Musk Says Tesla Will Make Astonishing 500,000 Cars In Next 12 Months

Production to increase from 300,000 to 500,000

By the way of answering questions about the expected appreciating value of Tesla cars due to Full Self Driving capability, Elon Musk said that within the next 12 months, the company will produce more than 500,000 cars.

Of course, all of those cars will be hardware ready for fully autonomous driving and according to Tesla, soon the software update will be ready to unleash the capability. Because the update will be available only for cars with the FSD option, the price of those are expected to increase (as well as the option).

“Very much so. There are 2.5B cars & trucks on Earth. Even replacing 1% of that fleet would require making 25M vehicles per year. Tesla will make over 500k cars in next 12 months, but that’s a mere 2% of 25M or 0.02% of global vehicle fleet. Car industry slow -> demand >> supply.”

Let’s take a look at the production rate – Tesla’s 12-months rolling output was at the end of March 2019 at around 297,000, including over 206,000 Tesla Model 3. Sales during the period amounted to about 280,000.

To achieve 500,000 in 12 months, Tesla needs to produce and sell at least 125,000 cars per quarter. The automaker’s production record was 86,555 in Q4 2018. In Q1 2019 production was 77,100, including a record 29,950 Model 3.

The increase from almost 300,000 to 500,000+ requires growth of about 67% year-over-year. Assuming that the Model S/Model X will stay at around 100,000 per year, Model 3 production and sales need to double to 400,000 per year.

If Tesla does manage to produce and sell 500,000 per year, and additionally significantly increase the revenues because of the autonomous driving capability, profitability should reach high levels. The FSD option is sold for $5,000 per car and is expected to be priced higher in the near future.

Just 100,000 cars (20% of planned) with the $5,000 option for robot taxi alone would provide $500 million of revenue.

If the production growth and automation is achieved, Tesla also should not have any problems with staying in good shape (in the business perspective) until the Tesla Model Y launch to gain yet another engine of growth.

Noa DeNova@KnightmarArchon

 · Apr 13, 2019

Replying to @EvBite and 2 others

When FSD becomes reality, demand will outstrip supply, hence a rise in value for those who already own one.

Elon Musk

✔@elonmusk

Very much so. There are 2.5B cars & trucks on Earth. Even replacing 1% of that fleet would require making 25M vehicles per year. Tesla will make over 500k cars in next 12 months, but that’s a mere 2% of 25M or 0.02% of global vehicle fleet. Car industry slow -> demand >> supply.

762

3:28 PM - Apr 14, 2019

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Will Tesla Production in Q1 Shock the Market?

Tesla will report its first quarter 2019 production and delivery figures in the next few days. The Q1 sales report is an extremely anticipated one as it will tell us whether or not Tesla managed to increase production and if the company was able to generate enough demand for the cars it has built over the last three months.

Tesla is not the kind of company that we associate with a demand shortfall, as the company has always managed to create demand that far outstripped their production. Demand for Tesla Roadster 2008, Model S, Model X, and Model 3 have always remained on the higher side since the day they were launched.

But the first quarter of 2019 has the potential to break that trend — even as Tesla pulled a multitude of demand levers in order to sell as many cars as they possibly could in the United States in December 2018, as part of its effort to help customers take advantage of the federal tax credit.

Customers who took delivery of Tesla in the first quarter of 2019 were only eligible for a tax credit of $3,750, compared to $7,500 if delivery occurred in the fourth quarter of 2018.

The tax credit, coupled with Tesla’s diverse sales strategies, would’ve certainly pulled customers forward, coaxing them to order earlier than they were planning to.

Tesla dropped the price of its cars multiple times since the start of the year, dropped lower-end trims of Model S and Model X, and announced the launch of a $35,000 standard battery Model 3 to help boost demand for its vehicles in the United States.

It’s likely Tesla is hoping that European deliveries will help offset any softness in demand in the United States and allow the company to show a steady ramp-up of Model 3 production. But Wall Street, thus far, has not been too impressed.

According to research firm Visible Alpha, average analyst Model 3 production estimate for the first quarter is just 64,400 — slightly higher than the 61,394 Model 3s Tesla built during the fourth quarter of 2018.

That said, Bloomberg’s Model 3 tracker, which estimates Model 3 production, expects Tesla to deliver a huge surprise in the first quarter by building nearly 80,000 Model 3 units.

Tesla Production

It must also be noted here that Bloomberg’s Model 3 tracker nearly nailed its Model 3 production estimates in the last four quarters. It’s conceivable that the odds of the Bloomberg tracker missing Model 3 production estimates during the first quarter of 2019 remain extremely low.

As of March 31, 2019, the Bloomberg Model 3 tracker estimates Tesla Model 3 production in the first quarter to be at 79,705, which is a full 23% higher than average analyst estimates for the quarter.

Bloomberg’s Tesla Tracker

If we assume the average price of Tesla Model 3 to be $45,000, analyst estimates could miss revenue numbers by more than $650 million, depending on how many cars Tesla delivered in the quarter.

While the first quarter 2019 production stats give us some insight into Tesla’s ability to ramp, delivery figures will have a huge impact on Tesla’s quarterly revenues. Unless Tesla delivers vehicles to its customers it will not be able to book revenue.

Tesla has been delivering Model 3s to North American customers for the last 20 months, which will allow the company to book enough deliveries that should closely match demand in the region, but the same cannot be said for its European deliveries, which began in early February.

The higher the number of cars in transit to European customers, the lower Tesla’s quarterly revenue will be. Bloomberg’s high production estimate is great news for Tesla and its investors, but the real number to watch out for in its first quarter production and delivery report is the number of cars the company delivered in the quarter, and, how many ended up being in transit.

