Tesla and Elon Musk have accomplished a lot over the past ten years since June 2010 when they became a public company. This will review key aspects of what was done and how 8 months of continued execution will make Tesla a $1 trillion technology giant like Apple, Amazon, Microsoft and Google.
In 2005, Tesla contracted with Lotus Group to make gliders, which are cars without the drivetrain. Those were used for the first Tesla Roadsters.
On June 29, 2010, Tesla Motors had an initial public offering where 13,300,000 shares of common stock were issued to the public at a price of US$17.00 per share. The IPO raised US$226 million for the company. In early 2013, Tesla had problems producing the Model S, and was running out of money. Improved production and a sales push gave Tesla its first profitable quarter, and an $11 billion deal with Google was abandoned.
The Model 3 was unveiled in March 2016. There were production problems through 2017 that were overcome in the first quarter of 2018.
Tesla production and sales over 8 years is showing 50%+ growth in car sales
22,000 cars in 2013
31,500 cars in 2014
40,000 cars in 2015
76,000 cars in 2016
103,000 cars in 2017
244,000 cars in 2018
357,000 cars in 2019
e 510,000 cars in 2020 (despite COVID-19 shutdowns that reduced by 70,000)
Auto margin (money made on the car business) grew from 15% in 2018 to 26% in 2020.
Tesla has the capacity at its car factories to produce 690,000-790,000 cars per year. Fremont has shown it is capable of producing 110,000 cars each quarter when it is not impacted by COVID-19. The China factory has ramped up production and will be able to produce 40,000-50,000 cars in the third quarter and 50,000 + cars in the fourth quarter.
Producing and selling at the capacity that exists will show quarterly results in earnings that will overcome denial in the valuation of Tesla.
If 140,000 cars are built and delivered in the third quarter, then the additional 50,000 cars will add about $2.5 billion in auto revenue compared to the first and second quarters. The 26% auto margin will mean $620 million should be added to net income. The earnings should be at or near $1 billion for the quarter. This will mean the Q3 delivery number will be announced Oct 1 and the earnings will be announced late in October.
If Tesla completes expansions at Shanghai and Fremont then 190,000 cars are built and delivered in the third quarter, which would be another $2.5 billion in revenue. Tesla will also release a major full self-driving update. It will be in limited release in 6-10 weeks but should be widely distributed in Q4. Tesla has already sold the Full Self Driving option to 25% of its buyers. A major software update should allow Tesla to recognize 25% of the revenue they were already paid. 50% was recognized when they originally collected the payments. Increased production and full self-driving revenue recognition should put Tesla at $2 billion for the fourth quarter.
Tesla already has more value than Walmart. Tesla with annualized net income of $8 billion would be about to thirds of the annual net income of Amazon. Amazon is valued at $1.65 billion.
Tesla is on track to having the Berlin and Texas factory completed and producing cars early in 2021. There will be a continued expansion in Shanghai.
Billionaire Ron Baron was an early Tesla investor and has access to Elon Musk. Ron said that the cost of the factory car capacity in Shanghai was $4000 per car per year. This means a 200,000 car per year Shanghai factory costs $800 million. A 500,000 car per year Shanghai factory costs $2 billion. $2 billion per quarter means Tesla can start building a new 500,000 car per year factory every quarter.
Tesla already has over $8 billion in cash.
Tesla being added the SP500 could involve issuing more stock. If Tesla sold $20 billion in stock, then Tesla could start 10 more factories with that cash. Tesla is building the Shanghai and Berlin factories up to 150,000 cars per year phase 1 in less than a year.
Through 2021 and 2022 and onwards there will be a constant stream of new factories announced and new factories completed and ramped.
New car models will be released or announced. Cybertruck will get released as will the SEMI. There will be new minivans, vans and buses based on the Cybertruck. There will be Model 2 in the $20,000 range.
Expected Key Events
Aug 31. Stock splits 5:1
Sept SP500 inclusion announcement and implementation
Sept 22 Battery day
Oct 1 Q3 sales and delivery announcement
Oct 25 Estimated Q3 earnings report
October New Full Self Driving limited release
Jan 2 Q4 sales and delivery announcement
Jan 31 Estimated Q4 earnings report
SOURCES – Tesla, Barchart
Written By Brian Wang, Nextbigfuture.com (Brian owns shares of Tesla)
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
Known for identifying cutting edge technologies, he is currently a Co-Founder of a startup and fundraiser for high potential early-stage companies. He is the Head of Research for Allocations for deep technology investments and an Angel Investor at Space Angels.
A frequent speaker at corporations, he has been a TEDx speaker, a Singularity University speaker and guest at numerous interviews for radio and podcasts. He is open to public speaking and advising engagements.
28 thoughts on “Tesla Will Overcome Denial in the Next 8 Months and Become a $1 Trillion Tech Giant”
Don’t you mean 1.65 TRILLION… 😉 Amazon probably makes 1.65B in a few days…
Processing in space could include making it into a giant, sponge (metal foam) ball. This would greatly reduce eventual impact buy upping the amount of drag with lowering density of the object you drop. It may not even need to be a ball shape but a giant air foil with some rudimentary guidance.
The point is the softer the landing the better while accounting for the cost of mining vs some added shaping while in orbit.
That reminds me I should consider filing some novel patents related to asteroid mining. Does US patent law hold in space? Meh so much stuff to do.
That being said interest rates are low, money is sloshing around the market like crazy and TSLA just needs to beat the interest rates to keep growing and bull market psychology is a hellava-drug.
