share from other vehicles,
like legacy autos for example. But it's not. We have new categories of micro EVs, that
are attracting new consumers that could not previously afford a new car. This is somewhat
arbitrary. Do not rely on statistics. As Mark Twain said there are lies, damned lies and
statistics.
You see a great example, and there are many others, is the Wuling. This car is under $5,000
and has a 9 kWh battery. Now in no reality whatsoever is Tesla ever going to directly
compete with this vehicle. As in Tesla are not going to make a $5,000 vehicle, or anything
close. Telsa's most important things are safety and whats good for the environment. You can't
make a car safe for that price. There are sheer physics involved when it comes to safety,
all else being equal, the bigger the car the safer it is.
Even when Tesla get down to their compact car, it will have to be safe, this will not
be as easy as say a Model X. But with new advancements, like the structural battery
pack, and more efficient batteries, means that the batteries will be weighted more towards
the center, and the circumference around them will be able to better protect the passenger.
But if you go much smaller, then this does start to lose it's safety aspect. I don't
think Tesla will ever go any smaller than the compact.
Despite what ARK Invest seem to think, in their rather peculiar 2025 price target for
Tesla. Don't get me wrong, I have respect for Cathie Wood, she wasn't afraid to put
herself out there, saying that Tesla would reach these absurd valuations, and ended up
being closer than anyone else on wall street. But the Tesla 2025 price target from Ark,
was very strange indeed. I would not read into it too much, it is not a real price target,
it is prospectus to invest in Ark, as it should be. Cathie's intention is not to tell you
how successful Tesla is going to be, she is acting in her own self interest, which is
to get you to invest in Ark. If her price target said Tesla will be $10,000 by 2025,
then wouldn't you just buy Tesla stock instead of ARKK?
Not only was the entire energy business left out of the target, but they also introduced
a $15,000 Tesla, called the neighborhood Tesla. And expect it to have been selling in large
quantities before 2025. As it its, Tesla are struggling to get the first compact car out,
by perhaps 2024. They are not about to release another even more compact version shortly
after. This was strange.
Also I am looking forward to doing my 2025 price target, I have started working on my
2022 as it is. But I want to really pride myself on these targets, and I hope they become
some sort of benchmark, hence them taking so long. I did create my 2025 price targets
earlier this year, but this is Tesla, so much more information comes to light continually,
its a moving target. For this reason, I don't think you can really take anyone's price targets
seriously unless they are updated regularly. I plan on keeping mine up to date every 6
months or so. But some targets like Ark, will keep enforcing theirs for perhaps years. Look
I think there's a good chance Tesla breaks Arks target next year in 2022. What is the
point of trying to re-enforce the same target, when the company has clearly changed so much
over that time. It's ok to say something like, oh I didn't predict Tesla would start maing
Robots, and re-adjust accordingly.
Anyway, the Chinese are adding all these other vehicles in the EV industry with small LFP
batteries, and small ranges, with poor performance. But if there is a market for them, then so
be it. But like I say, they are diluting Tesla's market share. I mean where do we draw the
line. And electric bicycle is also literally an electric vehicle. Should we include those
too? I think we should perhaps classify an electric vehicle with a battery of something
like a minimum of 30 kWh. Then we would have a more realistic market share of EVs.
Anyway, I repeat, these micro EVs, or cheap EVs, dilute market share, they are not taking
Teslas market share. How could they if Tesla continue to sell more vehicles every quarter.
The market is growing faster than Tesla can grow, and mainly due to these short cuts,
for lack of better word.
Also, I say Tesla will not compete head on with these cars, but they will likely eventually
compete for this target market, or consumer, when the Robotaxi is launched. On the other
hand, maybe even the Robotaxi would struggle to actually become cheaper to use than a Wuling,
so who knows. Although it would certainly be a lot nice and safer.
Either way, not only are these vehicles not direct competition to Tesla, they barely scrape
the definition of an automobile, at least nothing serious, and if you use a battery
1/5 the size, then you will have enough batteries for 5 times as many cars, plain and simple,
you are removing battery constrain by removing more batteries. But let the Chinese do what
the want in China. These cars are not export quality, and wont pass regulations in developed
countries.
The other aspect is that it would appear that most of these Chinese EVs don't have the waiting
lists like Teslas. So depsite Tesla are only selling so many, Tesla are getting a lot more
orders than they can make, this could also be factored into another variant of market
share, like share of market demand perhaps.
Either way, all the research I ever do, just makes me keep realizng how truly amazing Tesla
is. Some people think I say this because I am a Tesla fan, well why do you think I am
such a big fan? Because they are that good.
Thanks