StapleGun
Member
Here's the wording I found.
I believe this means in the 200,000th vehicle is delivered in Q1, then all the vehicles in Q2 also get the full credit. Q3 and Q4 would be $3750, and Q1/Q2 the next year would be $1875.
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Here's the wording I found.
I believe this means in the 200,000th vehicle is delivered in Q1, then all the vehicles in Q2 also get the full credit. Q3 and Q4 would be $3750, and Q1/Q2 the next year would be $1875.
EVNow
Well-Known Member
It's 2023 actually. He mentioned in 12 to 13 years a number of times, in D11, SXSW, Reuters internals and as recently as in this Bloomberg interview he said in 10 years.
Even the most ardent longs don't fully appreciate the size of his vision. Come what may (stock drops to 50 or zooms to 1000) I am holding it for next 10 years.
Last edited:
Sunnyday
Member
The unit volume numbers might be too conservative. I see several potential multipliers coming down the pike, any of which in isolation could shift the numbers much higher:
I'm sure there are other multipliers that will present themselves as EVs take hold. As Elon says, they're going to be production-constrained. I hope he announces supply chain updates soon because once he does that, people will start seeing the bigger potential picture here.
- At Teslive, Elon talked about the need to replace one billion or so ICE cars that are on the road. I think the folks here who say "his vision is greater than most of us realize" are on the money. Elon is thinking more than 500k cars/year. Also in the last week was new news they're looking to build new factories in the US, Europe and Asia. What happens when Elon outlines a plan for 1 million vehicles per year, or three million, or...?
- A $70k SUV will not be seen as so outrageously priced to mainstream SUV buyers as a mainstream sedan buyer sees $70k
- The estimates probably don't take into consideration that as TSLA obtains economies of scale, and as component prices (batteries!) drop in price and increase in capability, TSLA will be able to lower the end consumer cost for Models S, X and E while increasing the capabilities (better batteries will enable more distance at less cost with longer life). Lower prices of every model will become an additional multiplier on demand.
- If Elon solves the battery issue by building a mega battery factory, as he revealed he's considering during the CNBC interview last week, that helps eliminate much of the execution risk for scaling.
- The cost of solar-generated power will continue to decrease every year for the next several years. I can see the day in the not-to-distant future where TSLA does a bundle deal with SolarCity - buy the car and lock in lower, fixed-cost electricity for the next 10 or 20 years.
- Tesla's sales grow by word of mouth. Evey Telsa owner is selling more cars to their friends, and then their friends will do the same. When things go viral, it drives exponential growth in demand, not linear.
- What happens when the $35k Gen III comes out, and it does for mainstream sedans what S did for high end sedans? Consumer desire for TSLA EVs will shatter even the most optimistic projections here. I'm in a business where five or six years ago, the marketshare for my class of product was 1/2 of 1% of the market. Now it's approaching 30 or 40%. Even the most optimistic supporters of this didn't see this happening so quickly. Incumbents never see it. Consumer sentiment and behavior can change quickly whenever any consumable products' DNA gets bitten by Moore's law and makes it better/faster/cheaper. What if, five years from now, 30% of all car buyers desired a Tesla as their next car? What's the annual market size for new cars? Something approaching 100 million vehicles per year? I'm not saying TSLA will get 30% of that, but even if they only get 10-15%, that would indicate a 20-30X increase over the 500,000 most of the most optimistic forecasts are modeling for now.
- What happens when TSLA EVs provide dramatically lower cost of acquisition and ownership? Hit consumers where they feel it the most - their pocketbook. Consumers will abandon ICE like a hot potato (sorry for mixed metaphors!) once EV is recognized as better, cheaper, more pleasurable, safer. The trend with batteries and solar means the primary cost components of car cost and cost of ownership are decreasing, which will only increase impetus for consumers to abandon ICE.
- TSLA has a technology lead on the other companies. Sure, the others will up their game over the next few years, but they're still chasing the tail of a beast that's running forward and pushing the envelope.
