How Big do you think TSLA will get and when?

[drinkerofkoolaid]

I'm sure he would be very motivated to get this. This would increase his control of TSLA and could give him some money to dabble in outher projects later on.

Getting to, and colonizing Mars will require a lot of money. Just saying. :biggrin:

A a while back an auto executive mentioned he was confident Tesla would ultimately become the largest automobile manufacturer in the world, which would imply at least $200-300 billion. I'll try to find the quote.

 

[tander]

$50B (~$385 a share) in 2016 is doable. The following things need to become true.

Build over 55,000 vehicles in 2015.
Plan to build over 95,000 vehicles in 2016.
Ship the Powerpack before the end of August 2015.
Ship the Model X before the end of September 2015.
Get the Gigafactory up and running before the end of March 2016.
Increase the rate of new service centers.
Increase the rate of new Superchargers.
Don't have any major screw-ups.

Did they state Mar 16' for the Giga somewhere? I think I heard maybe a miii glimpse then too. And with regard toward Musk being motivated by money...by nature or necessity he is, that's why they structured his stock options to be so execution based in the first place, they were trying to line it up so the cars are engineering successes but also so the business is a financial success.

 

[MostlyStock]

Did they state Mar 16' for the Giga somewhere? I think I heard maybe a miii glimpse then too. And with regard toward Musk being motivated by money...by nature or necessity he is, that's why they structured his stock options to be so execution based in the first place, they were trying to line it up so the cars are engineering successes but also so the business is a financial success.

I saw or heard it somewhere before. Q1 2016 was confirmed on today's conference call.

- - - Updated - - -

For some perspective, Tesla must reach $43.2 billion of market cap and achieved the following 10 goals by 2022, for Elon to be awarded the option to buy 5.3M shares at $31.17:

After today's conference call $50B isn't very likely in 2016.

4. ☐ Successful completion of the Gen III Engineering Prototype (Alpha)

Early 2017 (This is not the concept car being shown March 2016).

5. ☐ Successful completion of the Gen III Vehicle Prototype (Beta)

Mid 2017.

6. ☐ Completion of the first Gen III Production Vehicle

2017 Maybe.

7. ☐ Gross margin of 30% or more for four consecutive quarters

Q2 was 23.4% so a year away best case.

8. ☐ Aggregate vehicle production of 100,000 vehicles

Guidance of demand limited production of 83,200 to 93,600 vehicles for 2016 (1,600-1,800 a week) was given for today's conference call.

9. ☐ Aggregate vehicle production of 200,000 vehicles
10. ☐ Aggregate vehicle production of 300,000 vehicles

I have no clue.

 

[30seconds]

I saw or heard it somewhere before. Q1 2016 was confirmed on today's conference call.

- - - Updated - - -


After today's conference call $50B isn't very likely in 2016.



Early 2017 (This is not the concept car being shown March 2016).



Mid 2017.



2017 Maybe.



Q2 was 23.4% so a year away best case.



Guidance of demand limited production of 83,200 to 93,600 vehicles for 2016 (1,600-1,800 a week) was given for today's conference call.



I have no clue.

#8 should happen in Q3 and 200,000 maybe in Q4 2016 or Q1 2017. 300,000 in very late 2017 (depends on model 3 lunch timing) or 2018

 

[EVNow]

Out of the $1T worldwide market, I'm starting to think its going to be half Tesla's if the rest of the world hasn't already gotten a move on. $500B revenue and 20% margins would be $100B gross income instead of $70B.

LOL. So, you think by 2020 Tesla will make 500k cars a year - and in the next 5 years (2025) - they'll make 50 Million cars a year ?

And I think that competitors have no idea of how fast their business is going to collapse on them when Tesla hits real volume.

They'll get the idea when Tesla starts buying a Fremont size factory every month - since that is what is needed to get 50 Million cars a year capacity (100 factories of the Fremont size).

 

[RobStark]

LOL. So, you think by 2020 Tesla will make 500k cars a year - and in the next 5 years (2025) - they'll make 50 Million cars a year ?


They'll get the idea when Tesla starts buying a Fremont size factory every month - since that is what is needed to get 50 Million cars a year capacity (100 factories of the Fremont size).

I agree 50% market share in 2025 is absurd.

But you don't need to get half the unit sales to get half the dollar sales.

 

[adiggs]

I agree 50% market share in 2025 is absurd.

But you don't need to get half the unit sales to get half the dollar sales.

I also think 50% market share to 2025 is both absurd, and amazingly bad news if that's what its going to take. The organization won't be able to scale that fast, and it ultimately becomes a problem for species survival (the way I see things - not trying to stir or get into that conversation; it's how I see it). We need there to be other big auto makers in the world and they need to be building EV's. I'm afraid their internal incentives and decision making is going to make it hard for them.

