Not sure if this has been posted. but I tend to agree with James:-
I fully expect Tesla Energy to be a major contributor one day, but let's wait for solid evidence.
Q4 earnings will also provide very interesting updates on margins, as will the inventor day on Gen3.
Good news is coming, but let's be patient and wait for it to arrive.
First of all, how can I take seriously a video of a dog cuddling with a stuffy?
Absolutely some of the assumption of that twitter account are over the top. The margins and current production rate are way overestimated. He misinterprets Elecktrek's "25 a day" as current rate, not capacity. We have no idea what the current rate is. Our best guess is to listen to what Tesla says, which is energy growth of > 100% YoY. So let's say 15-20 GWh in 2023.
Margin of 70%+ seem absurd I agree. But James quotes Tesla 18 months ago saying they want Energy to have similar margins to Automotive.
That's before the IRA bill came. IRA bill easily can move margins from an original target of 30% to 50% because of the massive credits purchasers gets.
Plus some are trying to build a bottoms up model of COGS. Do you think CATL LiFePo cells would cost more than $100 / kWh?
4000 kWh = $400k for the cells worst case. That's going to be the most expensive part by far. I don't do this sort of modeling, but my hunch is COGs are definitely under $1 million per pack. Tesla is selling them for 2 million. It is the
selling price (known) that is crazy, probably not assumptions about COGS.
So let's say more conservatively 50% margins on 15 GWh installed capacity in 2023. At 2 million per pack ASP, that's
~ 7.5 billion in revenue
~ 3.25 in profit
~ $1 in incremental EPS contribution.
That's a meaningful contribution, especially at a time when forecasters are modeling low EPS, EPS growth, and PE ratios to the stock.
It is important, because it will change the outlook from $5 EPS, 25% earnings growth, to $6 EPS, 50% earnings growth.
That will change a basic stock valuation from $125 ($5 * 25 PE ratio) to $300 ($6 * 50 PE ratio) within a year.
That's why understand Megapack value matters so much right now.