- TSLA doesn't need to achieve 10 or 30% marketshare to disrupt the financial stability of the other manufacturers, which may soon find themselves saddled with excess factory capacity. In a cyclical auto business with high fixed costs, implosions can happen quickly. I can see a high likelihood that as TSLA starts eating marketshare, weaker players will implode, and lots of factory space will come on the market at low cost.
- What happens if TSLA starts to aggressively license subsystems to other auto manufacturers? Battery packs, drive trains and software, for example?
- Trucks. What if they do a mainstream consumer truck?
- What if they do a car for the mini segment, especially in Europe and Asia?
- What if TSLA expands their platform beyond personal automobiles, and adds commercial products, such as delivery trucks, tractor trailer trucks, or trains?
I'm sure there are other multipliers that will present themselves as EVs take hold. As Elon says, they're going to be production-constrained. I hope he announces supply chain updates soon because once he does that, people will start seeing the bigger potential picture here.
2019 projections
Alright, now that I've had a night to sleep on it, I'll share my thoughts on Sal's 2019 forecast.
First, overall I think his modeling is very poor. The article was published on July 3, 2013 but by then we already had enough info to make much more realistic forecasts for the next several years. One of the key pieces of info is this article published on May 27, 2013:
Tesla Motors Inc (TSLA) Envisions Selling Around 500K Units: Long Term
In the article Goldman visits Tesla's factory and interviews Elon Musk. Here's the key quote:
"Longer term, Tesla Motors Inc (NASDAQ:TSLA) envisions selling around 500K units through a combination of the Gen 3 sedan (around 200K units), Gen 3 SUV (about 150K units), Model S/X (roughly 90K units) and the next Gen Roadster. From a timing standpoint, the company intends to start deliveries of the Model X in 2015 and hopes to start the Gen 3 production by 2017."
Now let's dissect that quote a bit.
"Longer term" - now that's kind of vague. I don't take that as 10-15 years away. Rather, that's more a longer term goals several years out. Elon has eluded that he envisions that Fremont factory running at full capacity by 2020 or so. So, I'm taking this quote to mean this is Tesla's goals for around 2019-2020.
"Gen 3 sedan, SUV, next Gen Roadster" - now I think Tesla will likely push off the next gen Roadster and focus on Gen III. I think the sedan will overwhelm Tesla with demand, so they might need to push off Gen 3 SUV for a year or two (similar to Model X following Model S).
But overall, we see the goal of Tesla over the next several years is to be filling out the Fremont factory's capacity and to sell 90k Model S/X annually and 350k+ Gen III (maybe more like 400k) per year.
Sal's 2019 forecasts are completely based on Tesla selling almost 300k Model S/X in 2019, and another 300k+ Gen 3 as well. Here's why I think 300k Model S/X in 2019 is vastly unrealistic.
First, Tesla isn't planning to produce that many Model S/X in 2019. It's more evident from the "first data" info we have, that Tesla is expecting to produce/sell 90k Model S/X on a yearly basis in several years. Now, Tesla could be vastly underestimating Model S/X demand, and they could sell a lot more than 90k/year. But I don't think it's realistic to base a forecast off of 300k S/X sales per year when the company is forecasting much lower.
Second, Tesla's goal with the Model S/X is not to sell a ton of them. Model S/X is a niche vehicle. It's not a mass market vehicle. That's not the intention nor goal of Tesla. As a niche product, the main goal of Model S/X is to prepare for Gen III by rolling out their 2nd gen tech and to gain profit/revenue to fund Gen III production and rollout. The "first data" point for this is found in the Elon Musk CEO incentive plan (see SEC filings). One of his key milestones is to achieve 30% gross margin for four consecutive quarters. This won't be achieved with Gen III (due out end of 2016 but more likely in 2017). The reason for this is because Elon has been very clear (ie., at Teslive talk) that Gen III will be a much lower margin vehicle. I'm expecting a 15-18% gross margin goal over the long term. However, in the short-term (ie., first few years of production) Gen 3 will likely have a much lower gross margin reality (i.e, 5-10%).
