If Y is to have volume production in 2020, it is easily determined it must be in a factory already constructed. I believe there is zero chance for 1mil Ys to be produced at Fremont, so either Sparks or some existing factory that Tesla will be acquiring. Can’t be a new factory yet to be built.
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Tesla is an Undervalued Growth Juggernaut
- Thread starter EinSV
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If Y is to have volume production in 2020, it is easily determined it must be in a factory already constructed. I believe there is zero chance for 1mil Ys to be produced at Fremont, so either Sparks or some existing factory that Tesla will be acquiring. Can’t be a new factory yet to be built.
Since Tesla built GA4 in a tent in no time at all I am a little wary of saying a new Model Y factory is already out of the question but the longer we go with no news of a new Model Y factory site the better the odds that the Model Y will be built in Sparks. I keep hearing reports of labor shortages in Sparks due to Gigafactory 1's rapid growth but I suppose they could make an extra effort to attract employees from other areas.
I agree there is basically zero chance Model Y will be built at the existing Fremont factory.
A European Gigafactory definitely still seems to be in the cards. Will be interesting to see how they decide to time construction of it given how much else is on their plate in the next couple years (China, Model Y, Semi, Pickup, etc.). I agree they will likely to be able to build it out of cash flow possibly combined with some local debt as appears to be the plan in China.
I think all we have to do is watch to see when the next few factories break ground. Tesla has been pretty efficient at spinning the factories up after they start construction, but a delay in land purchase is a delay in the date of production. When the Semi launches is essentially dependent on when the factory for it starts construction, IMHO.
IIRC it was about two years from purchase of Fremont (late 2010) to production of Model S (late 2012). Tesla could probably go a little bit faster now, though not too much. If they're buying the land next month, they could be producing Model Y late in 2020.
Or by "volume production in 2020", were you excluding "Nothing until late 2020, then volume production in November 2020"? In which case I agree... it won't be until late 2020.
Well, OK, if you're counting the purchase and rehabilitation of a disused factory as different from building a new factory, then fine, it is likely to be a disused, rehabilitated factory, like Fremont.
Yes, Fremont was essentially already built, not a new construction. I’d be curious to know what other Fremont-like facilities are out there today / right now that Tesla could use, if any. It is getting awfully late in the game for Model Ys in 2020 even with furnishing an existing facility.
The labor and housing shortage near Sparks is a big concern. But they’ve also been quite vocal in wanting to help alleviate housing issues at least.
My money is on Y being produced at Sparks I guess.
I think both the Y and the 3 will be produced at Fremont as well as both produced in China. Elon made comments about how inefficient it is to move parts and cars all over the world as well as commenting that the vehicles produced in China would be for that market.
They don't need 7-10k/ week model 3 for the US market. Makes more sense to have 3-4k/ week model 3 and 4-5k / week Model Y in both locations.
They don't need 7-10k/ week model 3 for the US market. Makes more sense to have 3-4k/ week model 3 and 4-5k / week Model Y in both locations.
Until a European Gigafactory is built they probably need 7-10k Model 3s/year from Fremont for NA and Europe. Elon mentioned on the last call that the premium sedan market is twice as big in Europe as in the U.S., and initiatives that favor EV sales are popping up like mushrooms in Europe. The latest ones include Madrid banning non-EVs on central city streets (with some exceptions, including for residents) and Austria permitting EVs to have significantly higher speed limits than ICE on certain highways (130 km/h v. 100 km/h). IMO, there is every reason to believe Model 3 sales in Europe will be at least as strong as in North America.
Madrid bans ICE cars in favour of EVs – starting next month
Electric vehicles will be allowed to drive at higher speed limits than gas cars, says Austrian government
Tesla has time to assess long-term demand for 3 and Y before breaking ground on the European GF. It wouldn't surprise me to see demand exceeding Elon's estimates and the European GF adding Model 3 production beyond Elon's estimated Model 3 production ranges for Fremont and the China GF. This was certainly the case with the Model S (originally slated for production of 20K/year) and Model X demand has also exceeded most people's expectations. Another alternative would be to keep production in NA and China at the lower end of the range initially, accelerate the build of the European GF and then over time adjust regional production to match local demand.
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They're all over Michigan, though I think Tesla probably won't go to Michigan. But they also exist in Indiana, Ohio, Ontario, Pennsylvania, and I even think there are some in New York and Illinois.
One of the fundamental disconnects on Tesla valuation is that analysts and many investors seem to have a hard time wrapping their heads around Tesla's consistently staggering rate of growth, and consistently underestimate it.
Case in point: Current consensus analyst estimates are for Tesla to generate $29.37B in revenue in 2019 (source: yahoo finance). TSLA Analyst Opinion | Analyst Estimates | Tesla, Inc. Stock - Yahoo Finance
Tesla was already close to that level in Q3 $6.8B/Q=$27B/year) and will likely exceed that pace in Q4, which will end tomorrow.
