Prediction Thread - "You Called It"

[GeorgeSymonds]

I would be too. And Elon too. After all it is only 3 years in the past. They can make it

I know you meant to say 2025, and I agree. Growing to 1M in 7 years is phenomenal.

Well spotted! I did mean 2025!

M3 production means this year we may hit a run rate of 300k a year, but we wont get that many actually built in a year until 2019

Teslas car park is currently a little over 300k, and it took 6 years to build the infrastructure to support, and its not coping well in places. By the end of next year we’ll need 2x to 2.5x the service centre (and super charger capacity if it’s to be an advantage) capacity because there will be 700k+ cars on the road, and that’s just on current production volumes. By the end of 2020 there will be 1m - 1.2m cars out there, we’ll need 4x the current infrastructure- in 30 months. These things require big investment and long timescales. Unless Tesla does a deal with an existing auto maker or franchised operators to switch capacity from traditional car makers, I cant see it happening, but that would require a move away from the Tesla owned service centre network, something musk is against. So even supporting the M3 production is a challenge before any further scaling.

 

[ValueAnalyst]

If someone makes a wild prediction, expect some push back. But there is a difference between vigorously debating an idea and personally attacking the person making it. As someone who has tossed out a few unpopular ideas in my time, I've been on the receiving end of both.

I don't know if it was in this thread or another one I laid out why I think predicting any car maker could ever make more than about 10 million cars a year is highly unlikely. Worldwide EV production may reach around 10 million a year by 2025 if everyone talking about mass producing batteries gets serious about doing it, but not all those cars will be made by Tesla. It would take a mobilization effort akin to the mobilization of major powers in WW II to get battery production up to a level that could support 50 million cars a year by 2025.

In any case extraordinary claims require extraordinary proof. If you can make a goo case for how Tesla could manage to overcome the numerous logistical hurdles to get to 50 million cars a year, I'll listen, but so far all I've seen is just an assertion which I can't see happening from what I know about logistics.

“I don't know if it was in this thread or another one I laid out why I think predicting any car maker could ever make more than about 10 million cars a year is highly unlikely.”

Would you mind finding the link for this? Thank you in advance.

 

[J X 3]

OK let's see if i can come up with some predictions that are unlikely to miss.

1. They'll target 6.5-7k M3 per week exiting Q3
2. S&X get a significant upgrade likely around first half 2019, at the very least to use new cells that can take better advantage of Supercharger V3 - ofc more upgrades would be best, interior, sustained perf, X face lift
3. Their own AP silicon in 2019
4. Roadster needs next gen cells for 200kWh pack.
5. At least $1500 per share in 2 years, unless Trump crashes the global economy.

 

[wdolson]

“I don't know if it was in this thread or another one I laid out why I think predicting any car maker could ever make more than about 10 million cars a year is highly unlikely.”

Would you mind finding the link for this? Thank you in advance.

I replied to you a couple of days ago. Maybe a moderator moved your message?
https://teslamotorsclub.com/tmc/threads/general-discussion-2018-investor-roundtable.105297/page-560

 

[electracity]

Really? There is a lot of world out there. If China locks them out, there's always India. South America. Tesla's got a lot of countries where it hasn't expanded much.

Certainly Tesla plans to expand market areas. But there are not many $35K+ cars sold in either India or South America. Tesla would need to be actively working on deals and permits for charging now in those areas if that is the plan in 2020.

What is completely unclear to me whether a typical EV interested car buyer who typically spends $25-30K on a new car will buy a model 3 soon. Many will undoubtedly do one more buying cycle with an ICE car. Will enough people buy to sustain 10,000+/month production? I think so, but I'm not certain. But If Tesla can get the model Y in production in 2020 then they can probably be supply constrained until the next recession.

My prediction from last year was 250,000 total Tesla sold this year, and 500,000 next year. So I guess I was predicting that Tesla will sell 30,000 M3 per month in 2019. But the assembly line in the tent suggests that Tesla can't produce an average of 30,000/month next year. I'm very unclear what 2019 production looks like.

 

[wdolson]

Certainly Tesla plans to expand market areas. But there are not many $35K+ cars sold in either India or South America. Tesla would need to be actively working on deals and permits for charging now in those areas if that is the plan in 2020.

What is completely unclear to me whether a typical EV interested car buyer who typically spends $25-30K on a new car will buy a model 3 soon. Many will undoubtedly do one more buying cycle with an ICE car. Will enough people buy to sustain 10,000+/month production? I think so, but I'm not certain. But If Tesla can get the model Y in production in 2020 then they can probably be supply constrained until the next recession.

My prediction from last year was 250,000 total Tesla sold this year, and 500,000 next year. So I guess I was predicting that Tesla will sell 30,000 M3 per month in 2019. But the assembly line in the tent suggests that Tesla can't produce an average of 30,000/month next year. I'm very unclear what 2019 production looks like.

