What Tesla Has Now and the Next Two Years

There are several important things that were mostly overlooked in what Elon Musk said yesterday at Battery Day.

Elon Musk stated that 2020 car deliveries will be 30-40% over 2019. Tesla had 367,500 cars delivered in 2019. This means Tesla would have between 477.7k-514.5k cars delivered in 2020. This means Elon is repeating that 300k to 337k cars will be delivered in the third and fourth quarters of 2020.

This means that auto revenue for the last half of the year will be $17B to $19B. This is $7-8B in Q3 and $10-11B in Q4. There is also another $2-3B in revenue in the last half of the year from non-auto revenue.

The third-quarter delivery numbers will be announced in about nine days.

Elon Musk also stated that the China Shanghai factory will be producing 1 million cars per year. It took 15 months to go from dirt to car production and another 4 months to get to a 150,000 car per year run rate. There are expansions ongoing at the Shanghai factory. This should mean a rate of 250,000 cars per year by the end of this year in Shanghai. 500000 cars per year by the end of 2021 and 1 million cars per year by the end of 2022.

This also means that Berlin and Texas have the room to expand to over 1 million cars per year each as well.

Tesla gets about 60 GWh of batteries from its suppliers in 2020. They will add 10 GWh/year of their own batteries from the pilot plant on Kato road. This is nearly one-third of the battery production on Nevada’s current production. Those are enough batteries for another 200,000 cars per year. The plan to produce 100 GWh/year in batteries in 2022 would mean that if they bought 80 GWh of batteries from suppliers then Tesla would triple its batteries by 2022. The plan out to 2030 is then 53% per year growth to reach 3000 GWh/year. The 3000 GWh per year was their conservative forecast. If Tesla reached 10,000 GWh per year in 2030 that would be 78% per year growth.

There are 600,000 Cybertruck reservations. The Texas factory should start producing 300,000 Cybertrucks per year in 2022.

Tesla Announced a Three Year Headstart on Killing Competitors

Tesla is already the leader in batteries and power trains.

Tesla is over $1 billion and three years into its battery and electric car transformation.

Tesla has already produced tens of thousands of the breakthrough 4680 battery cells. They are refining the yield of the batteries.

Tesla can get 20-30% of the cost and range advantage by getting the 4680 battery cell, battery cell to vehicle integration and some of the factory improvements. Even if the chemistry and the anode and cathode changes could not be fully realized in three years, the form factors of the cells and cells into cars can be realized in two years.

Tesla has already gone through four iterations on the dry cell battery production. This is similar to the SpaceX Starship. SpaceX has made short hops and will be flying to 12 miles in height within a few weeks and should get to orbit in 2021.

Tesla will make their own cathodes, anodes, battery cells and mostly go from raw materials to finished products.

Most other companies have pouch batteries, which are not compatible with what Tesla is doing in batteries.

Other carmakers will need to put billions in each factory or build new factories to copy the single body casting of the cars to integrate the batteries with the car. Companies that cannot spend at least $2 billion per factory will be at a 20-40% disadvantage in range, weight and cost. Tesla has $14 billion in cash and is making all new factories and expanding existing factories. All of Tesla’s factories will be going toward upgraded and groundbreaking batteries and cars.

Volkswagen and Toyota are the only companies with cash and scale to attempt the factory redesigns. Volkswagen and Toyota are both over three years behind. Tesla has been working and developing the next generation for the last three years.

$1 Trillion per year in Auto Revenue

The two videos below both explain how 3000 GWh/year of batteries translates to $1 trillion per year in auto revenue without full self-driving. This would be double the revenue of Walmart, triple the annual revenue of Amazon and nearly four times Apple’s annual revenue.

SOURCES- Tesla, Brian’s analysis, Meet Kevin, Tesla Daily
Written By Brian Wang, Nextbigfuture.com (Brian owns shares of Tesla)

13 thoughts on “What Tesla Has Now and the Next Two Years”

  1. Because they literally can extract all the lithium they will need for the next 30 years from the same place, which is at their doorstep. This way they can get lithium for a much lower price and are not dependent on others. It's also a good way to get into the mining industry, developing the initial infrastructure and logistics from a low risk high profit investment.

  2. I suppose it is because they need a lot more lithium than nickel and because it is easier to find a lithium deposit to mine.

  3. On the one hand I love how they plan to integrate the battery pack into the structure of the vehicle. But on the other hand I have two questions/caveats…

    Won't it be risky if the card punctures the battery pack from below by pressing against a sharp stone?

    And why do the use three parts: a cast front part, the battery middle part and the cast rear part? Why not just cast the whole thing in one piece but glue the batteries into the middle "belly" of the cast? And make the metal in the middle section very thin so that the structural rigidity comes from the shear loading of the batteries in the "belly" of the car body?

  4. Why does Tesla go into lithium mining, when it is not a scarce metal? But nickel is, and there Tesla just asks the suppliers to "mine more"..?

  5. What is the cost of setting up battery production right now, before Teslas -70% capex starts to work? I've not heard a single actual number.

    Also, they mentioned over 50% reduction in price per kWh (at the pack level). From what price, though? Never heard that number…

  6. This is a common issue with production facilities that scale up well.

    I'm not sure why battery factories do scale well?

    It's clear when we are dealing with matters of heat. Heat losses occur at the exterior surfaces. Surface areas scale with the square of dimensions, volume (ie. industrial throughput) scales with the cube. So your hot process things get cheaper and cheaper as they get bigger: Blast furnaces, coal power stations, gas turbines, many large chemical reactors, oil refineries etc.

  7. The cost of a battery gigafactory is getting so high that it's honestly starting to seem similar to the costs of standing up a new semiconductor fab conceptually. As in, only the really big boys can even hope to invest at the scales necessary to make back their investments.

    I wonder at what point the costs get so high that it becomes a national/strategic asset that needs government direct support to be sustainable? (similar to the joke of the the next big future bomber being so expensive you can only make one and it will be forever a hangar queen since you can't afford to lose it)

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