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Published on September 9th, 2018 |
by Alex Voigt
September 9th, 2018 by Alex Voigt
What the past of Tesla tells us about its future.
A lot of people, including myself, are trying to predict the future of Tesla.
In the news, we're having a lot of money on the back burner. However, Tesla announced that it is expected to be positive and profitable cash flow in Q3 and Q4 2018, and even more interesting, for all future quarters. Let's discuss together these statements can be trusted.
The way I am approaching this issue of the past, the assumption of the future, and the fact that it has been predicted for the future.
It's a pretty easy method and some smart scientists may have invented a nice-sounding name for it somewhere.
To get started, I suggest that everybody spend a few minutes with Elon's interview from the Detroit Auto Show in January 2015, where he was interviewed and given profound insights about the predicted future of Tesla.
Before listening, though, please review with me some notes on what Tesla achieved in 2015 in order to evaluate the predictions of CEO Elon Musk compared to 3 years ago. Tesla has been and is on track.
In 2015, Tesla …
Produced 25.202 Model S,
Delivered 206 Model X in Q4,
HAD $ 5.29 billion in revenue (non-GAAP),
had 20.9% Automotive Gross Margin (non GAAP).
Listening to the interview, I selected a few quotes from the CEO that I found interesting:
Elon Musk: "By 2020, sure, 500,000 (cars), but I think we will probably continue to have (…)" (listen starting at 9:50, linked above)
Elon Musk: "I think we should be at least a few million cars in 10 years, per year (…) by 2025, we could get a few million cars per year" (listen starting at 10: 07)
I would say Tesla is well on track for that. In January 2016, with fewer than 26,000 vehicles produced in 2015, it may have been very unrealistic for most listeners. Today, more than 2½ years later, Tesla is about to produce 11 times that much in 2018, assuming production continues as planned in the last 4 months of the year. To grow to 2 million vehicles in 2025, Tesla has another 7 years to increase production.
In fact, if production growth continues in the past 2½ years, Tesla will have an output of 3 million electric vehicles in 2021. That's 4 years ahead of plan.
Although this still sounds like a lot for most people, Elon Musk in January 2016 for 2025 would still be achieved.
Elon Musk: "When will that be?"
Elon Musk: "When will that be? I guess when the Model 3 is in full production "Q:" Which is when? "
Elon Musk: "We feel pretty comfortable saying 2020 (…) I think when we're doing half a million cars a year, I think we should be profitable at that point or we're doing something wrong. (Chuckle) "
However, if you have experience in your first year, the impact on the following years is broad. That's just simple math. Given that Tesla overachieved in most areas until now, the likelihood that it will fulfill its 10 year plan is way higher than it was back in 2015.
Although some short-term predictions from Tesla that have been made in or after 2016, the long-term objectives have been far exceeded. Ask yourself, if Tesla delivers on the 10th year plan, will it be a failure for the company?
In the news, it is repeated daily that Tesla does not achieve its objectives and forecasts of the past. This has been proven to be wrong in the past, and in this instance.
For the future, we should consider that 2025. Furthermore, it seems advisable to believe Elon Musk's 2015 statement and its statements throughout 2018 that Tesla would grow into a profitable manufacturer. as Model 3 production ramps up fully.
The time when Tesla's future was uncertain.
Alex Voigt
Munich, Germany
Editor's note: I'll add one more note from this video. At 22:15, the interviewer said, "If you get big in the direct sales method – I mean, if you go to an Apple store and there's a hot product, there are lines that are out the door. If you get hot in the Tesla market, I do not think that consumers want lines out the door, correct? "After a few moments of consideration and other little comments, Elon said with a slight laugh," Yeah, I guess they don 't want lines out the door. "
That was a wild segment to watch now. As we all know, Tesla had humongous lines out the door when the Model 3 opened. The demand seemed to shock everyone. Following mind-blowing day – March 31, 2016 – Tesla ramped up its production targets for the Model 3. Apparently, Elon Musk did not want consumers to wait too long to get their cars. In response, he wishes at a new target. At the time, some of the forecasts seemed to be impossible. In retrospect, they were impossible. In other words, in order to satisfy the expectation of success While that did not fully work, the company has moved faster than Elon Musk's. Ignoring the roller-coaster noise in the middle, which should be made in Tesla based on 2015 reports quite happy.
About the Author
Alex Voigt Alex Voigt has been a supporter of the mission to transform the world into sustainable energy for 40 years. As an engineer, he is fascinated with the ability of humankind to develop a better future through the use of technology. With 30 years of experience in the stock market, he is invested in Tesla [TSLA], as well as some other tech companies, for the long term.
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