Sorry to disagree but I think unbridled optimism is as dangerous as the bears. 10 gigafactories and 30 million cars???? They are having challenges getting their two factories to 600,000 in production. After 5 years they are maybe at the 200,000 car rate. And yes you need a battery plant to supply the car factory. I am bullish on Tesla and own two of their cars but let’s be realistic. Even at a million cars per year they will be a force to reckon with.
People have talked about the S curve in production. That happens in most scale ups because scaling is not linear. The initial climb getting into production and then increasing volume to a decent point is very difficult. The logistical hurdles are many and some are pretty big. Once all those hurdles are cleared, it's free running to ramp up production until the point of diminishing returns or market saturation occurs. Then the curve flattens out but the limits restricting further growth are different than initial production.
The established auto makers passed the S a long time ago. To a large extent they are currently limited by market for their brand. Nobody sells more than around 10 million vehicles a year because that is about where demand tops out for even the most popular brands. Toyota could probably scale up their manufacturing to 11 or 12 million a year without a lot of trouble, but the demand isn't there to soak up the extra vehicles and dealers would have to sell them off at a loss.
The car business today is very competitive with lots of options for consumers to choose from. There are probably more than one disrupter coming down the road. The coming mainstream of electric vehicles is probably the most certain. Tesla is poised to be in the best position when that happens. They only make electric cars, they have the best support network for them, and they are the only company at the moment close to the capacity to make 1+ million cars a year. They aren't there yet, but it's a matter of evolution of their existing resources.
Other car companies are spinning up to have the capability to make something other than ICE in large numbers. All the major European brands are making some serious noises about it and some are actually taking steps to make it happen. In the case of Europe, the governments are pushing hard to this technology. Established car companies all have internal headwinds to fight. There are EV advocates in each company, but there are skeptics too and the skeptics win at least half the strategic arguments. This is why companies like BMW have gone back and forth between announcing a fleet of pure EVs and going with PHEVs instead. The skeptics know electrification is inevitable, but they are advocating for hybrids that maintain their company's investment in ICE.
The skeptics also have some merit to their short term arguments. The battery supply to make large numbers of BEVs isn't there and while capacity is expanding, it's going to take a lot of capital and several years to build enough factories to meet the needs of multiple companies all building long range BEVs. It's straight up logistics, which most top managers at established car companies know very well. Many of these managers have forgotten more about logistics of car production and delivery than Tesla has ever known.
The optimists believe BEVs will become the big new thing with consumers sooner, the skeptics later. Regardless of supply, when the tipping point with the public is reached, there will be huge demand for long range BEVs and a drop in demand for ICE. Julian Cox talked about that in his video. The supply is not the factor, it's demand. Right now demand for long range BEVs is relatively soft. Tesla has more demand for their cars than supply, but it's not vastly larger than their supply and demand for other BEVs is not very strong at all. GM has had to deeply discount Bolts to sell them. If the established car companies had the capability to mass produce the BEVs they have and flooded the market with them, they would end up sitting on dealer's lots for a long time before selling. Once consumers were enticed enough by discounts to buy the surplus, they might find they like BEV better and it might trigger a demand surge, but it would be a very expensive experiment on the part of car companies.
The pessimists point to poor sales of non-Tesla BEVs, lack of infrastructure outside of Tesla, and lack of battery supply for mass production, which are all real world factors. Based on enthusiasm on car lots for their BEVs, they believe consumers aren't interested in BEVs right now. The non-Tesla BEVs are mostly compromised designs, short range, and many are pretty ugly. Of course they aren't selling. Though I think most pessimists admit that BEVs will be a thing someday, they just predict demand from consumers catching on decades out rather than within the next few years.
Another disrupter that could be coming soon is autonomous driving and the demand economy. That is more murky in just how it will sort out. In the US, most households have 1 car or more, even when alternatives exist and even when there are added expenses and hassles. There are people in every major city who get around with public transport and don't own a car, but New York is the only major American city without near universal car ownership. I think it's still over 50%.
When countries become more affluent, car ownership jumps, even when public transport is well established. Even when cheap, self driving taxis are available, a large number of people might choose to own their own car anyway. That may change, millennials are less interested in owning a car than previous generations, but most end up getting a driver's license and a car at some point. People's opinions evolve over time.
On the other hand a demand economy for self driving taxis might take off. A lot of pundits think so, but I think they are underestimating how much people like having their own familiar space around them.
Even if private ownership remains a thing with self driving cars, there are probably going to be some families with multiple cars today who will scale back because a self driving car can meet more people's needs in a day.
Then there are the technical challenges to get to full autonomy. The tech is developing quickly, but there are still a lot of challenges and nobody can predict when those will be overcome. Compared to BEVs, the tech for a 200+ mile BEV is solved. The price might be a bit high and battery supplies are too low, but both of those have known solutions. There are technical problems with self driving tech that the designers figure can be solved, but they don't have the best solutions even mapped out yet. They need to gather more data before they can even map out the details on those steps in the process.
When there are unanswered technical challenges between you and your goal, it's difficult to predict when you will be done. As an example, I'm facing that with my own work right now. I ran into something that I've spent months on and haven't solved. I have no idea how much time it's going to take to overcome that challenge. I could go back to it tomorrow and solve it, or it may take me another 6 months, or it may turn out to be impossible. It's a big question mark in the schedule that makes everyone nervous.
Autonomous driving has a number of these dark areas where people have some idea what is necessary, but nobody has beaten the problem yet. And with all the news coverage of the failures, it's uncertain when the public will feel safe enough to trust the tech when it is perfected. Statistics show that flying commercial is the safest form of travel, but fear of flying is more widespread than any other form of travel. Despite 60 years of a pretty substantial safety record, flying still has a bad rep. If it wasn't substantially faster than other forms of travel, especially for long trips, a lot more people would opt for other forms of travel that are really more dangerous but don't
feel more dangerous.
Handing over your life to a machine with no human in the loop may ultimately prove to be safer than humans driving them, but the public may take generations to buy it. Or may never buy it.
But autonomous driving is still a potential disrupter that could change the car industry completely. When all new vehicles have autonomous capability, sales of vehicles may fall off a cliff as the public goes for car sharing taxis. Or sales may remain near current levels. Nobody knows for sure what that future holds.
As far as Tesla selling 30 million a year, unless there is a massive shrinking in suppliers and demand remains high, I doubt Tesla will have demand for that many vehicles. Just like Toyota, GM, and VW today. They all sell around 10 million, but they aren't making a lot more than that because their potential market among consumers is around 10 million. Tesla offers tech and features nobody else does, but by the time their prices are low enough and enough consumers know about what they are offering (a lot of the public don't even know Tesla only makes BEVs), the competition will likely have offerings with enough tech overlap that Tesla's advantage will be gone. It is possible the supercharger network will remain a major selling point if the rollout of CCS systems fails to materialize at the level necessary to compete head to head, or maintenance of CCS chargers remains bad, or if the number of cars is exceeding demand too often.
If Tesla does have some major advantage to consumers over the competition that the competition fails to answer, Tesla could end up selling 30 million a year, but I strongly doubt it. They will probably top out in the 5-10 million range. That would position them as one of the market leaders if not the leader, but they wouldn't be alone at the top.
