How Many Cars can Tesla Sell?

[Cattledog]

In 2012, the three largest luxury car makers - BMW, Mercedes Benz, and Lexus - sold over 799,000 cars in the US, up from about 691,000 cars the year before. In 2011, the top ten luxury car makers sold just over 1.5M cars in the US. The tenth largest brand, Volvo, sold 65,000. Porsche sold about 35,000.

Where does Tesla fit in:

2013 - First Full Year Model S Production?
2015 - First Full Year Model X Production?
2016 - First Full Year Gen 3 Production?

I say as follows for US only:

2013 - 25,000 Model S
2015 - 40,000 Model S, 15,000 Model X
2016 - 40,000 Model S, 15,000 Model X, 40,000 Gen 3

FYI, Porsche sold about 35,000 cars in the US and 30,000 in China last year and is now in the process of doubling the number of dealers.

BMW aims to sell over 300,000 cars a year in China from this year forward.

Porsche's Market cap today is $20B, BMW's is $50B. Tesla's is $4B.

This company could need to be making 200,000 cars a year in four years. Can they?

 

[CapitalistOppressor]

In 2012, the three largest luxury car makers - BMW, Mercedes Benz, and Lexus - sold over 799,000 cars in the US, up from about 691,000 cars the year before. In 2011, the top ten luxury car makers sold just over 1.5M cars in the US. The tenth largest brand, Volvo, sold 65,000. Porsche sold about 35,000.

Where does Tesla fit in:

2013 - First Full Year Model S Production?
2015 - First Full Year Model X Production?
2016 - First Full Year Gen 3 Production?

I say as follows for US only:

2013 - 25,000 Model S
2015 - 40,000 Model S, 15,000 Model X
2016 - 40,000 Model S, 15,000 Model X, 40,000 Gen 3

FYI, Porsche sold about 35,000 cars in the US and 30,000 in China last year and is now in the process of doubling the number of dealers.

BMW aims to sell over 300,000 cars a year in China from this year forward.

Porsche's Market cap today is $20B, BMW's is $50B. Tesla's is $4B.

This company could need to be making 200,000 cars a year in four years. Can they?

With a lot of investment, yes they can. If they get to ~25,000 units for 2013 (which seems reasonable to me), they will be fairly profitable. The bottom line for the year wont look super great because of the hole they are digging out of, and because it will take awhile before they get their margins up. But by the end of the year, they will be very profitable, with a the beginnings of a substantial buildup of cash, to go with the ~$200 million or so they are sitting on from their last secondary.

Frankly, I think your estimates for Gen III are very low. The SuperCharger network will be built out, and if the cars maintain a 200+ mile range, and hit their $30-$50k price points, I'd look for a sales figure of 100k+. In fact, I think Tesla might have trouble making money if they don't get their volumes up, as I seriously doubt they will be able to have a 25% margin on those cars, and still hit their price point.

Because we are looking 3-4 years out before Gen III comes online, Tesla will have accumulated a fair amount of cash. If they hit the sales numbers you specify for Model S and X (which also look reasonable to me), they might have well in excess of a billion dollars of free cash on their books. That is almost certainly enough to invest in a new line which can output the Gen III at the volumes needed. And by that time they will also be in a position to issue debt on the commercial market, or even perform another secondary if needed.

Honestly, I wouldn't be surprised if folks are throwing money at them by then.

 

[ahimberg]

I don't think we're going to see 25k US sales in 2013. That's more like the worldwide target (and 20k is what they've been publicly mentioning). This year the US % will be higher than future, if the tax benefits stay as good as they are in many of the international markets, we could see some really big numbers...

 

[Alpha]

2015 - First Full Year Model X Production?

I thought 2014 would be the first First Full Year Model X Production, not 2015...
I wouldn't be surprised if the first Production Model X's are rolling off the line in late 2013, given a large part of the engineering is done (in the form of the Model S...)

 

[Cattledog]

CaPOpp - I see 40,000 Gen 3 in 2016, but could easily see double that in 2017, perhaps 100K units. Hence 200K total output in 4 years, 2017 (it is 2013, right? Or I'm messing up my checks?)

Alpha - They announced recently that Model X now rolls off the line in mid-2014, so I expect its 2014 to look like Model S' 2012. So full tilt (hopefully) by 2015.

 

[viperboy]

And don't forget Acura! (Not as big as the others, but I still think it's a competitor.) Acura sold 156k cars last year, specifically ~33k TLs (which I believe is the closest in a size comparison).

2013 - First Full Year Model S Production?
My estimate: 25000
2015 - First Full Year Model X Production?
My estimate: 15000 (I read somewhere that model X was using the same production line, is this true? Wouldn't this create a bottleneck? I'll try to look up the source.)
2016 - First Full Year Gen 3 Production?
My estimate: 30000


These are probably on the low end of expectations, especially considering no advertising, etc.

 

[Cattledog]

Viper - Yes, every year going forward in the US there are going to be about 2M luxury/premium cars sold. Probably over 6M worldwide with Europe, Asia, etc. extrapolating liberally from BMW data in China. Big space out there for Tesla. They don't even need to take away anyone's absolute numbers, if the market for l/p cars expands 5%/yr. that's 300,000 more.

Going long...

 

[Suzieq]

2015 - First Full Year Model X Production?
My estimate: 15000 (I read somewhere that model X was using the same production line, is this true? Wouldn't this create a bottleneck? I'll try to look up the source.)

Factory space won't be a problem, but perhaps parts and hiring employees could be.

 

[vfx]

...
FYI, Porsche sold about 35,000 cars in the US and ....

So two years after ramping up to production speed of one car, Tesla will surpass Porsche in US sales?

