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8 Years Ago I Published My Tesla Pricing Model For 2020 As $2,450 (Up 2,845% Since), Here's The Updated Version For 2021-2030

Apr. 07, 2021 6:00 PM ETTesla, Inc. (TSLA)AAPL808 Comments
Sal Demir profile picture
Sal Demir


  • Calculations for Tesla Geo Expansion, Deliveries, ASPs, Revenues, COGS, and Income.
  • Apple 2020 as a benchmark to help understand Tesla the Behemoth in 2030.
  • Some thoughts on Financial Analysts and the "Next Tesla"

financial charts, stock market
Photo by lucadp/iStock via Getty Images
I'm going to keep this article short and sweet as Tesla (NASDAQ:TSLA) has become one of the most discussed stocks at this point. There's just way too much information out there (mostly irrelevant) with everybody talking about the new sexiest stock. But I

This article was written by

Sal Demir profile picture
I am an independent investor, focusing on high growth potential. I perform fundamental, market and risk analyses. I early retired from Corporate world thanks to my investments and now only manage my own portfolio;Long: Tsla, Sofi, XRP, Impossible Foods, Figma, Bird(*** 100% of the proceedings of all my articles are donated to Education Nonprofits Firstbook.org, Roomtoread.org and Khanacademy.org***)

Analyst’s Disclosure: I am/we are long TSLA, DOCU, CHWY, IMPF, SOFI, VIEW. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

I am Short: NKLA

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (808)

Nice to see some informed data on sa. It’s so clear and obvious when you look at the data that Tesla is moving up and many are trying to catch up (which I do hope happens). Ford has some hope but it’s a big industry and lots of growth ahead.
Another notable figure: looking on Bloomberg the consensus projected revenue for 2022 is $67.3B. Your projections indicate about a 40% beat on that. I hope you’re right!
Carpediem007 profile picture
@brentmoney13 Look at the consensus EV volume they are predicting they will produce in 2022. It is very far removed from the likely relaity imo.
@brentmoney13 Will you look at that - Now, in 2022, consensus analyst revenue projection is $86B. Analysts wrong again!
Great article! The final comment on financial ratios is certainly true! Most only look at the past! BTW, the next Tesla could be SpaceX!
Sal Demir profile picture
@JCCorn Exactly. And why people keep looking at past performance as a future indicator when we're living in the most transformational period in human civilization is so strange. Some of the current technology companies are doing things that *have never been done before*, not just Tesla.

(And this is coming from a history buff. I read more history content than anything else)
@Sal Demir
changing the drive train is not transformational. it was electric before.
@Sal Demir The BEV is well over 100 years old. It struggles and fails today for the same reasons that it struggled and failed over 100 years ago. Electrification of transportation is a given. Batteries in an electrical system, however, are the weak link today, just as they always have been.
Saying Tesla's TAM includes 1T for "insurance" and "energy" is laughable. Apple had a unique product, where is Tesla's monopoly in insurance or energy? Highly regulated insurance and very competitive energy where their storage systems are currently losing money every quarter. Sorry this is laughable.

Or is this one of the "Tesla's FSD will be so good that none of their driver will get into accidents so their insurance will be 100% profit!"? There's this thing called competition. It just doesn't work that way. Insurance companies get 10% or so on their capital, how much capital does Tesla have in insurance? NONE. But their "insurance" (really brokerage) is worth what, 100 billion or so? A trillion? Great analysis.

About their 4680, it's a nice idea, have they been able to mass produce it?
Sal Demir profile picture
@kenberthiaume since you don't seem to know; TAM definition;

Total addressable market (TAM), or total available market, is the total market demand for a product or service,[2] calculated in annual revenue or unit sales if 100% of the available market is achieved.

And what's "laughable" is you thinking "Energy" TAM is $1T. Estimates vary wildly but World Energy market is much larger than $1T, let alone $10T.

