I think you’d agree that neither Chevy nor VW made any deep efforts towards developing a ground up EV platform in those early days. Nissan, maybe - but were Nissan Leaf’s unprofitable?
As for this:
A comparison of August to July - when the Shanghai plant was idled for part of July? When you said you weren’t concerned about things on a quarterly scale upthread, I didn’t think it was because you were more focused on the monthly movements. As the article points out, compared YoY their sales rose a little less than ten percent from where they were last year before the price cuts - which isn’t going to double their market share.
The article you cited shows both BYD and Wuling as being profitable. Li Auto is now profitable as well:
Those three have most of the top-selling BEV’s in China. The other groups with large sales (SAIC, GAC, Changan, and Geely-Volvo) all have substantial ICE sales.
The price and cost cuts are to match over time what the Chinese are doing. Currently, they are not at a disadvantage even as the gross margin dropped.
Longer-term Tesla risks reverting to just another GM, F, Toyota. For now, it is in Mercedes’s category of profitability. I am looking specifically at the margins.
Not sure where you were. I was playing with ARPAnet (professionally) in 1977, and I was a latecomer. It seemed all the interesting and important stuff had already been done by the old guys.
Uh, no. The iPod Touch was an iPhone without the phone function, and all the related hardware eliminated. The iPhone was sui generis, at least insofar as actual shipping product. Many things had to be invented to make it sufficiently functional.
If anything, the iPhone was descended from the concept of an iPad. But not really.
-IGU-
(I was there at Apple at the time (2006-07), working on iPhone software stuff)
For years you’ve been repeating this sort of nonsense. And yet, somehow, every year Tesla delivers 50% more vehicles, with positive operating margins. There’s room to sell lower priced vehicles because Tesla has relentlessly cut costs along with creating less expensive cars.
This chart pretty much speaks for itself.
Nobody else in the business has done anything like this. Your relentless naysaying is simply you being unable to see what’s right in front of you. And sure, I’ll give you Stein’s Law, but you predict that this growth cannot continue about as often as Elon predicts full self driving for sure this year.
Oh please. Commercial access to the internet didn’t begin until the 1990’s. Prior there were a few services offering shared computing time, messaging and email (such as it was) and so on, but anyone accessing ARPAnet in 1977 was a tiny tiny fraction of a minority.
Yes. I’m saying the form factor was solidified in the Touch, it was a mere (if giant) technological leap to turn it into a cell phone. Those already existed in much the same volumetrics, but I’m willing to stipulate that it was a leap to go full screen from the half-screen progenitors and touch keyboard from the physical keyboards prior.
That said, it was clearly iterative. The iPhone did not spring from a Motorola flip phone or even the Blackberry. Those may have demonstrated the consumer demand for cell connection (and other things, such as Palm Pilot or Blackberry offered), but the iPhone was presaged by the Touch (released earlier), a full screen with keyboard and the ability to save notes and provide other functions.
This is why I love having conversations about EV adoption - because it’s so fascinating what different perspectives people have.
For example, here’s Tesla’s actual delivery numbers for the last several years (projecting the end of 2023):
2019
367,656
2020
499,535
36%
2021
936,172
87%
2022
1,313,851
40%
2023
1,800,000
37%
And yet you’ve convinced yourself that Tesla “every year” delivers 50% more vehicles - something they’ve done exactly once over that time period, the year the Model Y really ramped up.
To be clear, I’ve never said that Tesla can’t keep growing. Just that they’re not going to keep growing at anywhere close to the rate that Musk projected. The marginal cost of growth rises the more you grow, the ultimate expression of which is the aphorism that “trees don’t grow to the sky.” In the early phases of growth - when you’re making fewer than a million cars - a well executing company can accomplish it with a handful of models and a small number of factories. But once you get into really large numbers, where Tesla is now, that’s not going to be possible any more.
We’re now at the point where that’s showing up in the numbers. This should be the last year where Tesla’s growth approaches 40%, helped only by the YoY comparison to last year’s reduced Q2 sales. Q3 will come in at about a third higher than Q3 '22, and Q4 a little lower than a third higher than Q4 '22 - and then what?
Will Tesla sell 2.7 million cars next year (50% more than 2023)? Is that something you really foresee happening, IGU?
I’m not IGU but while I don’t expect much of an increase in 2024 I suspect >50% year-to-year increases in 2025 and 2026 as gigafactory Mexico ramps up with its whole body casting of the $25K car. I suspect things are delayed a bit now as Tesla optimizes the Mexico gigafactory layout and the $25K model design for the new casting technology, which should substantially reduce production cost and time.
