We had a little clue, hearing that Tesla will be back to being battery constrained next year,
once the chip shortages are fixed. In the past we had also been told that Tesla should hit a
run rate of 100 GWh by the end of this year. I think it might have been on the Q2 earnings call.
If they are back to being constrained by batteries in 2023, with a 4680 run rate of
100 GWh at the start of the year, and then perhaps the ability to hit 200 GWh by the end of the year.
So lets say we could expect 150 GWh of 4680s in 2023. That is enough batteries for well over 2
million vehicles. Tesla may also have secured around another 100 GWh a year from CATL by then,
compared to what Tesla had last year. This is being very modest, given that just in
a few months have an 80 GWh a year fab that was established near Giga Shanghai by CATL.
On the earnings call we were also told that even Giga Nevada is still expanding, so likely so will
LG and Panasonic in Japan. Last year Tesla secured around 70 GWh from their suppliers,
so perhaps by the start of 2023, this has also increased to 100 GWh.
If we total all of that up, we come in at 350 GWh of batteries for 2023.
If the average vehicle is using a 65 kWh battery then that is over 5 million vehicles. Alright,
we haven't left much for energy, but bear in mind only 4 GWh was deployed last year in energy.
Tesla are not going to do much with energy until they have their own LFP batteries ramped up.
But perhaps by 2023 they are at closer to 20 GWh, especially with more of CATL's LFP batteries.
I mean maybe CATL is supplying Tesla with 200 GWh a year by that stage even. Meaning
more standard range Teslas from China and LFP batteries for energy perhaps.
But 5 million in 2023, well why is this not possible? I mean if we even hit 2 million in 2022,
then that's still a 150% increase in deliveries. And we are thinking 100% is high.
Well what if Tesla only produced 100 GWh of 4680, and still only had 80 GWh from CATL's
new facility, and werent able to ramp up any more from their existing suppliers.
I know you could say what if there are still chip shortages, there are a lot
of new semi conductor fabs opening soon. Which is fantastic news. So 2022 may be a bit rough,
and not too much to boost the stock, but possibly still some buying opportunities. On the other
hand it could become the most valuable company in the world when people realize what is happening.
Ok so 100 GWh of 4680 plus 80 GWh extra from CATL plus 70 GWh what their suppliers provided last
year. Equates to 250 GWh still, and what if even 30 GWh was used in energy, leaving 220 GWh for
cars, that's still 3.4 million vehicles. And this is 2023. And that's not the run rate, that's the
total number of vehicles. And that's if there are no new developments from today. Implying that the
5 million scenario is more believable, but even if it's not, 3.4 million is still a great number.
Not only that if 2023 did reach 3.4 then it would be likely the last quarter should be
about 1.25 million deliveries, which would be a run rate of 5 million.
But if Tesla did achieve 5 million for 2023,
that might mean it's possible Q4 2023 could be about 1.7 million vehicles.
Up almost 6 times as many deliveries as Q4 2021. 6 times, in 2 years. That is tremendous growth.
I am just trying to look at things through a different perspective,
especially with new information. The information being that by 2023 Tesla are battery constrained.
Therefore the perspective I am looking for here, is how many batteries will Tesla be at
when they are still constrained. I am thinking 350 GWh is possible, enough
for 5 million vehicles, but what if Tesla didn't hit this 350 GWh until a whole other year later,
say 2024. Well 5 million vehicles is still a really good number, even for 2024. If Tesla
delivered 5 million vehicles by 2024, then that would at least 10x the current EPS.
This would also give annual earnings at an equivalent of over $100 billion.
Except this totally excludes the potential of FSD and Robotaxis.
Yes, 5 million for 2024 sounds good, but 350 GWh for 2024 doesn't sound as impressive,
not with 2 years of ramping up 4680 and more CATL batteries. In other words,
it should be more than possible this is achieved in 2024, but I think also a possibility even as
early as 2023. It does sound hard to believe, in this scenario we have shown it as a possibility.
Just work backwards with me on the math here one more time, as it's really simple. When do you
think Tesla will have enough supply for around 350 GWh of batteries for vehicles? Please answer that
in the comments below. Tell me, when you think Tesla will hit a supply rate of 350 GWh a year.
Then if each vehicle has an average of 65 kWh batteries, then that's 5.4 million vehicles.
Now my guess is that Tesla will have that much battery supply sometime in 2023. But if it's 2024,
then they are not doing as well as they should be. Yet, at the same time,
5 million vehicles in 2024 would still be amazing. We are at around $9,000 net profit per vehicle
now. It could be closer to $15,000, in 2023, especially if we are at 5 million units a year,
and advances in FSD. That would mean a total profit of $75 billion for Tesla in 2023.
With a p/e ratio of 50, that is close to a $4,000 stock price.
Elon said they will be battery constrained once again in 2023,
and can make cars as fast as they can ramp up 4680 batteries, implying no other supplier
will be ramping up as fast as the 4680 line, as according to Elon it depends on the 4680 ramping.
Anyway, even at only 150 GWh of 4680, Tesla should have enough batteries for 5 million
vehicles a year. Remember the ramping up is going to move faster that we thought now,
due to no added complexities of new models. But it would appear that the calculating
the amount of battery supply Tesla can achieve each year, will be the biggest indicator as to
how many cars they can make. That is surely just another way of interpreting the fact that Tesla
are battery constrained in their growth, once the chip shortages are rectified this year.
If things start going well for Tesla, for example in supply chains,
then maybe Tesla could be at 250, or 350 GWh of 4680 alone in 2024 possibly,
especially if we factor in what Berlin is capable of. Not to mention anything else that could be
built over the next 2 years also. And if it's batteries that are the constraint, then woudln't
you think a reasonable amount of the new capital growth would be oriented around increasing battery
production. If that's where the bottleneck lies, then that's whet the most attention is required.
Anyway, as microchips is such an unknown for us for 2022, it does make more sense to think about
2023, with what we do know, and can work out. It might be possible that there is not much movement
for most of this year, and perhaps towards the end things start to ramp up, and some of the shortages
are alleviated. Perhaps that's why actual gross margin on just autos was slightly down in Q4,
as Tesla have to pay more for chips. But if you have a product that is fetching perhaps
$30,000 in gross profit, then even if you still have to spend $5,000 extra just on chips, it's
still worth it. As Elon said, there are lots of chips out there, but are being hoarded, perhaps if
there is a market for high priced chips, then some of these buffer chips might also become available.
This might also imply that although the chip shortage is the bottleneck this year, but the fact
we know that batteries are the next bottleneck, might mean that Tesla still stockpile as many
batteries as they can this year. Implying that perhaps the downtime with chips, in the long run,
would actually had little impact on Tesla's growth. Then to be saying, that from here,
it is when the 4680s really make a difference. Except, that at this stage sometime in 2023
Tesla are likely already at 350 GWh, therefore for the 4680s to have any major significance,
which is what they definitely implied from the earnings call.
Elon said "And that chip limitation should alleviate next year. And then probably,
we transition into a cell limitation battery,
you know, total gigawatt-hours of cell limitation, which is when the
4680 will become very important." The 4680 will become important,
so we would hope that the 4680 should start really ramping up about this time. Maybe 4680 could reach
a run rate of 250 GWh a year by the end of 2023 even. Every 250 GWh is another 4 million cars.
The exponentials are starting to kick in now, the numbers are getting bigger,
they will get stupid big soon, it wont be long until we will be talking more about TWh.
Anyway, I would have though the stock price is bound to have some sort of break out
around the time this kicks in.