The autonomous future of Tesla and what that could mean in some wild scenarios

July 12, 2019 by Chanan Bos

---

Elon Musk has a little upset things on Twitter this week. Some fans worried about Tesla stop Selling cars at one point, but the central point was simply that the value of Tesla cars would increase a lot once Full Self Driving would be implemented. Elon made it clear that he simply meant that the price would increase significantly.

To be clear, consumers will still be able to buy a Tesla, but the compensation price will increase dramatically, as a fully autonomous car that can function as a robotaxi has several times more value than a non-autonomous car.

– Elon Musk (@elonmusk) July 8, 2019

In response, I was going to first tell that I felt that Tesla was giving this news to the community, because that would mean that a large part of the Tesla community, including myself, who did not the means to pay for the car, will never experience this experience. joy of a day to recover their own Tesla at the store / service center one day. Then I started to calculate the numbers and suddenly, the sadness was replaced by the excitement. If you too feel a bit depressed by this news, maybe it will cheer you up. It all started with Elon's answer to this tweet:

Exactly

– Elon Musk (@elonmusk) July 8, 2019

Elon's reaction to this tweet suggests that this action plan provides for complete autonomy before having enough production capacity to build as many cars as the world needs. This raises very important questions. How many cars could Tesla eventually manufacture? How many autonomous vehicles does the world need? This is for sure a rabbit hole deep enough to explore.

How many robots does the world ultimately need?

This is the most important question and it seems that no one in the media has asked this question, or just did not write about it, because they do not find an answer. We do not know the answer either, but we can present data and make badumptions.

By the time Tesla's autonomous vehicles are available, it looks like the world will reach 8 billion people. According to one calculation, there would have been 1.3 billion vehicles in 2016 and the number of pbadenger vehicles (with the exception of large trucks and buses) would be slightly less than one billion. We know that we will need less than a billion cars.

According to Statista, in 2018, nearly 79 million cars have been sold worldwide. So, basically, the whole market has turned into autonomous vehicles, we could replace all the previous cars in 11 years. One difference, however, is that Tesla autonomous vehicles can not be treated as normal vehicles – they will have several advantages. Let's go through them.

These Tesla robotaxis are supposed to have a "transmission of millions of kilometers". Even though it's overestimated, the average car never goes 200,000 kilometers – though, with extremely routine maintenance, some taxis reach up to 400,000 miles. In the worst case, Tesla doubles the upper limit or can quadruple the average.

Second, because autonomous robotaxy is shared by many people, in theory you need less than ordinary cars today. The question of how many autonomous cars will be needed also depends a lot on issues such as: rush hour; division of the property; first / last kilometers of public transport; and the availability, confidentiality, efficiency and punctuality of public transportation. Do we want there to be enough self-driving cars so that every person or family can access an autonomous vehicle during peak hours? For the moment, it is a question without answer.

Assuming that the US average of 832 vehicles per 1,000 inhabitants in 2016 becomes a global average for people seeking to commute to work at peak hours, this would mean a potential need for 6½ billion autonomous cars worldwide. . Not very realistic, but let's say that Tesla wants to build half of these cars in the next 10 years. That would mean a need for 325 million cars a year! If each Gigafactory was able to produce 500,000 cars a year, like Gigafactory 3, Tesla would need 650 factories worldwide, or each gigafactory would produce 3 million cars a year and have 100 factories. Clearly, this is not a reasonable number and Elon has already indicated it.

So let's try that from a different perspective, that of costs and capabilities, rather than from the perspective of maximum global demand. It's here that the last tweets of Elon come in. Suppose Tesla starts producing self-driving cars worth $ 50,000, Tesla Model Omega, and sells them $ 100,000 at 50% profit. So, use the 150 vehicles for the global average of 1,000 people in 2010 (not the US average). This figure is not perfect to use, but as in Elon's vision of the future, fewer people use cars and they hardly have them, it's as easy to guess as others . That would mean a need for 1.2 billion cars. Let's say that Tesla wants to make a little less than half, say 500 million cars.

If Tesla wanted to reach 500 million cars in 10 years, it would mean that it should build 50 million cars a year. That's a lot. It's a hell of a lot. But considering the number of cars manufactured each year, it is much more reasonable. Let's see what the numbers tell us. We must discover:

• How much money should Tesla raise to finance this?
• The speed with which he could raise the necessary funds.
• How many cars do they have to sell to achieve this goal?
• How long would it take to build all these self-financed Gigafactories to get there?

To build 50 million cars a year, Tesla would need 50 GF1-type factories that can build 1,000,000 cars or 100 GF3-type factories that can build 500,000 cars a year, each costing $ 5 billion. Well, that means that Tesla has to raise $ 500 billion less than the annual US military budget. This is the goal and the answer to the first question.

So, the news is that Autonomous Teslas will become much more expensive. To reach $ 500 billion, Tesla is expected to build and sell 10 million self-driving cars worth $ 100,000 with a profit margin of 50 percent. Now, all of a sudden, these numbers are starting to make a lot more sense – as you'll see in a moment if it's not yet obvious.

According to current trends and projects, Tesla is expected to be able to build 2 million cars by 2023 and, according to calculations, reach a total of about 17 million cars between 2023 and 2026. Let's say that in 2023, Tesla will start building the fully self-supporting Tesla Omega model for $ 100,000 and sell about $ 2 million. This would be enough for 20 GF3 plants. This means that Tesla would have enough money to start building 100 GF3 factories in just 4 to 5 years!