Third, Tesla is likely to raise the price of the Model S/X rather than lower it. Now, this was a tough thing to digest for me. Initially I was hoping that Tesla would lower the cost of the Model S/X over time and by making it more affordable it would increase demand significantly. However, during a factory tour during the Teslive weekend I asked the Tesla rep if Tesla would ever lower the price of the Model S/X to make it more affordable as battery prices decrease. His answer was an emphatic, "No. Tesla will not lower the price of the Model S/X, ever." He said that cars actually increase in price (ie., with inflation) rather than get cheaper over time, and that the Model S/X will follow that as well. I do foresee the battery range increasing, though the base price for the Model S will likely rise slightly over time. This matches their recent price hikes with options. Also, it matches the ceo incentive plan of reaching 30% gross margin for four consecutive quarters (and Tesla needs to do this before Gen III or else they likely won't have a chance ever to reach it).
So, what will the demand for Model S/X look like in 2018-2019, and could Tesla sell 300k Model S/X cars by then? Well, I'm not saying that it's completely impossible because anything is possible. But we need to look at what's likely. What's likely is that Tesla sells somewhat more than the 90k/year Model S/X cars they anticipate selling in the 2019-2020 time period. I would say something between 100k and 150k cars (ie., 80k Model S and 70k Model X). Again, sure it could be more but we need to come up with a realistic middle ground and that seems to be fair.
Let's go back to Sal's price target and forecast. We already see some major flaws:
1. 300k Model S/X in 2019 is way too high to use as a forecast. This should be 100-150k max (based on Tesla's own forecasts in several years, the 30% gross margin goal, and rising base price for Model S/X).
2. Gen 3 will have much lower margins that Sal is forecasting for the first few years. I'm forecasting 5-10% gross margin for the first few years of Gen 3 (eventually rising to 10-15%, and then eventually to 15-18%).
Let's examine some more flaws.
Sal's forecast of expenses seem way overly optimistic, especially in operating expenses. Tesla will be growing like crazy and as a result their expenses will be growing rapidly. Sal's expense growth rate is way too low. Expense growth looks like a moderate growth company, not a fast growth company like Tesla.
Let's try to present a more realistic alliterative 2019 forecast. Everything starts with # units sold and the mix, then gross margin and then profit. Here's what I'm thinking for 2019. I'm going to leave out specific line items and hit the main basics (I think this is a more accurate way to forecast for periods such far out like 2019).
1. Revenue: approximately $28 billion
125k Model S/X (ASP of $88k) = $11b
375k Gen 3 Sedan (ASP of $45k) = $16.875b
2. Gross Margin: $5.32 billion (19% of revenue)
33% of $11b for Model S/X = $3.63b
10% of $16.875 for Gen 3 = $1.69b
3. Operating Expenses: $2.52 billion (9% of revenue)
This is the toughest to forecast, but I'm forecasting 8-10% of revenue (BMW's operating expenses appear to be around 15%, Toyota's are about 9-10%). I think 8-10% is actually fairly optimistic. It could be closer to BMW's though. But let's be a bit optimistic and forecast 9% operating expenses. (Note: if we show operating expenses closer to 12-15%, then net profit decreases significantly as does valuation and stock price forecast.)
4. Operating Income : $2.8 billion (10% of revenue)
5. Net profit: $2 billion
I'm being generous here as well. This is post tax, adjustments, etc.
6. P/E multiple: 50
Ok, let's accept Sal's proposed 50 P/E because Tesla will still be super growth mode.
7. Valuation: $100 billion market cap ($2b earnings x 50 P/E)
8. Stock price: $714
based on 140m shares (after some dilution and maybe another offering)
Alright, there you have it. $714/share in 2019.