I was looking at ICE in the $30-$40K range and bought a Model S. Bolts, Leafs, etc. attract EV oriented buyers. Teslas attract EV oriented buyers, but also attract ICE buyers. Most of those people cross shopping Tesla with ICE would never consider another brand of EV. As more and more people get a chance to test drive their friend or neighbor's Tesla, more people will consider them. I do agree they will be supply constrained for a while as long as the economy doesn't tank.

There will come a day when they aren't and their sales model may falter at that point. Building on demand works great when there is a constant backlog, but sucks when supply capacity exceeds demand. By the time that happens Tesla may be have some contracts with businesses to make extra vehicles for them on an "as capacity allows" basis. I could see them making a contract with a taxi-like company to make cars for them at a discount when gaps appear in the production schedule. There will also be a demand for commercial vehicles like pickups and delivery trucks. Some of those could be built on car chassis (like mail vehicles).

Here are my predictions:
1) July will be Tesla's best sales month in its history by a fairly good margin.
2) The record will stand for at least a year, probably longer.

 

[AudubonB]

I suggested the following yesterday in the “Market Action” thread; am placing it here because I’m more confident in the idea that it really is what has and will be occurring:

The specific timing does not perfectly jibe, but then, thinking about it, it shouldn’t. As in:

I am going to suggest that the impetus for Mr Musk’s “short burn of the century” comment of a week and a half ago was not based on his confidence in increased production rate or a deep-pocketed sugardaddy or anything else of that sort, but rather it was the discovery of Gigafactory saboteur Tripp, and Tesla management’s realization that one of the ramifications regarding fake news, short-selling shenanigans and the like could include the crumbling of the deplorable houses of cards they have been, once the legal process begins -

If this is so, I’m reasoning that the delayed timing between their discovery and their release of the announcement is that management, rather than rushing toward declaring their initial findings of sabotage at the outset, instead continued to gather data - including their...ah....discussions....with Sr Tripp - before making public anything other than the news that a short burn was on its way

 

[schonelucht]

If this is so, I’m reasoning that the delayed timing between their discovery and their release of the announcement is that management, rather than rushing toward declaring their initial findings of sabotage at the outset, instead continued to gather data - including their...ah....discussions....with Sr Tripp - before making public anything other than the news that a short burn was on its way

Yeah. No. Read the emails. Look at the timestamp. It was an impromptu back&forth instead of deliberately trying to gather more information. Otherwise we wouldn't have Elon mail that 'the Model 3 has caused injuries' only to have to mail one minute later that he meant 'no injuries'.

Short burn is about reaching 5k. It's simple. If you run 5k/week consistently you make profit. Even bearish analysts have their model that way (they just don't think Tesla will hit 5k) Once Tesla hits 5k, stock upgrades are inevitable.

 

[electracity]

Short burn is about reaching 5k. It's simple.

I don't know. 5K production may already be priced into the stock. Until Musk can demonstrate consistent high production and a consistently good income statement I think may investors will take a "wait and see". Q2 income statement is probably pretty bad, after all.

 

[J X 3]

I don't know. 5K production may already be priced into the stock. Until Musk can demonstrate consistent high production and a consistently good income statement I think may investors will take a "wait and see". Q2 income statement is probably pretty bad, after all.

It's interesting how everybody thinks that Tesla just stops at 5k. They are not gonna stop, they are gonna keep pushing every line as higher vols and higher margins are not something you delay.
Can they exit Q3 at 6.5-7k and Q4 at 8k?

 

[neroden]

It may be quite expensive to go from 5k to 10k. It does sound like Tesla will have to duplicate a lot of lines, rather than just making things run faster.

Still, at least they won't have to debug the lines. Duplicating working lines is easier. Given the way the supply chain works, I suspect they'll replicate battery lines at the Gigafactory first (usable for every product), then module lines (usable for many products), while retooling the "old" Model 3 GA lines to match the "new" Model 3 GA lines. Then they'll start working on a second body line and paint shop upgrades, if they have to.

 

[J X 3]

They don't seem to be working like that, they push every line as much as they can and add things here and there. They can't afford a lot of CAPEX to 10k either , cash or margins wise.
One note here, the cells should be Panasonic's issue, they pay for the machines. "According to the agreement, Tesla will prepare, provide and manage the land, buildings and utilities. Panasonic will manufacture and supply cylindrical lithium-ion cells and invest in the associated equipment, machinery, and other manufacturing tools based on their mutual approval. ""

 

[GeorgeSymonds]

You can’t just keep making a production line go faster and faster. He’s already said they’ve had to stop the line to make big changes so they can hit a weekly peak of 6k with the average below that. The MS and MX line is already at peak with stable output volume for over a year now.

 

[AZRI11]

Lyft and Tesla partnership. Not a merger. It would pay for next North American giga/car factory.

 

[J X 3]

Lyft and Tesla partnership. Not a merger. It would pay for next North American giga/car factory.

