- Tesla can produce nearly 500k cars in 2020.
- Q3 Total Production 138,618 Units.
- Q4 Total Production 151,728 Units.
Much of Tesla's $280B Market Cap has to do with the growth narrative. The $TESLAQ community I follow note how this quarter proves said narrative is broken. I disagree, Coronavirus caused shutdowns removes responsibility for the lack of growth.
Several key assumptions to note:
- Demand is of no concern for Tesla, hence we do not care about deliveries. We'll look at demand later
- Tesla was able to ramp back to pre-COVID levels very soon after reopening
Key dates to remember.
- January 29th, 2020 Shanghai factory closed for COVID
- February 10th, 2020 Shanghai factory reopened
- March 24th, 2020 Fremont factory closed for COVID
- May 17th, 2020 Fremont factory reopened after Tesla sued Alameda County
- Giga Shanghai capacity is estimated to produce 250,000 units/year
- Fremont factory capacity estimated at 500,000 units/year
TESLA SALES 2019Q2 - 2020Q1
|Production in Shanghai (ESTIMATE)||6,714||32,467|
|Production in Fremont (ESTIMATE)||62,950||72,531||79,837||86,958||80,568||43,479|
Based on the reported production numbers and the number of days, I estimate Tesla produced 6,714 cars in China and 80,568 in Fremont in Q1. With the shutdown of the factory in Fremont for 7 of 13 weeks, I estimate, conservatively assuming Tesla required no ramp-up time in Fremont, 43,679 cars produced, with the remaining 32,467 produced in Shanghai.
- Models S/X production at Fremont remains flat as most increase goes to lower margin Models 3/Y
- Shanghai and Fremont each grow production at 10.7%/quarter, amounting to a 50% annual growth rate
- Fremont factory begins growing at 10.7% in Q4, Q3 production returns to pre-COVID numbers
|Production in Shanghai (ESTIMATE)||6,714||32,467||35931||39764||114,875|
|Production in Fremont (ESTIMATE)||80,568||43,479||86958||96235||307,240|
If there was a longer ramp-up period in Q2 for Fremont, Giga Shanghai would have a higher weekly production rate in Q2, and assuming the same growth rate of 50%/annum, Tesla would be even closer to 500k units sold for 2020.
If Tesla is capable of returning production immediately to pre-COVID levels and growing said production by 50%/annum, Tesla will reach nearly 500k units produced. Tesla reaching these levels provides evidence that they should be categorized as a growth company. However, its growth will not be linear. If they are capable of growing production in existing factories at 50%/annum or faster, Tesla's current infrastructure will cap out in early to mid-2020 and new investments in plants will need to be made.
What are your estimates? Where do you think I went wrong?
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