Now, a disclaimer. 2019 is so far off and Tesla's is a high growth stock so it's really impossible to expect to be able to forecast an accurate assessment of TSLA's valuation, revenue, profit, etc several years out from now. So, this is more of an exercise in what could happen if Tesla sold 500k cars in 2019. I think we're looking at a possible stock price of $714, and not $2456 as proposed by Sal's article.
Now, do I think TSLA could be higher? Sure. But the way I think Tesla could be higher is mainly through an increased P/E multiple that investors give TSLA because demand for Gen 3 is crazy high.
So, I think it's possible for investors to give TSLA a 75 P/E. In that case, we could be looking at a $150b market cap and a share price of $1071. So, if you had good reasoning and numbers, I probably wouldn't argue against you if you were to say you expect TSLA to be at $1000 in 2019. I would say it's possible with an exuberant investor mood/sentiment (ie., 75 P/E multiple). But saying that you expect TSLA to be at $2456 in 2019 with figures that aren't realistic… to me, that's ungrounded exuberance. And to me, that can be very dangerous because it clouds our discernment. We're already dealing with a hyper volatile super growth stock in TSLA. And IMO we need to have a super sharp discernment to filter through the facts and focus on "first data" and not just speculation based on feeling/imagination. That can just add to the noise. We need more signal, and if we need to speculate (ie., forecast numbers) then it should be grounded on what we know to be true (ie., Tesla's own goals for cars, gross margin, etc).
Note:
I think there's two different conversations happening on this thread. One is about Sal's forecast for the next several years (until 2019). That's what I focused on in my post here. Second is about the longer term potential (ie., # units) for Tesla over the next 10-15 years.
In the next several years (ie., until 2019) I think Tesla will be severely production constrained. Personally, I think demand for Gen3 will be beyond anything we've ever seen for a car. I think it'll be mania. But, the reality is Tesla won't be able to produce all the Gen3 cars people want until probably several years after they reach 500k yearly production. In other words, demand will grow significantly faster than production.
I think we need to be realistic about the next several years. I think the most realistic forecast is to follow Tesla's own goals, and to look for a 500k yearly production rate in 2019 or so. I actually think this is quite optimistic. Scaling to 500k cars by 2019 will not be easy in terms of scaling production and securing batteries, etc, but I think it's possible. Anything significantly more than 500k cars in 2019 (ie., 1 million cars), I don't think is realistic. However, I do think the demand for Gen 3 will be high and will only grow. So, I do see Tesla being able to sell millions of Gen 3 in the 2020s (see Short-Term TSLA Price Movements - Page 616).
Elon made an actual bet with someone that by 2030 half the new cars sold will be electric. He's mentioned several times in previous interviews that by 2028 it could be possible. Recently, as you've noted, he's made some references that it could be possible in 12-13 years, or most recently, in the Bloomberg interview, in 10 years. But overall, I think you need to "interpret" this. The way I interpret it is that if everything goes exactly right, then half the new vehicles sold in 10-12 years could be electric. But Elon could be thinking that this is only a 5% possibility, but he's putting it out because it's something that's he's hoping for. But realistically, the greater odds is that it takes more time and even his 2030 estimate is optimistic and that's what I'm holding him to.
That said, the two things that will fuel TSLA's stock price and investor exuberance will likely by:
1. Size of the EV market and belief that majority of new cars sold will be electric in near future (by 2030 or earlier).
2. Belief that Gen3 will be $35k and will perform better than a BMW 3 series, thus creating colossal demand.
The combination of those two beliefs will likely form the investment thesis for many TSLA investors over the next few years.
Alright, now that I've had a night to sleep on it, I'll share my thoughts on Sal's 2019 forecast.
First, overall I think his modeling is very poor. The article was published on July 3, 2013 but by then we already had enough info to make much more realistic forecasts for the next several years. One of the key pieces of info is this article published on May 27, 2013:
Tesla Motors Inc (TSLA) Envisions Selling Around 500K Units: Long Term
In the article Goldman visits Tesla's factory and interviews Elon Musk. Here's the key quote:
"Longer term, Tesla Motors Inc (NASDAQ:TSLA) envisions selling around 500K units through a combination of the Gen 3 sedan (around 200K units), Gen 3 SUV (about 150K units), Model S/X (roughly 90K units) and the next Gen Roadster. From a timing standpoint, the company intends to start deliveries of the Model X in 2015 and hopes to start the Gen 3 production by 2017."
