Tesla's incredible growth, past and future – how could the company continue with hyper-growth



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Cars

Published on March 24, 2019 |
Paul Fosse

March 24, 2019 jo Paul Fosse



As I discovered in my biography, I own some Tesla stocks in one of my investment funds. I own stocks because I believe that the company is promising speculation, with high risks and a great potential prize. I'm not trying to draw stock prices, but I could come to this conclusion based on my stocks and my voluminous comments on the company. Do not follow this investment advice.

From the chart above, you can see that in the last ten years Tesla has achieved incredible revenue growth from around $ 15 million in annual revenue in 2008 to more than $ 21 billion in the recently completed calendar year 2018. t This 107% growth rate it's not rare for small start-ups, but fast growth is getting tougher as the company is growing. So far, Tesla has maintained very high growth rates of 74% over the past three years, only slightly more than 100%. That's why I thought that in this article I would speculate on how Tesla could grow for a number of years at high rates until it achieves its mission to accelerate the transition to sustainable energy. This mission includes cars, trucks, warehouses and solar energy. I will not discuss semi-trailers, storage or solar energy, although they are interesting. At a high level in order to grow Tesla, it needs to build more cars that people want at a price that allows the company to make a profit.

People want to build construction cars

There are two works to build the people who want to. Designing a car and building it. Of course, both works are related, as you make decisions in design (cough, door of the hawk wing, cough can make it very difficult to build a car. In the Y model, Elon mentioned that the construction of a car-building factory is 100 times more difficult than building a car.

The publication of the Y model helped me to realize that the strategy of Tesla has now moved. Instead of trying to prove to the world that we can bring the world's best car in the world, which was more or less its goal for Model S, Model X and Model 3, the goal of Y is more. modest. Their goal is to show how they can turn to the largest part of the global vehicle market (segments of small and medium-sized crosses and SUVs) with some changes in the revolutionary model of the model 3. t Hopefully, this means that Tesla can reuse most of the hard work to build a Model 3 factory to build the Model Y line.

It is possible and even probable that model 3 and model Y could be built on the same production line. If Tesla can use existing batteries, engines, electronics and interior to build the next two vehicles, a pickup and model of $ 25,000, Tesla can escape the production hell that it has transmitted for the ramp of the S, X and 3 ramps. 15,000 dollars of electric cars, but depending on how fast the passage to electric vehicles goes, we may not have to build a lot. If Teslas can take millions of miles, many cars with 500,000 kilometers will be available to meet the demand for lower prices. Some will prefer to have a lower quality of a new car for $ 15,000, and I am convinced that hundreds of Chinese and other emerging market producers will meet this need.

Another problem that Tesla needs to solve (or after-sales service industry) is that it will build so many models that 100 car copies of the same car will be available in the local shopping mall. This is not a serious problem in finding your car, as the app will guide you to your car, but people do not want to drive a car that is so common. I will not be dealing with how this will be solved, except to say that this is a good problem. This is a problem that is traditionally solved by traditional producers. As a result, many cars look different and are not truly different.

So Tesla stated that the design of the desired car is simple, but the construction is difficult, but has prepared a plan to avoid the creation of new factories by reusing what the company learned in building the production lines of the model 3. t You still have to pay for new factories and how do you do it?

Financing new Gigafactories

Tesla generated approximately $ 4 billion of cash flows annually from its existing operations (in the last two quarters and doubling, I will explain below – the Tesla cycle – why it will have less seasonal fluctuations from other companies).

When he learned from previous factory structures, Tesla thinks that he can reduce the cost of building future gigas with around $ 4 billion annually to about $ 2 billion a year (I think the note from the 4Q call may be from the factory fracture. or another article). This means that they can share their cash flow to finance approximately one gigafactory per year and spend another $ 2 billion to reinforce existing factories and design new vehicles and production systems. They do not allow them to pay their debts, but companies that are growing rapidly are excited that they should not go to capital markets to finance growth.

So, what kind of vehicles and quantities do I see in the Tesla building?

Production / sales of vehicles

Sales estimates my explanation of Elon Musk's comments on the ARK podcast.

As you can see from the above and below tables, Tesla is planning to become the world's leading vehicle manufacturer with only four large models.

Capture from the OICA report: http://www.oica.net/wp-content/uploads/World-Ranking-of-Manufacturers.pdf

Related: Which electric vehicles could reach 500,000 sales a year?

