Wednesday, October 27, 2021

Tesla Passes$1000 as EVs Hit Knee of S Curve Adoption

If you have not figured it out yet, the consumer is now switching over to the EV.  Remaining problems with EVs are small enough to put all gasoline systems behind the 8 ball.  Folks are now likely buying their last gasoline vehicle.

These numbers are huge and this means the entire automotive built infrastructure is now transutioning fast.  Certainly they anticipated it, but the order book has jumped ahead, as in way ahead.  The fact is that you can drive these machines without been blind sided.  After all, most of us travel the same routes daily.  It all becomes routine and we learn our cars limits.

Right now it is all about consumer transportation.  The rest can follow as needed.  The car has always been a necessary luxury and price has not been the dominant issue.  Tesla is tapping that sweet spot.

Tesla Passes$1000 as EVs Hit Knee of S Curve Adoption

October 25, 2021 by Brian Wang

Tesla has surged as high as $1038 today on the news of $4.2 billion deal with Hertz. Hertz is emerging from bankruptcy and will buy 100,000 Tesla Model 3 and Model Y over the next 14 months. Hertz is buying at full price. Normally fleet sales involve discounts but Tesla has a backorder of about 500,000 cars worldwide. The backorder is now 600,000 cars.

The Hertz deal is a robotaxi play. Hertz was trading at $13 billion. How much will 100,000 robotaxis be worth in 2023 or 2024? How much to Tesla and how much to Hertz?

Tesla is getting 150,000 to 250,000 new car orders every month for the past 3-4 months when they are only able to build 90,000 cars in a month.

Tesla is opening the Berlin and Austin factories at the perfect time as they need to ramp those new factories faster than the China factory. IF Tesla can make 3 million cars in 2022 they will be able to sell every one of them.

Tesla can also put some of its $16 billion in cash to do everything to expand the China and Fremont factories.

Tesla CFO said on the earnings call that Tesla was caught off-guard by the profound awakening in EV desirability.

15 European countries and China had over 10% market share for EVs in September, 2021. Norway is at 75% EV market share and it took the 6 years to go from 10% to 75%. About 30 million of the 87 million global cars are sold in Europe and China. Adding 10% per year in EV demand is another 3 million cars per year plus whatever happens in the US and the rest of the world.

A profound awakening is Tesla nearly doubling its car production from 2020s 500,000 cars to 900,000 to 950,000 cars in 2021 and actually having demand for 1.8 million cars in 2021. This assumes another excess of 100k in orders in November and December. Tesla has fallen behind a doubling of demand despite raising prices by $4k per car.

Tesla needs to take extraordinary measures to push to 2.5M-3M cars in 2022 and then get to 5-7 million cars in 2023. Tesla could go to $2000-4000 per share next year with an annual net income of $30-45 for the year.

Average new car selling prices have increased to about $45,000 in the US and used cars are at $30,000. There is a massive shortage of cars.

Who else is opening giant new EV factories this year instead of 2025?

SOURCES – Tesla, Greencar reports

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