Now let's dissect that quote a bit.
"Longer term" - now that's kind of vague. I don't take that as 10-15 years away. Rather, that's more a longer term goals several years out. Elon has eluded that he envisions that Fremont factory running at full capacity by 2020 or so. So, I'm taking this quote to mean this is Tesla's goals for around 2019-2020.
"Gen 3 sedan, SUV, next Gen Roadster" - now I think Tesla will likely push off the next gen Roadster and focus on Gen III. I think the sedan will overwhelm Tesla with demand, so they might need to push off Gen 3 SUV for a year or two (similar to Model X following Model S).
But overall, we see the goal of Tesla over the next several years is to be filling out the Fremont factory's capacity and to sell 90k Model S/X annually and 350k+ Gen III (maybe more like 400k) per year.
Sal's 2019 forecasts are completely based on Tesla selling almost 300k Model S/X in 2019, and another 300k+ Gen 3 as well. Here's why I think 300k Model S/X in 2019 is vastly unrealistic.
First, Tesla isn't planning to produce that many Model S/X in 2019. It's more evident from the "first data" info we have, that Tesla is expecting to produce/sell 90k Model S/X on a yearly basis in several years. Now, Tesla could be vastly underestimating Model S/X demand, and they could sell a lot more than 90k/year. But I don't think it's realistic to base a forecast off of 300k S/X sales per year when the company is forecasting much lower.
Second, Tesla's goal with the Model S/X is not to sell a ton of them. Model S/X is a niche vehicle. It's not a mass market vehicle. That's not the intention nor goal of Tesla. As a niche product, the main goal of Model S/X is to prepare for Gen III by rolling out their 2nd gen tech and to gain profit/revenue to fund Gen III production and rollout. The "first data" point for this is found in the Elon Musk CEO incentive plan (see SEC filings). One of his key milestones is to achieve 30% gross margin for four consecutive quarters. This won't be achieved with Gen III (due out end of 2016 but more likely in 2017). The reason for this is because Elon has been very clear (ie., at Teslive talk) that Gen III will be a much lower margin vehicle. I'm expecting a 15-18% gross margin goal over the long term. However, in the short-term (ie., first few years of production) Gen 3 will likely have a much lower gross margin reality (i.e, 5-10%).
Third, Tesla is likely to raise the price of the Model S/X rather than lower it. Now, this was a tough thing to digest for me. Initially I was hoping that Tesla would lower the cost of the Model S/X over time and by making it more affordable it would increase demand significantly. However, during a factory tour during the Teslive weekend I asked the Tesla rep if Tesla would ever lower the price of the Model S/X to make it more affordable as battery prices decrease. His answer was an emphatic, "No. Tesla will not lower the price of the Model S/X, ever." He said that cars actually increase in price (ie., with inflation) rather than get cheaper over time, and that the Model S/X will follow that as well. I do foresee the battery range increasing, though the base price for the Model S will likely rise slightly over time. This matches their recent price hikes with options. Also, it matches the ceo incentive plan of reaching 30% gross margin for four consecutive quarters (and Tesla needs to do this before Gen III or else they likely won't have a chance ever to reach it).
So, what will the demand for Model S/X look like in 2018-2019, and could Tesla sell 300k Model S/X cars by then? Well, I'm not saying that it's completely impossible because anything is possible. But we need to look at what's likely. What's likely is that Tesla sells somewhat more than the 90k/year Model S/X cars they anticipate selling in the 2019-2020 time period. I would say something between 100k and 150k cars (ie., 80k Model S and 70k Model X). Again, sure it could be more but we need to come up with a realistic middle ground and that seems to be fair.
