Well, I have to say I've been asking the same question(s) and "worrying" about the same thing. But, as far as S-curves of adoption go, you can't assume that the consumer and market is the same as it was in 2023. Tesla put another 1.8 MILLION advertisements on wheels on the road in 2023. Many of those owners probably have positive word-of-mouth opinions to share. I have to believe that the consumer is evolving and with Ford and GM reducing their supply, hopefully that's an opportunity to sell cars to the increasing numbers of BEV buyers. I think Tesla is very nimble and am anxious to see what they have in mind to combat the model 3 subsidy issue.
Well, there's a few different issues at work here both on supply side and demand side...
On the supply side, where does Tesla get batteries (and factory capacity) for 700,000 more cars in 2024? Troy actually hit on this exact thing overnight-
Austin run rate is 160k/yr, this could go as high as 500k but there's no batteries to do that. They HAVE to be US 2170s or 4680s because otherwise you end up making a non-IRA subsidy Model Y nobody will buy because you're still making lots of subsidy ones too. Those batteries simply do not exist (2170s are all accounted for, AFAIK GF Nevada has no major expansion in progress for more, and 4680s are all going to the CT ramp). So there's no practical way to significantly ramp US production at all right now with the IRA overhang requiring US cells and no place to get them.
Berlin current run rate is 200k/yr, they can go to 250k with the current shifts, they could go 375k with a third-500k with a 4th, but have suggested current staffing costs make the extra shifts cost prohibitive. But even if we pretend night labor is the same cost (which it's not) that only gets you 300k more supply--- enough to go from 1.8M this year to 2.1M next year (plus whatever bits you get from CT and Shanghai efficency improvements). More realistically you get between 50k and 175k if they add one of the two shifts they don't currently run at best- so between that and the bits of CT and Shanghai you get your 2-2.1M and no more on production.
So to get to 2.5M you're pretty heavily short on supply unless you magically find US made cells for at least an extra ~350,000 cars AND solve the Berlin labor cost issue.
On the demand side I don't get folks who think 3 sales will somehow go UP significantly when Tesla lost the credits on most of the 3s they sell in the US. And some seem to think they've got some trick to fix that, but can't seem to even offer a theory on what it COULD be under the law. There simply are no more qualifying cells to put into those cars today. The obvious "plan" was they'd be the 2170s that are instead going into Ys, which were supposed to be getting 4680s that haven't ramped fast enough to do so. One thing I suppose they could do is start making the 3 in Berlin and shift those chinese 2170s over there and just stop selling the LR AWD 3 here as they did a while ago- but don't think the lines are set up to do this today and you're still at best offsetting lost sales from the IRA drop, not generating a ton of new ones.
As to the Y- see again Tesla HAS a bunch of under-used capacity at both Berlin and Austin where they could have made a ton more Ys (not 700k but hundreds of k) in 2023 if they thought there were a ton more buyers for them- but they did not. Plus days of supply did not move- in times when demand significantly exceeded production it went down. In Q1 2022 before the price spikes supply was down to -3- days, vs 17 now. Troy has data on this stuff as well based on backlog times and other data and again suggests the # of buyers at current prices isn't going to get anywhere near the ~40% larger in 2024 in current markets that a 2.5M target would require. Add in the headwinds of Tesla losing not just the 3 credits in the US, but also losing EV credits in Germany and elsewhere. Selling to new markets would be an option here, but what markets are left that'll turn up >half a million buyers? And again where do those half million cars come from, with what batteries?
2-2.1M is reasonably realistic based on what we know of Teslas scaling capacity at current factories, battery supply limits (esp. in the US for US cells), and the fact Highland will at least somewhat offset what'll have to be weird price adjustments on the 3 in the US (and maybe elsewhere EVs are losing subsidies this year too).
2.5M I just don't see how you get there on either side of the curve. If someone has a solid model for how they do (not just "tesla surely has a plan!' or "demand is infinite at any price and supply will just appear!") I'd absolutely love to see it.