Given expectations that the Mexico gigafactory will be substantially larger than the current Shanghai plant, it’s going online should greatly increase production. By 2027 I wouldn’t be surprised if the average annual increase in Tesla deliveries was around 50%.
Well, if you cherrypick a starting year (let’s do pandemic and supply chain crises!), and then concentrate on chopping timeframes, you can convince yourself I’m wrong. But the reality is that they’ve delivered on average >50% per year more vehicles ever since they started producing the Model S in 2012.
Even if you start in 2019, as you did, 50% more per year compounded would be:
2019
367,656
?50%
2020
551,484
-9%
2021
827,226
+13%
2022
1,240,839
+6%
2023
1,861,258
??%
Of course your 1.8M for 2023 is not a real number as 2023 isn’t over yet. Seems very likely to me that they’ll deliver far more vehicles than that, but we’ll know when we know.
Yes, and yet they’ve consistently grown at exactly the rate Musk projected (e.g. 500,000 in 2020 predicted in 2015). You’ve been consistently wrong. Yet you always have lots of reasons why next year will be different.
I expect Tesla will grow at >50% this year, delivering more than 1,861,258 vehicles. And I expect they will grow at >50% next year. In years thereafter, I’m much less certain as to what the vehicle market will be, but I expect Tesla growth will be similar to now. It seems that the things you take into consideration just aren’t relevant.
Given that you’ve been wrong over and over and over, I don’t understand why you persist in making your bad predictions public. You don’t seem to be learning anything. Maybe it’s like Elon and FSD? Both of you, eventually, will be right about Tesla vehicles. Just not so far, and not soon.
Truly, the only issue that matters now is whether Tesla can get enough batteries to build all the cars they want to build.
Seems unlikely? Tesla hasn’t even pulled permits to start building Monterey. It would be pretty fast if they could even get the factory open in 2025, let alone building the million-plus cars that a 50% increase in production would require. And apparently suppliers are being told to aim for a 2026-2027 opening and ramp:
Again, growing by 50% in those years means adding more than a million additional cars’ worth of production capacity in a given year - basically opening a bigger-than-Shanghai factory every year in 2025 and 2026 and 2027.
You do realize you are arguing with a ‘cult’, right? I’m not sure there is any chance of changing their minds. But I certainly admire your stick-to-it-ness!
I think your math is wrong. Last year, Tesla delivered 1,313,851 vehicles. A 50% growth rate would have them deliver 1.97 million vehicles this year. That’s absolutely not going to happen. They might not even make 40% - which would be bad news for Musk’s 20 million cars by 2030 prediction. To get to 20 million, Tesla needs to grow by an average of more 40% per year from 2022 deliveries. If they’ve already fallen below that number, that goal will be hard to meet.
Hmmmm…could you point to one of my bad predictions? I think I’ve been pretty clear in saying that I don’t think Tesla will be able to meet Musk’s high long term growth predictions going forward. I’ve never claimed that Tesla didn’t have really outstanding YoY growth in 2017-2018, so that if you carry that forward in averaging a long term CAGR you can get a really big number. The launch and ramp of the Model 3 was amazing, driving Tesla to ~140% YoY growth; the same was true of the Model Y (~90% YoY growth). The same won’t be true of the Cybertruck - Tesla’s annual deliveries are just too big. And Model 2 won’t ramp until 2026 at the earliest - I kind of doubt the first Model 2’s will be delivered until 2026, which would put the ramp into 2027.
But I’ll make a few public predictions. Tesla will not post 50% YoY growth between 2022 and 2023. Or in 2024, or 2025, or 2026. They will not deliver 2,791,887 vehicles in 2024. Their delivery growth in Q3 will be less than a third (<33%) compared to the year-ago quarter. The same will be true in Q4.
They were able to post growth rates well over 50% in the past - when the absolute numbers of cars required to increase production by that much was far smaller. Those days are gone; going forward, to add 50% or more in a yearTesla will need to add a new factory or two’s worth of capacity in a single year. They’re not building factories at that rate, so they’re not going to see sales increases at that rate. At least, not any time before 2028.
Perhaps we have drunk the kool-aid. On the other hand, who would have thought a few years ago that the best selling vehicle of any kind would be a Tesla, or that the major car markets would essentially mandate the end of ICE sales by 2035.
