I think Elon has made a few tactical mistakes which will result in slow growth for the next couple of years, these are:
1. Going all in the 4680 battery production, when the risk was that if you can’t mass produce them quick enough it will add to the battery shortage.
It would have been better to increase capacity of the 2170s until you are certain the 4680s will be produced in sufficient numbers.
2. Not focussing on designing the smaller cheaper vehicle earlier.
Elon was all into the next generation auto vehicle and Franz had to convince him to produce the conventional vehicle by saying that the same design can be used for the robo taxi.
The facts are you have a limit of how many vehicles you can sell which cost a minimum of $40,000.
A smaller vehicle costing $25-30,000 can sell by the millions a year.
So by not focusing on this straight after the Y has been a major mistake.
3. Ramping up the semi earlier. I understand time was needed to put the semi through its paces but it could have gone faster by producing more for different customers to use and then gradually increasing the production, adapting to any problems reported by customers.
4. Not planning to produce other vehicles that sell in significant numbers such as a van.
5. Not doing targeted advertising. Once upon a time word of mouth was enough but now production exceeds supply. Plenty of people have no idea about how good EVs are, targeted advertising will increase sales but Elon has an ideological aversion to it.
As a result the next couple of years will be slow in terms of vehicle growth even allowing for the cybertruck sales.
I don’t expect full autonomy or the Bot to produce any meaningful revenue any time soon.
The only other aspect which is a positive is how quickly they can ramp up battery’s for storage as that is one area where demand exceeds supply.
The main factor impacting on the share price will be the slow growth rate for selling vehicles overall.
Sure other factors will affect it such as interest rates, a potential recession, Elons antics etc but the fundamental problem is I don’t see a big jump in the number of vehicles sold for a few years.
I am a long term holder so I can wait but the last couple of years seem a wasted opportunity in terms of long term planning.
It comes down to the fact that the board is weak. I mean how difficult is it to say to Elon you have a habit of achieving impossible things but they often take many years past your estimates so it makes sense to plan and make vehicles like a “normal” vehicle manufacturer until we are certain we can achieve what we want to do ?
That the best strategy is to systematically produce vehicles in different categories?
It is always nice to postulate strategies that could have had better results if only one assumes all things to be equal. They are never quite that. For each alleged error, there are other examples of huge successes such as Gigapress deployment and increasing production efficiencies.
- it is illogical to issue a cheaper smaller vehicle class until the technologies to do so cheaply enough a mature;
- from your Semi case to busses, commercial vehicles and other variants each consumes engineering and distribution resources that are also needed for improving production efficiency.
- As for your assertion that Tesla is too little known and therefore have passed growth limits without paid promotion you might consider that Tesla distribution now still does not include all of California, less so US-wide and has zero in numerous countries. Staying with the present business model gives major pricing flexibility, and still supports rapid expansion of Tesla’s major selling advantage, Superchargers.
By no means do I think they are perfect. They are, however, the most efficient automaker on earth. Further they have the highest selling individual vehicle on earth, even though they are distributed in fewer than half the countries as the former leader, Toyota Corolla, and have only a couple of versions, versus more than twenty variants of the Corolla.
Please think of that, while considering Model Y is generally about 75% or so more expensive than those Corolla variants.
The Tesla strategic errors have been glaring in hindsight, especially slow 4680 development. So, they find workarounds.
Please think of the bright side as well as considering deficiencies. Then think of liquidity and Free Cash Flow. Next consider all those OEMs whose product diversity includes all those variants you mention. Finally, check their liquidity and Free Cash Flow. Hint: every one of them has poorer fundamental economic results than has Tesla.
NET: Please don’t beg for decreasing efficiency. You might get it!