Re: 4680 mass production

Real world products take time to develop, unlike your childish comments you conjure without any analytical thinking and type away:)
An extremely well written article supported by well reasoned statistical information.
Excellent article. Thank you especially for breaking down the projections for their production capacity as new plants open, as well as the growth in other sectors such as energy where the dividends haven't really even begun to pay out. That is very helpful, as I'm sure it requires quite a bit of research to project those figures.

The 2030 valuation does seem a bit unrealistic to me. If I'm doing the math right, 2b shares valued at $15,000/share would mean Tesla would be worth about $30 trillion if that projection played out. Total U.S. GDP is projected to be around that same number in 2030, so that would mean that Tesla would be worth as much as the entire U.S. economy.

The sales projections aren't entirely unrealistic if things play out well for them across all of their multiple addressable markets. I think perhaps the disconnect would be using a P/E of 77 in 2030 once their growth will have slowed to the level of a much more mature company.

That said, I'm long TSLA and will be happy if it reaches even a fraction of the valuation you are projecting.
Sal Demir profile picture
@brentmoney13 Thank you. And I know, trust me, I was like "How is this even possible? Even if Tesla has a 30 P/E in 2030, it still sounds insane" (as Walmart has today. Mind you, Amazon P/E is currently at ~80)

(Relatively) Short answer;

Market Cap and GDP comparison is an apples to oranges one IMO. The most sensible comparison would be to compare Tesla's Revenues to US GDP. (Total value of country's products and services vs total value of Tesla's products and services)

Long Answer;

So for 2030 US GDP is estimated to be ~$32 Trillion and my estimate for Tesla Revenues are ~$1.8 Trillion. (About 5.6% of US GDP)

US GDP in 2020 was $20.93T
Walmart's 2020 Revenues were $560B (About 2.6% of US GDP)

Now the question is "If Tesla sells almost double the number of cars VW does today, *along with being market leader in Energy Deployment and Storage market, Autonomous Driving Rental and RideSharing, Licensing out Superchargers, SW, HW, Manufacturing, good chunk of Auto Insurance market....* does it make sense for it to be twice as large as Walmart's GDP share?"

If your answer is yes, then the next question is "Do you believe Tesla will reach ~26% Gross Margin across all its products?" (~26% GM is from my model)

If your answer is yes, then you're looking at way above unprecedented levels of Gross Profit (About 5 times Apple's Gross Profits)

And the logic goes on down the list...

But if you don't agree with Revenues as the best possible comparison but Market Cap is, then there's the >15X historical P/E ratios which balloon values incredibly. And I'm having a hard time coming up with a logical answer there. I hope that helps. Thanks again for the thoughtful comment.
SCH CAPITAL profile picture
@Sal Demir So, you're forecasting about 50% annual growth rate in $TSLA revenue for 10 consecutive years ($30B to $1.8T)?
Sal Demir profile picture
jim_schenck profile picture
Mr. Demir, GREAT article and some great counter points made by gametv. I think some other considerations include technology advancements (mostly in materials (glass, metal, tires) as well as in production techniques (casting, stamping, moldings, electrical/optical tree/branch controls)). I also think the Insurance portion has a lot more to offer as data is collected, repairs are made within a vertical model=profits made from savings, and autonomous driving decreases accidents while insurance premiums continued to be paid (especially since they are based on historical costs = expensive). Regardless of my comments, great article, well presented and thorough.
Sal Demir profile picture
@jim_schenck I sure hope you're right and I'm too conservative in materials, manufacturing and auto insurance margins. Thank you!
@Sal Demir
They are a sales broker for an insurance company. Their margins will change almost zero. Do you think your state farm agent makes more than state farm?

do you even realize that they aren't in the insurance business except as a reseller?
jim_schenck profile picture
@eugene_ Hello Eugene, you seem to know a lot about the agreements they made and the structure of the insurance offerings/coverage/commissions.
So lets follow your branch of statements: They are commissioned sales arm of (I think Liberty Ins.)... so they make money, they sell more cars and they probably sell more insurance they make more money... they are not insuring the car (lets say Liberty is) then they have no liabilities. The car is in an accident... they make money providing parts. Seems good to me.