Why would they give up on the biggest opportunity they have? Car as a service is a market worth many trillions per year, supplying the hardware for that would be a fraction of what can be achieved.
These kind of moves are for folks that want to go under once the partner has the scale to make its own cars.
Lyft and Uber are far behind Tesla, they got some customers but those will bail out instantly once someone offers prices many times lower.
There is nothing to win from such partnerships and everything to lose.
Some non-thinking analysts will argue about data but you have far better data when you can track the customer's needs 24/7 like Tesla can.
Any partnership would mean that Tesla loses at least 90% of its potential.

The fact that Lyft's market cap is many times smaller than Tesla's and Lyft has no means to fund anything, is irrelevant.

 

[AZRI11]

Why would they give up on the biggest opportunity they have? Car as a service is a market worth many trillions per year, supplying the hardware for that would be a fraction of what can be achieved.
These kind of moves are for folks that want to go under once the partner has the scale to make its own cars.
Lyft and Uber are far behind Tesla, they got some customers but those will bail out instantly once someone offers prices many times lower.
There is nothing to win from such partnerships and everything to lose.
Some non-thinking analysts will argue about data but you have far better data when you can track the customer's needs 24/7 like Tesla can.
Any partnership would mean that Tesla loses at least 90% of its potential.

The fact that Lyft's market cap is many times smaller than Tesla's and Lyft has no means to fund anything, is irrelevant. Just an idea to get income now. No capex needed. Also, Elon recently said on Twitter that Lyft is great.

 

[JRP3]

Tesla is clearly so far away from true autonomy that partnering with lift or uber could make sense for many years.

 

[wdolson]

Tesla could end up absorbing their partner in such a deal. One wrinkle in this that few are acknowledging is while autonomous driving is coming, regulators may be very reluctant to allow fully autonomous vehicles without a human at the helm to take over if things go awry except possibly on very controlled roads (like the tunnel from O'Hare to downtown Chicago). That's how commercial airliners work. 99% of the time they fly themselves and the flight deck crew is there to program the flight computer. In that case regulators still require two pilots though there has been at least one accident caused because there were two pilots and one was an idiot when things went wrong.

The predictions that ride sharing companies are going to be the next big thing is dependent on regulators allowing cars on city streets with no human control. That may take a lot longer than people think.

 

[J X 3]

The only value Tesla could provide to lead to a partnership would be autonomy. And that would be suicidal for Tesla.
We also actually know that they don't want to allow their cars to join Uber or Lyft (see the terms for full autonomy) and ofc we know about Tesla Network.
Lyft or Uber do not have anything Tesla needs. And if they want to buy Tesla cars for their drivers, they can do that just like everybody else.

The rhetoric on autonomy becoming legal is generally true but not quite. Yes remains to be seen when it becomes legal in each major jurisdiction but it is already starting to - see Waymo planning to start their service later this year. Tesla is already late and so is everybody else, except Waymo. When it starts to become legal is now, how fast it spreads depends on how safe these early vehicles are and how determined the first players are.
Tesla can be a bit late if they start it with their customer's vehicles, as they can scale it very fast but they need to hurry up as only 3-5 global players will survive, everybody else goes under in the next decade. Biggest threats are Google and Apple, maybe Amazon.

Actually, here's an idea, a partnership with Amazon or Walmart for Tesla's autonomous cars to deliver packages outside of peak hours - to increase utilization, make an extra buck. lower costs per mile. That's gonna be a core business for car as a service providers, they could reach deals with big players early on and then expand to serve any tiny shop on this planet.

Tesla can get to a trillion dollars in yearly revenue in 10 years if they don't screw up, with room to grow. A couple of players will get there and Tesla needs to try to be one of them. The opportunity is in serving many hundreds of million of customers that pay a monthly subscription and round that up with deliveries. Everything else is spare change.

 

[Seesaw]

What is completely unclear to me whether a typical EV interested car buyer who typically spends $25-30K on a new car will buy a model 3 soon. Many will undoubtedly do one more buying cycle with an ICE car. Will enough people buy to sustain 10,000+/month production? I think so, but I'm not certain. But If Tesla can get the model Y in production in 2020 then they can probably be supply constrained until the next recession.

My prediction from last year was 250,000 total Tesla sold this year, and 500,000 next year. So I guess I was predicting that Tesla will sell 30,000 M3 per month in 2019. But the assembly line in the tent suggests that Tesla can't produce an average of 30,000/month next year. I'm very unclear what 2019 production looks like.

I think true mass volume will come with the Model Y. The Model 3 is not the type of vehicle to sustain big volumes long term. In the mass market sector, sedan sales are dying and also command lower prices - meaning a double whammy for profitability.

Sedans in the future will be where the coupe market is now with an emphasis on style, luxury, performance but not volume.

Tesla should put Roadster and Semi on the back burner and focus all efforts on Model Y.