Let's go back to Sal's price target and forecast. We already see some major flaws:
1. 300k Model S/X in 2019 is way too high to use as a forecast. This should be 100-150k max (based on Tesla's own forecasts in several years, the 30% gross margin goal, and rising base price for Model S/X).
2. Gen 3 will have much lower margins that Sal is forecasting for the first few years. I'm forecasting 5-10% gross margin for the first few years of Gen 3 (eventually rising to 10-15%, and then eventually to 15-18%).
Let's examine some more flaws.
Sal's forecast of expenses seem way overly optimistic, especially in operating expenses. Tesla will be growing like crazy and as a result their expenses will be growing rapidly. Sal's expense growth rate is way too low. Expense growth looks like a moderate growth company, not a fast growth company like Tesla.
Let's try to present a more realistic alliterative 2019 forecast. Everything starts with # units sold and the mix, then gross margin and then profit. Here's what I'm thinking for 2019. I'm going to leave out specific line items and hit the main basics (I think this is a more accurate way to forecast for periods such far out like 2019).
1. Revenue: approximately $28 billion
125k Model S/X (ASP of $88k) = $11b
375k Gen 3 Sedan (ASP of $45k) = $16.875b
2. Gross Margin: $5.32 billion (19% of revenue)
33% of $11b for Model S/X = $3.63b
10% of $16.875 for Gen 3 = $1.69b
3. Operating Expenses: $2.52 billion (9% of revenue)
This is the toughest to forecast, but I'm forecasting 8-10% of revenue (BMW's operating expenses appear to be around 15%, Toyota's are about 9-10%). I think 8-10% is actually fairly optimistic. It could be closer to BMW's though. But let's be a bit optimistic and forecast 9% operating expenses. (Note: if we show operating expenses closer to 12-15%, then net profit decreases significantly as does valuation and stock price forecast.)
4. Operating Income : $2.8 billion (10% of revenue)
5. Net profit: $2 billion
I'm being generous here as well. This is post tax, adjustments, etc.
6. P/E multiple: 50
Ok, let's accept Sal's proposed 50 P/E because Tesla will still be super growth mode.
7. Valuation: $100 billion market cap ($2b earnings x 50 P/E)
8. Stock price: $714
based on 140m shares (after some dilution and maybe another offering)
Alright, there you have it. $714/share in 2019.
Now, a disclaimer. 2019 is so far off and Tesla's is a high growth stock so it's really impossible to expect to be able to forecast an accurate assessment of TSLA's valuation, revenue, profit, etc several years out from now. So, this is more of an exercise in what could happen if Tesla sold 500k cars in 2019. I think we're looking at a possible stock price of $714, and not $2456 as proposed by Sal's article.
Now, do I think TSLA could be higher? Sure. But the way I think Tesla could be higher is mainly through an increased P/E multiple that investors give TSLA because demand for Gen 3 is crazy high.
So, I think it's possible for investors to give TSLA a 75 P/E. In that case, we could be looking at a $150b market cap and a share price of $1071. So, if you had good reasoning and numbers, I probably wouldn't argue against you if you were to say you expect TSLA to be at $1000 in 2019. I would say it's possible with an exuberant investor mood/sentiment (ie., 75 P/E multiple). But saying that you expect TSLA to be at $2456 in 2019 with figures that aren't realistic… to me, that's ungrounded exuberance. And to me, that can be very dangerous because it clouds our discernment. We're already dealing with a hyper volatile super growth stock in TSLA. And IMO we need to have a super sharp discernment to filter through the facts and focus on "first data" and not just speculation based on feeling/imagination. That can just add to the noise. We need more signal, and if we need to speculate (ie., forecast numbers) then it should be grounded on what we know to be true (ie., Tesla's own goals for cars, gross margin, etc).
Note:
I think there's two different conversations happening on this thread. One is about Sal's forecast for the next several years (until 2019). That's what I focused on in my post here. Second is about the longer term potential (ie., # units) for Tesla over the next 10-15 years.