Lets say they are using another companies structure to get started in the insurance business... and that they will develop an even better structure once they can free up some time to do so... they can keep the premiums the same or slightly lower, have intimate knowledge of the types of accidents their cars are in, the cost of repair, etc. as recorded from their computer in the car. Tweak their antonymous software to mitigate if not avoid those accidents, tweak their manufacturing process to make repairs easier, set up their supply chain for automated delivery of parts based on the initial accident etc. All lowering cost to insure while premiums are being collected and take a while to lower due to the nature of the business. Tesla would now have sold the policy, collect the premiums, set up the repairs with Tesla original parts and have the fastest response time at the lowest cost... each step of the process making Tesla money.

One can't compare that process with todays insurance company. If I was Mr. Musk, I would outsource the liability portion of the insurance and keep the collision part.

In both scenarios Tesla is making money off the sale of insurance - I think the later will be the route Tesla takes.
gametv profile picture
In the near term years through 2022, I am in agreement with your projections, but there is a huge divergence in following years.

The problem with your theories is that you anticipate continued growth in existing models - M3 and MY - even after the M2 is introduced and there is alot more competition in the marketplace from other vendors. We already have an existing model for what happens to sales of higher priced Tesla cars when a lower priced version is introduced. The higher priced car sales tank. People trade down. You see, right now Tesla EVs are unique. They pull sales from many different segments - from entry level luxury sales, from high end luxury, but they also pull upward from the Camry and Prius group. Once you have M2 being sold and also other competition, the sales trajectory of M3 and MY start to fall and sales get spread across many different vehicles. That is the nature of the auto business.

And that is not even in an environment of competition from other manufacturers.

Keep an eye out for information on competition coming from China this week as new cars are introduced at the Shanghai Auto Show. Most investors just dont understand the deluge of competition that is arriving from Chinese companies - first in China and then in Europe. Massive competition from SAIC and BAIC and Geely, etc. Xpeng and Nio already make cars that are competitive on tech specs with Tesla. So Tesla does not have a lead in terms of tech and in the next 2 years they are literally swamped with competitors. I'm not really even counting on legacy makers to beat Tesla, it will be the Chinese companies that take on 60% market share of EVs in China and leave the remaining 40% for the legacy makers and Tesla, meaning Tesla is 10-15% of EV sales, which might equate to 1.5 million in china by 2030. That is a far cry from your model.
jim_schenck profile picture
@gametv Great points... but they don't dissuade me from the main points Mr. Demir makes. Purchase substitutions are inevitable MY and M3 to M2 but that I think the model differences will dampen that a bit. And product substitutions are very valid when the market demand is stable or stagnant. But when a market is growing at the expense of ICE cars, the effect is much less as the general public (not the current niche consumer) begin to adapt to electrification and a critical mass forms. If the market stays at 2% of car sales the point would be valid. As the market increases lets say to 17%+ the point becomes less valid especially as new types of viehcles are launched by one manufacture (truck, sports, semi etc.). But to your point, there are a lot of people who simply want something different and Tesla's style is limiting.

I just watched a Chinese person, actually two people, make comments about ev's made in China. Without bad mouthing the Chinese brands, they simply wanted the foreign EV's. Something like the Apple IOS vs all other cell phones. Still, I think your point is well made and valid. As the Chinese come to the US etc. they will take some market share... mostly from the ICE cars. The differentiation is important as those with a budget and "extra" cash for a Tesla will buy a Tesla and those that don't reach that level will look at ICE or less expensive foreign EV's. That is, if they exist.