Now, as Elon has said, you would need 100 Gigafactories to make the world go round. It was in 2016 and it meant Gigafactories of type GF1, which means 200 gigafactories of type GF3. One of the biggest problems with GF1 is that, because of its size, Tesla is struggling to find enough staff and the plant is only about 30% complete. For this reason alone, it makes more sense to build smaller ones. Almost like when Elon had reduced the interplanetary transport system to the Big Falcon Rocket.

You may also remember that Elon mentioned the world 100 Gigafactories needed, but Tesla would not build as much. However, if Tesla is way ahead of autonomous vehicles and electric powertrains, a thought experiment based on about 200 GF3-type Tesla Gigafactories is not too wild for a Friday in July.

Tesla Factory Versions 1 to 3.2

Let's think first about the evolution of Tesla with the factories. We have version 1 of the Fremont factory, for the production of model S, then version 1.4 for model S and model X, then version 1.8 for model 3 and 1.82 for the addition of suspended structure GA4 , then version 1.99999 for model 3 and model. Y (if it will actually happen).

Gigafactory 1 (GF1) was version 2.4 for a short time, when it was announced that it would also manufacture vehicles, but the factory seems to have had problems expanding due to of a size too ambitious and lack of staff to hire. in the region, we now have the design version 3, Gigafactory 3 in Shanghai.

I guess Gigafactory 4 in Europe will also be a "version 3" since its announcement is about to be. The next step is what people probably do not expect yet, and I think it's Gigafactory 3.2. It is Gigafactory 3 which was set up with a layout a little better than that of the original plan GF3 & GF4. If the theory is right, then, around 2022, Tesla will announce the Tesla Omega model and, by the end of 2023, a full batch of new Gigafactories. Elon is probably willing to go as far as possible without embarking on another scenario of "bet for the company". (These are supposed to be gone a long time ago.)

Tesla is in a hurry not because of competition but because of the nature of Tesla's mission. It works against the clock. Some governments are striving to make the world carbon neutral by 2050, but in reality, the world will not be relatively safe if it is not carbon neutral by 2030.

The machine that builds the machine, built in batches

From what I learned from people who oversaw big factories, it's impossible to have multiple identical factories unless they're built at the same time. Whatever your needs for standard, identical equipment, companies and technologies evolve and you want to buy or create the newest and the most efficient possible (to the extent of its financial possibilities).

The same goes for Tesla, because we've seen how different the Fremont plant ranges are for S & X compared to General Assembly 3 for Model 3, and Tesla's leaders also spoke (especially at CleanTechnica) on improvements to Gigafactory 3 in China. As mentioned above, the only exception seems to be identical factories built at exactly the same time. So, in other words, to achieve economies of scale and efficiency, we need batch factories, as funny as it sounds. (It's about a different subject, but note that a few years ago, the idea of ​​launching mbad-produced satellite batches made us laugh, and we now have Starlink satellites sent in space at the rate of 60 at a time.)

Let's say now that the completion of this type of factories will take between 3 and 5 years, depending on the location of their construction – say 4 years for the average. This is something that has never really been done before and that has a chance of failing. Building batch plants is not really an integral part of university architecture and engineering courses, if you know what I mean. But let's see what the numbers look like.

By 2023, by selling 2 million "Omega" cars and investing 80% in new Gigafactories, Tesla could earn enough to fund the first batch of 12 Gigafactories. Once this first batch is put online, the speed will actually increase. Anyway, that means that in 2033, you have 200 factories producing 100 million cars a year, or one billion every 10 years.

Tesla Model Omega vs Tesla Model 3

If Tesla starts making this perfect autonomous vehicle without a steering wheel, the last model he will ever need (hence the Omega model name), in 2022 he could produce 2 million cars a year. This could generate funds for 50 gigafactories in just two years. Here is what a comparison between Model 3 and Omega looks like:

As you can see, even if Model 3 is profitable, without relying on the company, sticking to the 2019 system would take much longer to meet the needs of global consumers, and Tesla would not achieve its mission . Now, I'm not saying that Tesla will be able to settle in mbad in hundreds of factories easily by throwing money on the problem. There are other immense challenges, such as ensuring that the world can extract enough raw materials, make enough batteries, create a whole series of "batch building" jobs, and get a good workforce. formed. This is also why, in the above calculations, only 80% of revenues were allocated to new Gigafactories.

You can change this number so that it is even bigger if you feel bullish or halve it if you are bearish. You can increase the life of the project from a billion cars every 10 years to 2 billion every 20 years, the goal of Tesla is that its vehicles have a transmission of one million kilometers. There are many ways to play with numbers. There is a very important point: it is indeed logical that Tesla increases its prices significantly as soon as it loses its autonomy.

Conclusion

So, do not criticize the fact that we could not all own a Tesla. It's not a dark future. It's so brilliant that you can not even see it for the moment. Nevertheless, Elon, what is really happening once we have autonomous vehicles? Where is the company going? To the Omega model as discussed in this article? To Mars? Towards electric planes? Coping with climate change and preventing other climate disasters? At the moment, there are more questions than answers.

As this is a very complex subject and includes large and not very simple calculations, we have created a very easy-to-use spreadsheet in which you can play with numbers and see what kind of results you get. Here is the link.

Keywords: Tesla, Tesla autopilot, Tesla complete steering, 3 Tesla model, Tesla 3 model price