In the next several years (ie., until 2019) I think Tesla will be severely production constrained. Personally, I think demand for Gen3 will be beyond anything we've ever seen for a car. I think it'll be mania. But, the reality is Tesla won't be able to produce all the Gen3 cars people want until probably several years after they reach 500k yearly production. In other words, demand will grow significantly faster than production.
I think we need to be realistic about the next several years. I think the most realistic forecast is to follow Tesla's own goals, and to look for a 500k yearly production rate in 2019 or so. I actually think this is quite optimistic. Scaling to 500k cars by 2019 will not be easy in terms of scaling production and securing batteries, etc, but I think it's possible. Anything significantly more than 500k cars in 2019 (ie., 1 million cars), I don't think is realistic. However, I do think the demand for Gen 3 will be high and will only grow. So, I do see Tesla being able to sell millions of Gen 3 in the 2020s (see Short-Term TSLA Price Movements - Page 616).
Elon made an actual bet with someone that by 2030 half the new cars sold will be electric. He's mentioned several times in previous interviews that by 2028 it could be possible. Recently, as you've noted, he's made some references that it could be possible in 12-13 years, or most recently, in the Bloomberg interview, in 10 years. But overall, I think you need to "interpret" this. The way I interpret it is that if everything goes exactly right, then half the new vehicles sold in 10-12 years could be electric. But Elon could be thinking that this is only a 5% possibility, but he's putting it out because it's something that's he's hoping for. But realistically, the greater odds is that it takes more time and even his 2030 estimate is optimistic and that's what I'm holding him to.
That said, the two things that will fuel TSLA's stock price and investor exuberance will likely by:
1. Size of the EV market and belief that majority of new cars sold will be electric in near future (by 2030 or earlier).
2. Belief that Gen3 will be $35k and will perform better than a BMW 3 series, thus creating colossal demand.
The combination of those two beliefs will likely form the investment thesis for many TSLA investors over the next few years.
Dave, good insight. We will wait for Sal to chime in.
Regardless, I think everyone would be ecstatic if tsla hits $500 in 5 years. Anything over 3x is hard to predict and debate.
Regardless, I think everyone would be ecstatic if tsla hits $500 in 5 years. Anything over 3x is hard to predict and debate.
I agree Tesla has had mixed results with keeping forecasted release dates. But to Tesla's credit, in January 2010 in their IPO prospectus (http://www.sec.gov/Archives/edgar/data/1318605/000119312510017054/ds1.htm) they said that they would ship the Model S in 2012, which they did. Most skeptics thought it was impossible, but they did it which I think is an amazing feat. Props to Elon and team for delivering the Model S as promised in January 2010, and for not compromising the safety or performance of the car.
I just read the summary part. Give Tesla credit they really executed their plan with precision! Every word is right on.
"
The Model S, which is planned to compete in the premium sedan market, is intended to have a significantly broader customer base than the Tesla Roadster. We currently intend to begin volume production of the Model S in 2012 with a target annual production of up to approximately 20,000 cars per year. We currently anticipate introducing the base Model S at an effective price of $49,900 in the United States, assuming and after giving effect to the continuation of a currently available United States federal tax credit of $7,500 for the purchase of alternative fuel vehicles. Even without this tax credit, we believe the Model S will be competitive from a pricing perspective with other premium sedans. "
One thing puzzled me is the shorts continue to doubt what Tesla and what Elon says. ZEV credit controversy , GAPP conspiracy, Gen III hype, battery cost all those nonsense. What does it take to get them to think Tesla is for real??
I can envision the Tesla will have figured out how to simultaneously share the line with S and X. Then when we attend the G3E debut there are both variants on stage so from day one the line is set up for both making both. And where is the truck? They have been dropping hints for a year now.
