One interesting thing to discover is what Tesla's brand loyalty is/will be compared to other car manufacturers. Right now the numbers are small, but imagine if they are still the solo, or dominant, EV producer in 10 years. They'll have a high 90%+ recapture rate when people are trading in old S, X, and 3 cars - much higher than BMW or Porsche or Mercedes, who are competing against each other and Lexus, Infiniti, Acura, etc. This is essentially because 90%+ of all people who drive electric cars swear they will NEVER go back to an ICE. I'd be in that camp. This gives them a much, much higher probability of capturing any market share they target (up to a point) than if they were simply a new start-up car company with cool products. Buckle up.Thanks, chickesevil! 700k would be awesome. I've got to crank the max growth rate up to 67% to hit 721k! You can imagine how chaotic the planning process must be. They've got to coordinate everything around an ambitious schedule like that, build in lots of contingencies and hope that 5000 little peices all show up on time.
The cool thing about models like this one is it can set a lot of little targets to coordinate activity around. Basically it's a flight plan. Once you have a trajectory like this, you can back into things like building out Gigafactories and auto facories at just the right time. You can negotiate with suppliers and hire staff at the right time. You can work out cash flow and back into any needed financing. I think Tesla is focused on self-financing through free cash flow. That's the rocket juice right there. When the market figures out that they've got enough juice to go all the way, the stock price will go way up. My thought is the way analysts should approach Tesla is to model cash flow well enough that they can see multiple self-financing paths to Tesla's objectives. It's not good enough to opinine that Tesla is going to need to raise lots of capital. They should know Tesla well enough to see how it is posible and trust that management sees that way and a couple smarter ways too.
So it's tough doing this work on the outside because you don't really know what anything costs. So my goal in modeling is plausibility. Can I see a path that is reasonable? If I worked for Tesla I could optimize it, but on the outside I must use a lot of imagination. At any rate, I worked out a cash flow model for the whole series of Gigafactories. One new Gigafactory per year gets Tesla to enough battery packs to energize half the cars sold in 2030. I'm not comfortable releasing this model, but I believe the have enough cash on hand and commitments for partners to pull off the whole damn thing. My next steps are to model the EV disruption in in the auto industry. This goes well beyond the spreadsheet I just shared to look at how quickly the industry can be disrupted and what kind of market share Tesla can walk away with. Basically that 10% market share is not something to be assumed, it is to be determined by how quickly Tesla disrupts. The faster they move the more share they can grab. So as I get a grip on how to model that, then I can back into how much Gigafactory they will need to do it. To recap, I've modeled Gigafactory cash flow to supply half the autos in 2030. That may be more batteries than are needed for major disruption. If I know the flight plan, I can work out the right amount of fuel. I guess you could say I'm trying to reverse engineer Tesla.