With regard to the 2020 production figure, note that Elon’s CC answer conflicts with the shareholder letter. Given Elon’s propensity to exaggerate, I’ll believe the letter. The WSJ reporter asked if 1M cars was still possible in 2020, and Elon said yes, and that Shanghai was the path to get there. Then Elon started backpedaling in his answer all the way back to 500K for 2020.
The shareholder letter said initial cars coming out of Shanghai will be in 3 years, that’s mid 2021. Initial cars, initial ramp.
So, I’d belive 500k cars, maybe, by 2020.
The bottom line is that to keep growing, Tesla needs to keep building factories. Both car assembly and battery cells.
A lot of things might be happening here, we just don’t know the answers. It may be that Elon made the decision to have a nice clean earnings report and not muddy the waters with talk of capital raises for future factories. A year from now when the share price is $500, he can credibly say the time is good to raise money for a European factory. Or Tesla’s credit might be good enough then to borrow the money for more factories. Thinking about it, secured loans for property and equipment shouldn’t be too expensive?
It is also possible that Tesla is running up against commodity pricing issues for dramatically increasing battery cell supply. Maybe they’ve identified supply, but it won’t come online for another couple of years. We just don’t know,
What I do know is that Tesla has a mission to continue to dominate the EV market, and have a lot of very interesting high sales volume future products (Semi, Model Y, pickup truck). I have little doubt they will grow as fast as they can, unconstrained by demand. How fast they can ramp is still unknown...