I do think that the other automakers are caught in the Innovator's Dilemma - a disruptive innovation has happened to them, and their sustaining innovations business has them wrapped up in a set of economic incentives that may make it impossible for them to react effectively to the threat they face. We can already see in their reactions that it will be at minimum, hard.

I'm AFRAID that sustainable transport is going to require that Tesla take 50% market share (I cheerfully admit that I'll make a pile of money on my piddling stack of Tesla shares if this is the road we drive down).

On the plus side - Tesla won't need to build a Fremont sized factory for building cars every month or whatever; the other automakers will be closing their own Fremont sized factories plenty fast for Tesla to buy them out of bankruptcy (good for investors, bad for EV adoption).


And as Rob hints - you don't need 50% market share to move the market. We can watch what happens to Porsche over the next 2 or 3 years with the Model X ramp and continues Model S sales - I expect Porsche is heading back to being a niche sports car maker, and they will need to shrink dramatically from where they are at today.

I think of Porsche as my leading indicator for what's coming to the rest of the auto makers sooner or later if they don't get a move on. And the more they get a move on, the more they validate the whole approach, and the faster everything changes.

 

[EVNow]

I think some assume radical changes will happen very quickly in the auto industry because it happened in, say, cell phones.

I think changes happen in auto industry much more slowly. For one thing scaling up is very difficult. Second, people are a lot more conservative with a large purchase - especially one that can kill you. How many will buy Chinese made cars vs Chinese made cell phones, for example.

The switch over from ICE to EV will unfortunately take decades, not just a few years. This gives even the laggards like Toyota and Honda time to catch up. All the big OEMs will survive the transition, some with government help. Do you really think Germany will let MB or BMW go under? How about Japan and Toyota?

The other thing to remember is that EV infrastructure needs to expand a thousand times before the average person would consider owning an EV.

 

[RobStark]

Japan will not let Toyota fail but they will let Mitsubishi Motors and Suzuki fail. And probably Subaru and Mazda.

When Renault rescued Nissan the Japanese government was not looking too coddling. I would not be feeling too confident in a rescue if I was a Honda shareholder.

BMW is among the most likely to survive among the majors and least likely to be rescued by the German Government. Zero chance Germany allows VW to fail.

Washington has no appetite to rescue Chrysler yet again. And Rome less so for Fiat. After they moved legal headquarters to The Netherlands but somehow domiciled in London for tax purposes.

I don't know if Paris pours more money into Peugeot Citroen.

The auto market moves much slower than mobile phones but it also takes much more time and money to overhaul your product line.Product planners at GM are starting to talk to suppliers today about parts for the 2026 Chevy Malibu. Think Detroit and and the subcompact and compact car.

Although VW and Toyota will survive they will be much diminished companies.

So much of Toyota's overseas strength is derived from the CA market. That is where Tesla will feast.

Toyota's domestic market is shrinking 1-2M people every year. People over 85 years old don't buy too many cars.

And many Germans may delay purchase until VW catches up or buy a slightly inferior VW but non-Germans won't. And their domestic market is only 83M people.

Agreed zero chance South Korea lets Hyundai-Kia fail. With a close relationship with LG Chem and Samsung SDI splitting purchases almost evenly they should have an inside track here.

 

[marcon]

For some perspective, Tesla must reach $43.2 billion of market cap and achieved the following 10 goals by 2022, for Elon to be awarded the option to buy 5.3M shares at $31.17:

1. ☑ Successful completion of the Model X Engineering Prototype (Alpha)
2. ☑ Successful completion of the Model X Vehicle Prototype (Beta)
3. ☐ Completion of the first Model X Production Vehicle
4. ☐ Successful completion of the Gen III Engineering Prototype (Alpha)
5. ☐ Successful completion of the Gen III Vehicle Prototype (Beta)
6. ☐ Completion of the first Gen III Production Vehicle
7. ☐ Gross margin of 30% or more for four consecutive quarters
8. ☐ Aggregate vehicle production of 100,000 vehicles
9. ☐ Aggregate vehicle production of 200,000 vehicles
10. ☐ Aggregate vehicle production of 300,000 vehicles

Source: WSJ

I don't think 50-300 millions are a motivator for Musk

I don't think he's motivated by money, either, but 5.3 million shares * (265.50 - 31.17) is 1.24 billion. Not exactly pocket change.

I'm sure he would be very motivated to get this. This would increase his control of TSLA and could give him some money to dabble in outher projects later on.