Meanwhile, have you seen the debt being carried by the OEMs? Both Toyota and VW, as just two examples, have total debt in the $200B range. In contrast, Tesla has about $2B in debt and declining, with an operating cash flow twice that. In a world of rising interest rates, debt is not a great thing to have, particularly if you are competing with a company doing more R&D/per vehicle than any other (by a wide margin) and is already thought to be several years ahead in tech.
I mean seriously, the great majority of Tesla’s competitors cannot mass produce a profitable BEV, with the big western OEMs admitting they are at least two years away from doing so. Tesla is the only entity holding at bay a Chinese dominated automotive future.
Yup, Tesla fans are a cult, just like those who invested long-term in Amazon and Apple.
As an Apple Investor - we have been called cult members for years. I’ve been a shareholder since 1998 or so. The funniest part is that I don’t particularly care for their products. I only own an iPhone.
I suspect they are farther along than that. It is in Tesla’s interest to tamper down expectations for the $25K car in order to avoid an Osborne effect in 2024. The Monterey gigafactory is expected to bring in $15B to a region that could use the money. I doubt that permitting is a problem.
In any case, here is one description of how Tesla can reach 2.7M deliveries in 2024:
Fremont can likely expand production to about 700,000, primarily converting the Model 3 to use Gigacastings for the front and rear. This might be part of the Highland refresh or it might be on a different schedule, but it is important in order to increase the production of the Model 3 to meet the slightly increased demand expected because of the refresh.
Shanghai is currently at almost a million annual run rate, and I expect it to be able to produce 1.2 million cars next year with the production upgrades it has made and has planned for year.
Berlin’s ramp has been a bit disappointing, but I expect the factory can produce 400,000 Model Ys next year.
Austin’s ramp of the Model Y has likely been slowed by the slower-than-expected ramp of 4680 batteries, but I expect that to improve next year and Tesla to be able to increase Model Y production to 300,000 units and Cybertruck production to be around 100,000 units. How Tesla Can Continue 50% Growth & Sell 2.7 Million Vehicles In 2024 - CleanTechnica
Anybody wondering how it is that Tesla can relentlessly increase production and lower costs even in the absence of building new factories should watch this.
No, my math is fine. I showed what a 50% per year growth rate from 2019 would look like (ending with 1,861,258 vehicles delivered this year). You picked the starting year. Pretending that 50% growth per year means that when they have an outsize year then the next year must grow 50% off of that is a deliberate misreading of what I (or anybody else) has claimed.
When Tesla said that they would maintain a growth rate of 50% per year on average through 2030, their starting year was 2020. The fact that they had already been doing that for a decade was a strong indication that they had some idea of what they were talking about.
Wall Street plays the same BS game. We predict Tesla will deliver some ridiculous number of vehicles this quarter. Oh look, they didn’t! A miss! The only miss is that the prediction was wrong. Tesla’s just chugging along doing what it said it would do.
Incidentally, in case you missed it, Tesla said deliveries would be down slightly this quarter from last due to factories closing for retooling (you know, so they can make more vehicles cheaper and faster next quarter). The Texas gigafactory is just spooling back up after producing nothing for most of September. We’ll know this quarter’s production and delivery numbers on Monday or Tuesday.
Yes, but then you said you expected that “Tesla will grow at >50% this year,” emphasis mine. Since you said “this year,” I assumed that meant that you expected Tesla to grow by more than 50% this year. Not that Tesla would grow less than 50% this year, but still if you averaged in the growth of a couple of years back it would average out to 50%.
Again, what wrong predictions do you think I have made? I haven’t been predicting that Tesla will find a way to go back in time and not have amazing growth years with the ramping up of the Model 3 and the Model Y. I’ve been predicting that they won’t be able to keep up at the rate of growth going forward necessary for them to meet Tesla’s target of about 20 million units in 2030. To do that, it needs to grow a little more than 40% a year from 2022’s deliveries. Not reaching back in time - going forward, it needs to average 40% growth per year.
That’s not my number or Wall Street BS, BTW - it’s Tesla’s number. I don’t think they’ll get there - because super-high growth rates that are achievable from a low base get ridiculously difficult from a high base.
I don’t think they’ll do it, for the reasons I’ve outlined in our past discussions. They’ve waited too long to introduce a new model. The CT took them too long, and the Model 2 ramp isn’t going to happen until end of 2026 or 2027, and while there are some things that Tesla excels at, bringing new models to large-volume production in fewer than a few years from unveiling isn’t something they have a stellar recent track record in (CT, Semi, updated Roadster). And there’s only so much of the market that will buy any given specific car of a particular size, vehicle type, and brand, so the Model Y can’t carry them to 4 million units.