Great points by both of you. Balancing the points as they effect the market is the key.
Your statement makes no sense the Tesla's sold in China are made in China.
Sal Demir profile picture
@gametv CC @jim_schenck

Model S and X deliveries did not "tank" but yes, they did decrease as Model 3 and Y ramped up. I'm somewhat of an example of this as I originally went in for a Model X but realized it was much more than I needed and instead got a Model Y. (Single guy and a dog, no need for a giant SUV:) )

With the new Model S and X refresh though, there's now enough distinction between the two classes. And I think (this is where you may disagree) that Model S and X will start a new growth phase as global awareness and adoption of Teslas and EVs improve across the globe.
Wow, you should work for ARK.
Sal Demir profile picture
@Watcher of the Fray I personally don't find ARK's theories useful as they lack in details. (I.e. they have annual delivery numbers but no explanation of what regions, factories, etc. those deliveries will come from)

Ps. ARK didn't start covering Tsla until 2014-2015 AFAI Remember. They are *relatively* new compared to some of the old timers here in SA:)
@Sal Demir Sal - I really respect and agree with your article! But I also love
ARKK which is based upon similar viewpoints! It's the future that counts! Past financials don't show the future, and are a good way to get in trouble. Good job!
EV_supporter profile picture
So far TSLAQ lost about $50B shorting TSLA. That amount is tiny compared to what they will lose in the next 10 years. They will lose so much money that they don't want to hear about Tesla again. In the end everyone will get what they deserve.
User 47429802 profile picture

Tesla longs have lost $220 billion.
EV_supporter profile picture
@User 47429802

Some longs did lose money. Collectively all longs together made a lot because the stock went up 200 fold.
User 47429802 profile picture

"Some longs did lose money."

Anyone long before 2021 has shared in the $220 billion in losses, regardless of their overall gains.
Bill Cunningham profile picture
There's a portion of your model which is way too negative. It has to do with the "non-controlling interests" ($850 million) and "redeemable non-controlling interests"($604 million).

This mostly has to do with the SolarCity acquisition. SolarCity had sold interests in its solar installations to outside investors partly for cash and partly because they couldn't use the tax benefits. SolarCity was reporting gains on these sales (investors were paying up for the tax benefits) even though the piper eventually needs to be paid. Tesla added some more solar leases to the pool and also added auto leases, both of which added gains which came close to offsetting the "losses" (outgoing payments) on prior deals so it wasn't particularly noticeable.

Tesla terminated the auto VIE's in Q3, they aren't doing a lot of new solar leases and few are being added to the pool anyway. As a result, Tesla is now in the process of paying the piper. It's why the numbers have recently turned noticeably negative.

You'll notice the redeemable portion has actually decreased from $643 million to $604 million over the past year due to redemptions. Tesla will continue to do redemptions so there's $604 million to go (probably over many years) plus earnings on the outstanding interests they are entitled to.

The $850 million of non-controlling interests will continue to get "earnings" as well as "principal payments" as well. I'm watching these figures, and Tesla doesn't provide much disclosure (my biggest issue with the company) but my best guess now is that future quarters will look similar to Q4 for a while, possibly modestly increasing.

Tesla doesn't really have a loss here in any case. They show 100% of the income and cash flow for these solar leases and then subtract at the bottom the portion that doesn't belong to them but rather the outside investors. Although I'm not questioning their GAAP presentation, analytically its best to subtract these amounts from the solar gross margin and cash flow. Interest expense directly attributable to the energy segment should be subtracted as well. It highlights just how poorly that segment continues to perform.

The flip side is that if SolarCity/Tesla Energy's continued losses are subtracted out, the auto. segment doesn't look as bad.

One of the implication of the non-controlling interests is that Tesla didn't buy 100% of Solar City. These interests still retain their ownership portion. Furthermore, they get regular payments even though TSLA investors don't.

I originally came to Tesla via SolarCity. There continue to be major problems there, some obvious, some not. I hope you now understand why I question Tesla's valuation.