Unless Tesla offers more shares till then, this will be more than 4% of the new total of TSLA shares. And by fullfilling all those goals Tesla will be worth a lot more than today. So not only a VERY good motivator in the financial sense, but also in terms of keeping control of Tesla in case of further public offerings.
While I also agree that Elon is probably not primarily motivated by money, I think we are all aware of what he can accomplish with that kind of money, and I am sure he is, too.

 

[Ludus]

There is an interesting route to disrupting the auto industry and hitting $1 Trillion market cap by the mid 2020's suggested by Elon's non response in the last quarterly conference call.

Consider the implications if Tesla takes an aggressive lead in offering it's own self driving cars with it's own Uber like system. At best a $40K Car would earn a company $6-8K profit being sold to a driver/owner under the conventional industry model, so a million cars might make $6-8B.

If instead of selling cars, Tesla puts them into it's Cars-As-A-Service system where they work 24/7 Tesla could get 10X that profit from each car. Uber cars make about $120K/Yr on a 24/7 basis gross and a Tesla car would likely put in several years of service before being sold. Even with the cost of a battery swapping station for each service area and other expenses that translates to profits over 125%. A million cars a year could yield $50B in profit. At a PE of 20 that's a Trillion dollar market cap.

Cars-As-A-Service would displace multiple ICE cars for each Tesla made instead of just one making this a much more effective route to Tesla's Green objectives. The disruptive implications might slow adoption by conventional car companies.

Viewed as conventional player trying to sell cars to end users and make a 20% return if they're lucky Tesla will take a long time to grow past it's current valuation. If they have unique position in a phase change in the global auto market that makes them an order of magnitude more profitable than the competition for a while they could grow past it very quickly.

Tesla currently describes it's AutoPilot efforts as gradually adding driver assist features not a "self-driving" car but Elon also places full autonomy about 5 years away at about the time Tesla would be approaching a million units capacity. Autonomy might be gradual until it's suddenly something quite different.

What might this look like in the early 2020's? Tesla picks target markets and rolls out full 24/7 service in direct competition with Uber. Massive media and social media attention plus a few promotions would assure awareness. 1000 Teslas in a dense service area might have a couple automated battery swap stations plus scattered parking lot snake chargers. Target areas might be clustered to approximate Uber/Lyft service areas. Pricing might be no higher than Uber/Lyft and sometimes lower. No surge pricing needed since no need to motivate drivers. Tesla Black with S and X.

This business model lets Tesla capture the efficiencies of it's tech rather than just pitch them as reasons to buy. Lower energy costs, lower maintenance, network efficiencies just go straight to the bottom line.

 

[eloder]

I think some assume radical changes will happen very quickly in the auto industry because it happened in, say, cell phones.

I think changes happen in auto industry much more slowly. For one thing scaling up is very difficult. Second, people are a lot more conservative with a large purchase - especially one that can kill you. How many will buy Chinese made cars vs Chinese made cell phones, for example.

The switch over from ICE to EV will unfortunately take decades, not just a few years. This gives even the laggards like Toyota and Honda time to catch up. All the big OEMs will survive the transition, some with government help. Do you really think Germany will let MB or BMW go under? How about Japan and Toyota?

The other thing to remember is that EV infrastructure needs to expand a thousand times before the average person would consider owning an EV.

I think the rate of adoption might be surprising.

A Model 3 like vehicle will save many Americans money from day 1 of buying it. Less gas costs, less maintenance costs, even compared to cars that are fully paid for.

You already see this with vehicles like the Leaf, but in a much more niche fashion. People are literally paid to lease a Leaf, even if they still keep/own their ICE, for those who drive in a "goldilock's zone" of commuting miles/climate/etc.

Once that niche expands to include "everyone but renters", there will be a huge jump of people. Once Tesla solves the charging problem for renters (if they do it right with supercharger and/or autonomous driving and auto-charging), there will be another huge jump of people. The Model 3 won't fully make that first jump unless they can match the leasing deals on Leafs and other low-cost EVs, but they'll capture a huge chunk of the market. Once that first huge chunk is captured, you'll see large numbers of converts based on performance/experience alone.

The funny thing about the basic phone to smartphone conversion is that smartphones are much more expensive than basic phones. Much more expensive plans, much more expensive devices. Car cycle life is 3-4x of a basic phone's cycle life but the advantages of a Model 3-like vehicle over the average gas car is incredible--it's like going from basic phones to smartphone, but you save a lot of money by doing so.

It's actually not much different than Ford and gas cars earlier this century, ironically enough. Gas cars going from a niche to exploding, well before infrastructure was in place, simply because cost was lower and the vehicles were superior.