Put another way: we are in the midst of a pandemic recession but markets are UP and home prices are at all time highs. Makes you think. Hard to bet against this market not because the market is awesome but because it is propped up for the time being.
Wait till they need to quick charge a dozen semis.
Had a coworker who years ago wanted to buy two Leafs (when Leafs were a thing). Found out that it would fry his neighborhood’s circuit if he charged more than two at once.
How about we meet halfway and mine the asteroids that have impacted the moon?
Asteroids in the belt are a long time away. See what I did there? I transformed distance in to time. It takes time to get your equipment to the belt, it takes time to get the goods from the belt to Earth.
Tesla currently has a P/E of 1,050. To justify that they need to do three things:
Dominate the entire global auto market
Keep profit margins of 20%
Not be broken up as a monopoly
Pretty sure that you can’t do even one of those long term.
Where I live there are many EVs. Teslas of all shapes and sizes, E-Trons, Bolts, Taycans, i3, i8, etc. I remember when the Model 3 first came out and how quickly they permeated parking lots.
Model Y… not so much. Is it because most people bought the model 3? Is it pandemic related? Is it because it isn’t selling as well? I don’t know I just offer up my own observations.
Also the Model 3 looks better than the Y. For some reason the Y looks too bubbly for me- its cabin is raised too high and the proportions look wrong.
So, I am thinking of joining the 20 Billion in short. Just waiting… If ever there was a bubble this is it.
So mining is the digging (edit: and/or) the extracting. In that case, we just *collect* NEOs, not mine them, unless they are big and we dig into them.
Sure, being a major player in the automotive manufacturing industry is nothing to sneeze at.
You know what’s bigger? The global energy market, something Tesla is slowly positioning itself in. That’s their real megagrowth sector.
Well, no, if you brought in any significant mass of Nickel-Iron as a meteor strike, there would be “mining” involved: It would bury itself!
I think that once captured or controlled, bringing it on in would be little harder than delivering it to Space processor/mine. This capture step should be compared to the dig and move part of mining on Earth, where things like this are particularly hard. So the processing may start with a tie as to cost either way. There, seems clear that Space has all the advantages, if we were starting from scratch and had reasonable access. As I understand it, the big problem with Nickel is the *cheap* processing currently has dramatic enviro probs, but that may be a separate specific issue, and may not be true of asteroid material(?). “Mining in orbit, or bringing it down as a targeted meteor strike, to be mined on Earth?” There is a small equivocation there, which may lead to missing or adding a step when thinking about it. *Mining in orbit* includes mining and processing, but *to be mined on Earth* would be processing only, as the metal has been *mined*, if that is how the word is used. Anyway, there is no reason to not do some processing in Space (edit: some may be needed before deorbiting), where the initial steps are pretty simple, I am guessing, and energy intensive surely. Very much depends upon how Musk is or is not planetarian. Very, very much!
At this point, which would be cheaper? Mining in orbit, or bringing it down as a targeted meteor strike, to be mined on Earth? (That’s where we’re getting our Nickel, after all: Old meteors! Most of Earth’s original Nickel is down in the core.)
I suppose it depends on how expensive the liability insurance was.
I expect that depends on the neighborhood. In the poorer suburban neighborhoods, (Mine, for instance, is nice enough, but the infrastructure dates back to the 70’s.) even one might blow the lines. In newer, wealthier neighborhoods, everybody could probably quick charge a Tesla with a synchronized start, without the lights dimming.
When did this site become Next Big Tesla?
He needs Nickel from NEOs.
Are they installing them in suburban circuits? Or are they siting them in commercial and industrial areas where they can connect up to some beefy power?
I believe that most often the overall number tell the big pictures while special circumstances always come and go. And hey I did not say that there is a bubble and that Tesla will not reach a Trillion Dolar evaluation in Eight months. This are predictions that the best financial analysts are struggling with, I just brought out the certain circumstances that I see that will allow this to happen since everybody is already trying to match Tesla, some on the verge of doing it and the EV market as a whole is not smashing the ICE market all at once but slowly increasing its share until a better crop of batteries will pop up at least.
The new Tesla quick charge station can pull up to 20 KWs. Drop 5 of those on a suburban electric circuit and you are going to have real problems.
US sales may not see much growth until Q4. I think they will have to make more Model Y. Then that will add growth in the US. The 140K global growth will get answered Oct 1. The US growth will have some hints at the Q3 earnings but more at the Q4 earnings. Model Y and Cybertruck and then other models will show strong growth in the US.
Your belief is what most of the public believes. The belief is that this is a bubble. The belief is that Tesla did not grow from the last quarter of last year. There is seasonality.
Q1 2018 30,000; Q1 2019 63,000; Q1 2020 88, 400 (-10K cars from Shanghai shutdown, some COVID impacts on Fremont)
Q2 down 50,000 cars Fremont shutdown. would have been 130K vs 2019 Q2 of 95K. 50% growth over prior year quarters is still happening. But people will not start to believe until Q3 comes in over 140K and Q4 over 180k. Billions in net income and 50% annual growth story reconfirmed, and completion of Berlin answers factory construction mastery and Battery day tech roadmap
Yes this is what worries me. They will increase total sales based on China but US sales seem mostly flat.
Don’t blame the virus for stagnant sales:
Q3 2018: 83,500 cars
Q3 2019: 97,000 cars
Definitely up, definitely not exponential growth.
The only reason they have stagnated is the virus that has shut down most of the world for months at a time…
Let’s see how will they get to sell more cars after more than a year of stagnation, and I don’t mean building more factories… Their only hope in moving quickly presently is delivering on the promise of close to full autonomy in the coming months.
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