I've written a number of articles about Tesla Energy over the past year or two:

"Tesla and its Energy Business, A Deteriorating Trend"

"Tesla's Day of VIE Reckoning Approaches"

"Tesla's Day of VIE Reckoning Has Arrived"

I've also written articles shooting down undue negativity:

"Tesla's Cash Balance to Remain Close to $5 billion"

SolarCity's Confidential Treatment Orders are not a Concern for Investors"

I hope you will read these articles and consider the issue objectively.
Sal Demir profile picture
@Bill Cunningham Good points. Honestly I was trying to be as conservative as possible so I just gave that one and all similar hard-to-predict lines the worst case scenario values. Anyway, they may be material now but won't be as much in the coming years.
Bill Cunningham profile picture
@Sal Demir

"Honestly I was trying to be as conservative as possible "

Honestly, you just seem to be extrapolating everything out without really understanding Tesla's business.
Sal Demir profile picture
@Bill Cunningham is that why you've lost all that money and caused your readers to do the same? Must be tough:/
After 17 years in business Tesla is producing less cars per year than Ford was in 1920... And Ford literally had to invent the production line during that time..
Ascended profile picture
Read through most but some of the text and images are tiny... (phone app). What was his PT?
@Ascended read through some of your comment but text was tiny (phone app). What are you asking?
Ascended profile picture
@Seeking more alpha than you PT... what was the authors Price Target.
@Ascended sorry text is still too tiny.
maximnl profile picture
Great analysis, out blowing anything i saw in years. Many investors do not get , so good for smart money. Analogy with apple is brilliant. Tesla will be the largest company , matter of time. Even stronger, it will be twice larger than second place. Cannot say in dollars cause it is garbage over 5 years.
Sal Demir profile picture
@maximnl Thanks. I'm not clear on your last sentence though. What do you mean?

"Cannot say in dollars cause it is garbage over 5 years"
@Sal Demir, he expects hyperinflation. Which is very improbable. Great article!
gametv profile picture
@maximnl Apple analogies are always poorly drawn because the software component of value for a cellphone is much higher than for a car.
bazooooka profile picture
I wish Elon/Tesla had bought Billions worth of BitCoin many years earlier.
Jack Charles Miller profile picture
@bazooooka Maybe it is still early? People were saying its too late back in 2017. (P.s I haven't gone into bitcoin yet)
arondaniel profile picture
Hey has anyone stopped to consider why traditional auto is curtailing production at the exact same time Tesla is ramping up?

Traditional auto has a traditional supply chain that can't even adapt to temporary shortages! You can forget about it adapting to long-range EVs quickly & cheaply enough to stave off bankruptcy.

Case in point. Your gasmobile has 80 ECUs from external suppliers. Not an exaggeration. Not beneficial at all. Not easily fixed.

This is your discovered attack moment. Traditional auto has lost.
Sal Demir profile picture
@arondaniel VW is doing the best among them IMO but even they are significantly behind. GM acts like they are 100% in on EVs *publicly* but when you look at their overall ICE and EV actions, they aren't all in.

Anyway, agreed, I think we'll see a lot of dinosaur OEMs bankrupting or consolidated in some other form.
I ignored your advice 8 years ago (without any regrets at all) and probably will ignore this latest advice today.

I agree that NKLA is essentially a grift.
Sal Demir profile picture
@Hank890 and maybe we'll chat again in a comment thread in 7-8 years and this time I'll be like "I told you so Hank. Twice" ¯\_(ツ)_/¯
wsattler profile picture
@Sal Demir by that time Tesla will be worth close to 0, the bulls will be quiet
@wsattler .......Nah, Tesla will never go to -0-. the Chinese will own it long before then. Of course it won't be worth 12X+ earnings then.
Great article! Thank you Sal! Even though your posts are few and far between, I will be following you closely. What many people here don’t seem to realize is that you have vision and credibility, proven by your track record.
Sal Demir profile picture
@ib1gymnast Yes, they think I put that headline for a "victory lap". My reasoning was "credibility".