Considering how many other manufacturers' sales fall when customers around the world find out that electric cars are better and then they are not ready to buy another gas or diesel car, Tesla can be the world's largest manufacturer for around 2025. When this momentous moment occurs, if other manufacturers produce good cars that meet the needs of their customers, they will not be able to provide enough batteries to quickly convert production to EV when customers change.

How does Tesla Match offer for demand?

One of Tesla's competitive advantages is the relative ease with which he can sell his vehicles to various markets. Most cars need to be transformed to meet local safety and emissions standards. Tesla vehicles do not have any emissions and are designed to be much safer than all regional standards, so they need to update their loading ports, as this varies according to the market.

So how does Tesla use his international models to match supply and demand?

  1. Tesla announces a unique vehicle that has a value that goes beyond what is available today in the world. This creates a long waiting list for the product and causes people to keep their existing vehicles a little longer than usual and await the Tesla.
  2. Tesla is sending a new vehicle or model in the US and Canada, as it ramps production and lowers production costs.
  3. Tesla is sending a new vehicle or model to left-leaning markets in Europe and China during a break in demand that appears in the US after it was on the waiting list.
  4. Tesla is sending a new vehicle or model to markets on the right side during a break in demand that appears in Europe and China after meeting the growing demand.

Then it starts again at the top with a new model (currently Model 35,000 $ Model 3) or new vehicles (Model Y, Pickup or Model 2). When demand softens in one market, they begin to send to the next market. Short Cries:The problem of demand, "However, Tesla continues to increase production and sales to existing markets and is expanding to new markets. Each year they need a new vehicle design to start the cycle. Given the slow-moving competition, this is not difficult.

What about competition?

Of course, Tesla will have to continue to cope with various events that will increase and reduce demand. Countries will add and drop purchasing subsidies and other incentives for EVs. In certain cities, they will prohibit the use of gas and diesel, which will increase demand before the dates when they enter into force. The competition will introduce cars that will compete with Tesla. 5 areas where the competition will be difficult to compete are:

  1. Battery charge and charges. Tesla, as the largest battery-maker (not the cell), has a significant economies of scale in the world and has established a reliable supply chain.
  2. Efficient EV models that reduce the size of the battery required for an acceptable area. As we can see, many companies can make a large EV, but making it is as effective as Tesla is very demanding. Hyundai / Kia excited me exclusively from the point of view of efficiency (except Tesla).
  3. Using the charger, charging speed and reliability. Elon may not call him a ditch, but everyone else thinks he is. If Tesla opens it to other manufacturers, it only provides more funding to expand an already large network for charging.
  4. Perfect self-drive. Every Tesla car, manufactured since October 2016, is equipped to be completely autonomous. Other companies will have excellent driving characteristics in selected models and offered in new cars, but only Tesla set a standard sensor set and decided to equip every car a few years ago.
  5. Security. Tesla is obsessed with security that goes beyond the requirements of any government organization. It's no coincidence that the top 3 cars ever tested by NSTSA are all Tesla vehicles.

Conclusion

It sounds easy, but in the next six years there is nothing easier for a 10-fold increase in production. Yes, Tesla did it 3 times, but this time it will be harder because the competition is no longer sleeping. Some companies had their Kodak Moment, where they realized that they could or would not be able to switch to new technology fast enough to survive. Other companies are "zombies" or dead dead. They are still not aware that organizations that can not build vehicles that customers want and do not have enough time or resources to switch. Once they find this, they are likely to lay off half of their employees and sell the remaining residues to companies that have successful models that customers want. But some major automakers also jump into the EV transition and strive for it.

P.S. I heard that Tesla sells all of his demo cars for the end of the quarter. Sometimes they give big discounts for models with a few kilometers. Hurry if you want one of these deals. To use my Teslo reference link to get 1000 miles of free Tesla charging on the S, X or Model 3, here's the code: https://ts.la/paul92237 (but as if you previously said that you another owner helped, use their link instead of mine.


Marks: Tesla, model Tesla 2, model Tesla 3, model Tesla S, model Tesla X, model Tesla Y, pickup vehicles Tesla


About the author

Paul Fosse I have been a software engineer for more than 30 years, first working on EDI software and lately developing data warehouse systems in the telecommunications and healthcare industry. On the way, I also had the opportunity to help set up a software consulting firm and manage a portfolio for multiple investment funds. In 2010, I was interested in electric cars because the gas became more expensive. In 2015, I began to read CleanTechnica and was interested in solar energy, mainly because it is a threat to my investments in oil and gas into my investment funds. Tesla investor. Tesla Reference Code: https://ts.la/paul92237



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