Elon Musk announced that Tesla intends to double US production in two years.
Tesla doesn’t break out its production numbers in a readily viewable manner, but it is estimated that Tesla builds about 700,000 vehicles in the US, and has a domestic production capacity of about 1.2 million.
In 2024 Tesla sold 1.8 million vehicles globally. So by 2026 Tesla should be selling at least 2.5 million vehicles based on increased US output alone. Assuming the same margins, this puts TSLA back into the realm of a growth/tech stock and its eye-watering P/E of 113 doesn’t sound too crazy.
This is also good economic news because in order to meet the goal Tesla would have to open at least one more domestic factory in the next two years.
This also assumes you believe what comes out of this guy’s mouth.
I remember the late 70s, when Chrysler had cars coming out it’s ears. They had the things stored all over the place, while they went crying to the government for a handout.
I offered two scenarios to solve their inventory problem:
1: the government buys up all the surplus cars, loads them onto old freighters, then scuttles the ships in mid-ocean.
2: the government imposes a tax on cars that escalates as the cars get older, so, by the time a car is 6 or 7 years old, the tax is more than the car is worth. The resulting abandonment of older cars creates demand for new cars, absorbing the surplus Chrysler inventory.
So, which plan would Musk use to get rid of all those Teslas?