I.e. Now that Tesla is the sexiest stock in the world, everybody's sharing crazy price predictions, Youtube, SA, even TikTok:). So mine would be yet another crazy price target among hundreds. But when one sees that I had done this 8 years ago with relatively good accuracy, it's a whole another game.

My original pricing model was very rudimentary and had a lot of shortcomings. (I was a newbie, didn't know even half of what I do today)
But it was directionally right. And considering it was almost a decade out, it ended up being relatively accurate *about a year late*.

My new model is much more elaborate. I thought about every little detail I can over the years so I'm highly confident it'll be more accurate this time.
Yes, we're 100% in an EV Bubble. Simply put, there are too many "companies" with $0 Revenue and nothing but renderings to show. Unfortunately, naive investors are buying them up as they are searching for the "Next Tesla".********** hmmm, Dot Com 2000, but it's different this time.
arondaniel profile picture
@fiwiki The dot.com comparison is useful, but remember. Every emerging industry will produce a handful of winners along with the multitude of losers.
@arondaniel @fiwiki Right on! In the Dot Com time I went for Amazon! I always invest in the future, which provides many bags of profit!
@arondaniel Every emerging industry will produce a handful of winners along with the multitude of losers.***** Yes, the U.S.bankers have created quite the " FED" driven casino since 1913.
Tesla barely made a profit in 2020, despite the valuation.
Tesla has been subsidized for years. Its main area of revenue till this day, are the environmental credits it is getting.

Elon knows he has a lot to be grateful for. Government environmental policies helped in keeping Tesla afloat.
unfortunately, he really isn't grateful. He is mad at California, and he says it is unwelcoming to entrepreneurs, but he somehow became the 2nd richest person in the world due to California.

He is an ungrateful bore in reality.
Sal Demir profile picture

"Tesla has been subsidized for years. Its main area of revenue till this day, are the environmental credits it is getting"

Your statement is 95-98% false since;

2018 2019 2020 2021 (Est)

Revenue 21.46B 24.90B 29.54B $56.49B

ZEV Revenue 419.00M 594.00M 1.58B

% of Revenue 1.95% 2.39% 5.35%

But sure, you can continue believing in your "alternative facts":)
@Sal Demir

Nonsense Sal.

Tell us what the percentage of earnings of the historical state subsidies were. Oh, right. There were no earnings back then.

Tesla almost BK'd several years ago and was saved by the Chinese investment. Dispute that.

Tesla equity thrives on the sales, revenue, and earnings provided by the Chinese investment in the Chinese production facility, enabled by Chinese local capital, and Chinese labor.

Tesla's success in the US stock market is attributable to the performance of the Chinese facility, not Hawthorne, CA.

Elon's "great success" in recent years is almost all attributable to the rise in Tesla's stock price, not the earnings generated by Tesla (or any other Musk firm) as a whole, and certainly not the sickly earnings generated in the USA since the Chinese plant opened.

I do approve of the way Elon has sold billions in overvalued Tesla stock as it has accrued, and poured most of the windfall, aftertax remainder, billions so far, into SpaceX. That is certainly a positive outcome.

And who knows, perhaps future Tesla facilities outside California (and especially in Texas) may generate better earnings, eventually.

But Tesla equity's success remains built on a foundation of hype and ideology, not concrete earnings prospects in a competitive environment vastly evolved from 2017.

But feel free to continue pumping the self-serving, smug partisan hype that so becomes magnificent genius prophets such as yourself.

One and ALL,..... MAKE WAY

for the LEMMING PARADE of the future.

Note, while I do not own (and never have owned) any Tesla stock directly, I do own, and have profited in years past, and in 2021, by investments in other automotive start-ups. The best single return came from the Israeli start-up, Mobileye.
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