Tesla Motors Club
Elon's pickup tweet storm yesterday reinforces how Tesla can use its battery and EV production advantage to disrupt the pickup market.
Unless something changes drastically in the next several years, Tesla will essentially have no meaningful EV competition for at least the first few years in this market, as it has enjoyed so far with the Model S, Model X and Model 3 and in all likelihood will with the Y and Semi.
The top 3 pickups sold worldwide are the F-Series, Silverado, and RAM, at 1.073M, 656K, and 614K units sold in 2017. Long-term Model 3 demand
Let's assume Tesla launches the pickup in 2021-2022 and has ramped up by 2023 to something on the order of 500K sold, which I believe is conservative. The average transaction price for large pickups is about $48K. Pickup Trucks Help Drive Average Transaction Price Strength for May 2018, According to Kelley Blue Book Because Tesla will target the high end of the market, offer AP/FSD and significant fuel savings over ICE, the ASP of the Tesla Truck will probably be higher, but let's use $48K as a conservative number.
$48K x 500K = $24B in revenue. Using a 3-4 P/S ratio as a back of the envelope valuation results in a very rough $72B-$96B valuation for the pickup business in 2023.
It could easily be higher depending on profitability assumptions or a higher P/S ratio to reflect Tesla's extraordinary growth rate, which the pickup (and SUVs based off it) will ensure continues after Model 3 and Y production have ramped up. There are also obvious opportunities to use the pickup platform to make truck-based SUVs to compete with the Escalade, Navigator, Suburban, Explorer, Cherokee, etc.
This also doesn't include any valuation for an FSD capable pickup/truck-based SUV fleet on the Tesla Network.
And perhaps most importantly, the pickup will be a big step forward for Tesla's mission of accelerating the transition to sustainable energy -- this segment of the ICE market is extremely energy inefficient with very high GHG emissions per mile.
Edit: updated with more recent ASP info.
Unless something changes drastically in the next several years, Tesla will essentially have no meaningful EV competition for at least the first few years in this market, as it has enjoyed so far with the Model S, Model X and Model 3 and in all likelihood will with the Y and Semi.
The top 3 pickups sold worldwide are the F-Series, Silverado, and RAM, at 1.073M, 656K, and 614K units sold in 2017. Long-term Model 3 demand
Let's assume Tesla launches the pickup in 2021-2022 and has ramped up by 2023 to something on the order of 500K sold, which I believe is conservative. The average transaction price for large pickups is about $48K. Pickup Trucks Help Drive Average Transaction Price Strength for May 2018, According to Kelley Blue Book Because Tesla will target the high end of the market, offer AP/FSD and significant fuel savings over ICE, the ASP of the Tesla Truck will probably be higher, but let's use $48K as a conservative number.
$48K x 500K = $24B in revenue. Using a 3-4 P/S ratio as a back of the envelope valuation results in a very rough $72B-$96B valuation for the pickup business in 2023.
It could easily be higher depending on profitability assumptions or a higher P/S ratio to reflect Tesla's extraordinary growth rate, which the pickup (and SUVs based off it) will ensure continues after Model 3 and Y production have ramped up. There are also obvious opportunities to use the pickup platform to make truck-based SUVs to compete with the Escalade, Navigator, Suburban, Explorer, Cherokee, etc.
This also doesn't include any valuation for an FSD capable pickup/truck-based SUV fleet on the Tesla Network.
And perhaps most importantly, the pickup will be a big step forward for Tesla's mission of accelerating the transition to sustainable energy -- this segment of the ICE market is extremely energy inefficient with very high GHG emissions per mile.
Edit: updated with more recent ASP info.