PS
I want an E convertible (or two)
I think Sal did an excellent job but I have a couple of issues to point out. First, he has no dilution. There will obviously be stock options that will vest which will increase the number of shares outstanding. I doubt there is a need for another offering so I would increase the shares outstanding to 125m by 2020. Second, his tax rate is too high. The average corporate tax rate in the U.S. is about 14%. With Tesla doing so much business outside of the U.S. it's likely they can lower their effective tax rate even more. This obviously has a very positive impact on earnings.
On another note, Elon recently said that due to the space that the battery assembly takes up, NUMMI likely will produce less than 500k cars/year. Maybe they will add more space with the adjacent property they just purchased.
On another note, Elon recently said that due to the space that the battery assembly takes up, NUMMI likely will produce less than 500k cars/year. Maybe they will add more space with the adjacent property they just purchased.
Oh, no doubt they did a great job getting the S out. It could have been later.
The reality is they're 0 for 3 on estimating release dates from the point where they first started talking about them. Sal's analysis is just way too optimistic on Gen3.
I don't see 5k Model X in 2014 either. The S shipped about 5k in 2013. Remember that about a 9 months before in Oct(?) of 2012 Tesla was giving test rides of the S from cars stamped by the dies on the assembly line (but hand built from there). They barely have "do not touch" prototypes of the X now. There's no way they're even remotely in the same point in the process with the X or we'd be getting ready for test rides right now.
"One thing I missed. I have to say it is an impressive model considering the it was done in oct 2012, when TSLA was at $30 range. So far for 2013 the trajectory is right on. "
@kevin99 - Actually this model is from July 3 of this year. Sal published a more simple model on April 29 that targeted the stock to be $1,149 by 2019. He updated that model and added much detail to it for this article.
@kevin99 - Actually this model is from July 3 of this year. Sal published a more simple model on April 29 that targeted the stock to be $1,149 by 2019. He updated that model and added much detail to it for this article.
I think you've got to give them some slack because in late 2008 they almost went bankrupt with the Great Recession drying up financing sources. They had to fire a ton of people and that significantly lengthened time frames for the Model S. But once they got on their feet and went IPO, they've been very good with execution on timing with the Model S. Regarding Model X, it's not that they couldn't deliver the Model X as planned it's more that they changed their plans to focus on Model S because of high demand (and possibly to get 30% gross margin for four consecutive quarters in 2014).
With Gen 3, Elon says late 2016 or 2017. I'd be surprised if they get something out in 2016. But I'm more expecting 2017. But I do think it'll dependent on when they can release their prototype vehicle and then move into alpha, beta, etc. And a lot of that will depend if they can get battery costs down and secure the cell supply required for mass production.
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Model X, Gen3 Sedan, and next gen Roadster for me.
But they were building a factory from an empty building too. There will be (and is) a lot of seasoned veterans in Tesla's walls now. They know what Elon wants and his level of perfection. They know the CAD tools, Franz's style, the shortcuts to production, the stamping, painting, assembly robots and floor machines. Should be 1/2 the time to production this time out.
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Model X, Gen3 Sedan, and next gen Roadster for me.[/QUOTE]
Does anyone know if the Roadster will be a different design from the previous Lotus body? I personally don't like the looks of that particular Lotus body style. I have paused on purchasing a Porsche 911 hoping Tesla will come out with a more muscular/ sexy mature sports car with the same performance characteristics of their prior Roadster. If they do, will buy one of those too in addition to a Model E Convertible..
Model X, Gen3 Sedan, and next gen Roadster for me.
[/QUOTE]Does anyone know if the Roadster will be a different design from the previous Lotus body? I personally don't like the looks of that particular Lotus body style. I have paused on purchasing a Porsche 911 hoping Tesla will come out with a more muscular/ sexy mature sports car with the same performance characteristics of their prior Roadster. If they do, will buy one of those too in addition to a Model E Convertible..
sundaymorning
Active Member
If Gen 3 is delayed a year, just delay Sal's estimates by a year--there, problem solved. :tongue:
Jonathan Hewitt
Active Member
And just take his PPS in half for all the other debatable issues. I'll settle for $1,000 a share by 2019
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