My math is all wrong, so everyone can play with their own numbers.
What do you think are the chances Tesla will reach a 1 TRILLION market cap by 2025 ?
And if it ever reach it by 2025, do you think there will still be good growth potential (superior to the market as a whole), or it will be time to cash out ?
My math is all wrong, so everyone can play with their own numbers.
The businesses Tesla are in:
- Electric Vehicle: potentially billions of cars planet wide, which Tesla can get a small chunk of. I Google'd # of cars on planet: says got to 1 billion in 2011, so let's say 1 billion. 1 billion / 15 years/car lifetime = 66 million/year. Tesla wants to do 500,000/year within a few years, so that would be 1/133rd of the potential market. Room for growth, and room for lots of competition. How competitive would Tesla be? They have dozens of competitors; is dozens >= 133? No, but it's close. They have to do really well, and then they can get an outsized chunk of that 133. Let's say it's 1/30th of the market: about 2 million per year. Assuming about $2,000/vehicle profit, that's $4 billion/year profit.
- Energy storage: half a quintillion BTU's/year worldwide for all devices (Google says 493 quadrillion BTU's in 2008): 144484037594905536 watthours/y, or 144quadrillion watthours/y. Let's do per day: about 400 trillion watthours/day. If we assume half of that use is charging during sunlight and half is discharging during evening, then 200 trillion watthours/day. Let's assume there will be about 30 companies in this space, and as a rough guess number use the $250/kWh for PowerPack (utility scale) for all PowerWall's, and 10% profit margin (that seems like totally false assumptions) ... 200 billion kWh/day so that seems like around a marketplace of $50 trillion divided by 30 companies so $1.6 trillion, then 10% profit margin so $166 billion. That will be spread out over about 25 years, so $6 billion per year profit.
- They're also trying to get into solar panels, which would replace about half the above energy production, but I don't know what their market share would be -- let's assume 1%. So, let's assume half the daily energy (400 trillion wH/day) is solar, so 200 trillion wH/day, and 1% of that is 2 trillion wH/day. Let's say that takes 30 years to build, so 66 billion wH/day. So, 5 hours at 200 watts/panel = 1,000Wh/day. That's 66 million solar panels per year. At $200/panel with 5% profit margin, that would be $660 million/year profit.
So, just napkin calcs gives us around $10 billion/year profit by about 2027. If they bring all that money to the bank, they can have $100 billion by 2037. $100 billion / market cap = 2.38, so if they had that cash in bank, they'd be minimum SP $619 if only counting cash in bank in 2037 and no dilution or future business and they saved exactly 1 decade profit (based on $42 billion mkt cap & $260 share price right now).
But, let's look at some variables: what if the solar panels are a loss leader and lose about $1 billion per year, the energy storage has a 15% profit margin and they have 1/15th of the market so they get $18 billion per year profit, and the auto sector they get 1/20th of the market at 3 million/year and their profit margin is $3,000/vehicle, so their profit would be $9 billion per year, they'd net $26 billion/year, so $260 billion/decade, or minimum SP $1,609 if only counting cash in bank in 2037 and no dilution or future business and they saved exactly 1 decade profit (based on $42 billion mkt cap & $260 share price today).
Of course, I did everything as linear, which none of it is, not in the least.
And, everything above is just plain silly and dumb because it is a growth company and they would basically never hold more than a work-ready cash balance until they've started to saturate the growth potential, and they might even dilute shares if they saw clean growth opportunities.
Oh and what if storage is a loss leader for the last 10 years and solar is a profit maker? Lots of variables. Obviously, shouldn't sell things at a loss if can help it.
What about 2025? I don't know! One quarter of that? One half? One tenth?