Imagine if analysts were projecting -- for no good reason -- that Amazon was suddenly going to stop growing. They would ridiculed. But with Tesla, analysts routinely make absurdly low growth forecasts like this even though it has been growing twice as fast as Amazon for many years, with no end in sight.
Case in point: Current consensus analyst estimates are for Tesla to generate $29.37B in revenue in 2019 (source: yahoo finance). TSLA Analyst Opinion | Analyst Estimates | Tesla, Inc. Stock - Yahoo Finance
Tesla was already close to that level in Q3 $6.8B/Q=$27B/year) and will likely exceed that pace in Q4, which will end tomorrow.
Imagine if analysts were projecting -- for no good reason -- that Amazon was suddenly going to stop growing. They would ridiculed. But with Tesla, analysts routinely make absurdly low growth forecasts like this even though it has been growing twice as fast as Amazon for many years, with no end in sight.
The announcements in the past week -- Tesla shifting to an online model, Supercharger v.3 coming online, introduction of $35K Model 3, price reductions for all models, Model Y reveal and Elon's statement that it will cost only about 10% more than Model 3 -- set the stage for more staggering growth over the next 3-5 years.
With the new pricing, Model 3 and Y will undercut pricing on comparable premium ICE sedans and SUVs on list price alone, even before taking into account incentives and lower fuel and maintenance costs. Even more significantly, the new pricing is competitive with sedans and CUVs from Toyota, Honda and the like but Tesla offers a far more superior product in terms of performance, efficiency and tech.
With the convenience of at home charging and speedy v.3 Supercharging for road trips, "fueling" will become easier for many Tesla customers than ICE. One of the main roadblocks to EV ownership -- range anxiety -- should diminish significantly.
Tesla has confirmed that capex for Model Y and GF3 will be 1/2 to 1/4 of the cost per vehicle as capex for Model 3 at Fremont. This will allow rapid expansion with relatively modest capex, as reflected by Tesla's estimates of $2.5B capex in 2019 and $2.5-$3B in 2020.
An online business model can be scaled quickly and with reduced capex because there will be fewer brick and mortar locations needed. Supercharger v.3 will also effectively reduce capex because a higher speed Supercharger can charge more cars, so fewer Superchargers are needed per car.
And then there's storage, the solar roof, FSD chip about to be released, pickup, less expensive car in 2-3 years, China GF, European GF, etc.
Tesla has massive technological advantages and its online business model is far less expensive than brick and mortar, allowing it to further undercut the competition. The growth juggernaut appears very well positioned to continue for the foreseeable future.
With the new pricing, Model 3 and Y will undercut pricing on comparable premium ICE sedans and SUVs on list price alone, even before taking into account incentives and lower fuel and maintenance costs. Even more significantly, the new pricing is competitive with sedans and CUVs from Toyota, Honda and the like but Tesla offers a far more superior product in terms of performance, efficiency and tech.
With the convenience of at home charging and speedy v.3 Supercharging for road trips, "fueling" will become easier for many Tesla customers than ICE. One of the main roadblocks to EV ownership -- range anxiety -- should diminish significantly.
Tesla has confirmed that capex for Model Y and GF3 will be 1/2 to 1/4 of the cost per vehicle as capex for Model 3 at Fremont. This will allow rapid expansion with relatively modest capex, as reflected by Tesla's estimates of $2.5B capex in 2019 and $2.5-$3B in 2020.
An online business model can be scaled quickly and with reduced capex because there will be fewer brick and mortar locations needed. Supercharger v.3 will also effectively reduce capex because a higher speed Supercharger can charge more cars, so fewer Superchargers are needed per car.
And then there's storage, the solar roof, FSD chip about to be released, pickup, less expensive car in 2-3 years, China GF, European GF, etc.
Tesla has massive technological advantages and its online business model is far less expensive than brick and mortar, allowing it to further undercut the competition. The growth juggernaut appears very well positioned to continue for the foreseeable future.
I agree wholeheartedly with your analysis. The current market negativity is IMHO a temporary lull led by people who (somewhat rightfully) are peeved they paid more than the next guy for their Tesla. I myself did that but after 3 Teslas you get used to paying more and having the price drop and features get better. I think the latest changes are Tesla making offensive moves which will make it very hard for competitors to get entrenched. Competition will raise awareness of EVs and people will check out their prices and features and conclude that they should get a Tesla as Tesla has more features, better range, and will be cheaper than comparable products. As well Teslas will actually be available as production ramps up. So I'm in your camp and think we will see a massive growth and corresponding stock price and short squeeze at some point. Also there is the random dark horse of an acquisition or going private bid that could propel short term stock price growth. *NOT INVESTMENT ADVICE AND YOU NEED TO MAKE YOUR OWN ANALYSIS AND CONCLUSIONS*
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