On an earnings call in January, Elon Musk told investors that he expects 2019 sales to increase by 50%. A great first quarter production and delivery report could go a long way to meet that goal.

If Tesla manages to get close to or slightly sail past its fourth-quarter figures, it could ease some of the pressure on its stock price, because it would mean Tesla has managed to successfully offset the impact of the reduction of the tax credit in the United States.

Do Tesla stores still matter? Twitter poll results

2018 Tesla Model S and 2018 Tesla Model X

Two weeks ago, Tesla announced it was closing all its stores and move all sales online, where the company does most of its business anyway. Last week, it said it would reopen most of them.

That led us to wonder whether Tesla stores are still relevant.

To gauge the answer among our own readers, our Twitter poll last week asked, "Do Tesla stores still matter?"

We rarely get an absolute majority in our Twitter poll results, but this week proved the exception, with 56 percent of our respondents overwhelmingly saying they do, for consumer education. Tesla is trying to sell, not just a car, but a whole new technology that comes with its own new ecosystem of support and features. And while customers can learn everything they need to know online, it's likely faster and more reliable to hear it from a Tesla rep while standing in front of, or even sitting in a car.

Green Car Reports@GreenCarReports

Do Tesla stores still matter?

8:21 AM - Mar 12, 2019

56%Yes, for EV education

20%No, everyone knows Tesla

17%Yay, long test-drives!

7%Stores? Not in my state.

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Add that to the 17 percent who said "Yay, for long test drives," and a total of 73 percent sounded off in favor of the need for Tesla stores, even in the 2019 internet age. Tesla is offering a seven-day money back guarantee to assuage any concerns buyers might have about not having an opportunity for a test drive. Even with stores reopened, we're told that test drives are being kept to a minimum.

In all, only 27 percent of respondents no longer think Tesla stores matter, 20 percent because the company has no problem with brand awareness. "Everyone knows Tesla," as our poll choice suggested.

The other 7 percent chose, "Stores, not in my state." States that don't allow Tesla to operate stores are something of a wildcard. Customers in those states have been buying cars online anyway, and it doesn't seem to have slowed many down, which may have given rise to the idea of closing stores in the first place, at least in part. Traditional auto-dealer trade groups have gotten laws passed in quite a few state legislatures to ban Tesla stores under state franchise laws.

As always, remember that our polls relate only to the group of our Twitter followers that answer them. They don't provide a scientific sample size and the group is self-selected, so they are not a reliable basis for business decisions—by Tesla or anyone else.

Could You Win a Tesla for the Holidays?

Global climate change is increasingly recognized as one of the most serious threats to our safety and wellbeing. The UN has warned of potentially irreversible damage to our biosphere and way of life if we do not take drastic action to move our economies away from fossil fuels. Accelerating this transition is Tesla’s mission, and a small non-profit based in Boston has a plan to make it happen in the United States.

Climate XChange has spent the past five years modeling, researching and advocating for a carbon pricing scheme in the state of Massachusetts. Carbon pricing is a proven and effective policy tool to decentivize fossil fuel consumption, improve the health of our communities, and mitigate climate change. In order to make this a reality, they need your help – and you might win something super exciting in return.

The organization is raffling off not one, but three brand new Teslas this New Year’s Day. You read that right: one ticket gets you three chances at winning the car of your dreams and helps a fantastic cause – so really, you win either way! Get your tickets here!

Tickets are capped, and they are going fast, because not only does Climate XChange pay for the car prizes, they are also covering the taxes – which is pretty amazing, too.

Since the raffle is taking place on New Year’s Day, tickets also make for a great gift this holiday season. You can give your loved ones a climate-conscious gift and a chance at winning big! This is perfect for both car enthusiasts, and environmentalists – and is also a great way to show your employees some appreciation during the holidays.

This is the third time that CXC is hosting a raffle, but this year is the best one yet! Here are some more details about the raffle:

• Incredible odds: 3 cars, and ticket sales limited to only 4,000 tickets
• The drawing will be held on New Year’s Day 2019: not a bad way to start the year, right?!
• Grand Prize winner can CHOOSE which Tesla for their winning: a Model X, Model S, or Model 3. Second and third prize winners will receive a Model 3 (see all legal and winnings details here).
• Winners of the raffle who do not wish to acquire a Tesla can instead opt for a cash prizes.

Giving is great, winning is better – you can do both by supporting the good work of this non-profit. There has been increasing attention on carbon pricing schemes at both the global and local level. Consider this a way to do your part in supporting action on climate change.

Enter to win a Tesla from Climate XChange here!

U.S. Tesla Sales In October 2018 Up By 861%

In October 2017, Tesla sold just 2,115 cars. This past October, over 20,000.

It’s not the last month of a quarter, so no one should expect sales of 30,000 electric cars like in September, but even in October Tesla is able to achieve a groundbreaking result of growth of 861% year-over-year.

Our estimates stand at over 20,000 Teslas delivered for the month, and each model noted growth.

• Model 3 – 17,750
  
• Model S – 1,350
• Model X – 1,225
• Total: 20,325 (up 861%)

Tesla sales results

Rolling 12-month sales continue to climb up and approaches 150,000.

In the first 10 months of 2018, Tesla delivered over 134,000 BEVs:

• Model 3 – 95,882
• Model S – 19,745
• Model X – 18,800
• Total: 134,427 (up 261%)

Cumulative sales of all three models is now approaching 300,000:

• Model S – 137,892
• Model 3 – 97,654
• Model X – 58,552
• Total: 294,098