 

[Suzieq]

My WAG is that if Tesla can come up with a family car under $35,000 with model S like range, it can sell a whole heck of a lot of them. Not tens of thousands, but hundreds. I think it all comes down to that.

 

[Al Sherman]

L

My WAG is that if Tesla can come up with a family car under $35,000 with model S like range, it can sell a whole heck of a lot of them. Not tens of thousands, but hundreds. I think it all comes down to that.

No question.

 

[artsci]

In 2012, the three largest luxury car makers - BMW, Mercedes Benz, and Lexus - sold over 799,000 cars in the US, up from about 691,000 cars the year before. In 2011, the top ten luxury car makers sold just over 1.5M cars in the US. The tenth largest brand, Volvo, sold 65,000. Porsche sold about 35,000.

Where does Tesla fit in:

2013 - First Full Year Model S Production?
2015 - First Full Year Model X Production?
2016 - First Full Year Gen 3 Production?

I say as follows for US only:

2013 - 25,000 Model S
2015 - 40,000 Model S, 15,000 Model X
2016 - 40,000 Model S, 15,000 Model X, 40,000 Gen 3

FYI, Porsche sold about 35,000 cars in the US and 30,000 in China last year and is now in the process of doubling the number of dealers.

BMW aims to sell over 300,000 cars a year in China from this year forward.

Porsche's Market cap today is $20B, BMW's is $50B. Tesla's is $4B.

This company could need to be making 200,000 cars a year in four years. Can they?

China will prove to be a very dicey market for ICE's. As the government there can dictate policy, the odds are very high that owing to environmental concerns it will strongly regulate ICE's, probably through increasing tax penalties. Tesla will be in better and better position with each passing year.

 

[Zextraterrestrial]

The shared part of the line for the S and the X is mainly robotic or stamping - this is the quickest part of the production from what I've seen. It is the human done jobs that are labor intensive.

 

[aronth5]

CaPOpp - I see 40,000 Gen 3 in 2016, but could easily see double that in 2017, perhaps 100K units. Hence 200K total output in 4 years, 2017 (it is 2013, right? Or I'm messing up my checks?)

Alpha - They announced recently that Model X now rolls off the line in mid-2014, so I expect its 2014 to look like Model S' 2012. So full tilt (hopefully) by 2015.

I don't see a full year of Gen 3 production until 2017. Based on feedback from the Detroit auto show I'd be happy to see any Gen 3's in 2016. No reason to believe Tesla will beat their estimates based on past experience.

 

[anticitizen13.7]

My WAG is that if Tesla can come up with a family car under $35,000 with model S like range, it can sell a whole heck of a lot of them. Not tens of thousands, but hundreds. I think it all comes down to that.

It seems like almost anyone who has encountered a Tesla, driven one, or is lucky enough to own one, comes away from the experience thinking that the vehicle is something of a revelation. The effortless acceleration, elegant design, and intuitive interface are both radically different and largely better than anything that came before. The last time I remember people having a similar experience was the iPhone.

I remember way back when everyone I knew used a Blackberry. Then the iPhone came along, and the elegant designs, bright touch screens, and apps won people over fairly quickly. After one co-worker brought in an iPhone, there was a sure but steady exodus to the iPhone, and that exodus became a flood once the iPhone got 3G capability. At the 35k price point, I think Tesla will be selling every vehicle they can build.

 

[CapitalistOppressor]

It seems like almost anyone who has encountered a Tesla, driven one, or is lucky enough to own one, comes away from the experience thinking that the vehicle is something of a revelation. The effortless acceleration, elegant design, and intuitive interface are both radically different and largely better than anything that came before. The last time I remember people having a similar experience was the iPhone.

I remember way back when everyone I knew used a Blackberry. Then the iPhone came along, and the elegant designs, bright touch screens, and apps won people over fairly quickly. After one co-worker brought in an iPhone, there was a sure but steady exodus to the iPhone, and that exodus became a flood once the iPhone got 3G capability. At the 35k price point, I think Tesla will be selling every vehicle they can build.

The average price of a new car is ~$30,000 right now. If Tesla can build a SuperCharger capable car with the range of the current 60kWh Model S for $35k, they'll sell scads of them. Folks who normally might get a less expensive car will stretch to get the Tesla because the lower TCO will mean it'll still make financial sense, and they'll get better performance and value than ICE cars at that price. The Tesla will be the PRACTICAL option.

 

[dsmith2189]

China will prove to be a very dicey market for ICE's. As the government there can dictate policy, the odds are very high that owing to environmental concerns it will strongly regulate ICE's, probably through increasing tax penalties. Tesla will be in better and better position with each passing year.

Don't forget that if Tesla exported to China they would have to give up their inteliectual rights to the Chinese government. that's why chevy balked on sales of the volt there.

 

[Cattledog]

Don't forget that if Tesla exported to China they would have to give up their inteliectual rights to the Chinese government. that's why chevy balked on sales of the volt there.

Good Point. Other car makers have made it, but their technology isn't as unique. But they are opening a store...

 

[Zzzz...]

Don't forget that if Tesla exported to China they would have to give up their inteliectual rights to the Chinese government. that's why chevy balked on sales of the volt there.

Really balked? GM and SAIC agreed to co-develop future electric vehicles...

General Motors agreed in Shanghai today to develop an electric vehicle platform with longtime Chinese partner SAIC. It effectively moves GM's future electric vehicle development to China.

GM deal moves electric car development to China -- a 'shakedown'?



And GM not only agreed to codevelopment, they already developed Sail Springo EV in China.

General Motors Co (GM.N) rolled out its first China-developed electric car at the Guangzhou autoshow

http://www.reuters.com/article/2012/11/22/us-china-gm-idUSBRE8AL09L20121122