With the Tesla stock at around $180/s, the negative articles are increasingly coming from Seeking Alpha, Fools, Forbes, Bloomberg. Yes, the stock is pricey and volatility is likely. However, most analysts are making projections on sales, production economies on a linear basis. Advances in technology and markets are seldom linear.
Tesla may have been producing at the rate of may be 600 MS/wk. However, the incremental investments that the company is making in design to improve manufacturing plus automation and supply chain optimization will lead to production capacity that may indeed reach 1,000/wk (50k/year) within a few months. All this with a marginal increase in capital investment of may be $200M and additional shifts. In the annual conference and other announcements indicate this possibility and I think Elon is lowballing. Also, MS uses mostly commodity components and these falling big with volume and long term contracts. Gross margins may indeed exceed 25% and be closer to 30%.
Model X manufacturing facilities will need incremental investment. It will share many of the facilities that MS uses and common components. Any estimates? I think I heard Elon mention $200M additional capex. I think it will be closer to $300-400M considering the existing plant, equipment cost around $725M.
I am looking how the cost of electromechanical equipment like washing machines, hard drives, etc fell over the years with the use of automation and of course labor outsourcing. Tesla component of labor is falling with volume and automation. It certainly looks like the Gen3 with the advances in battery tech that Tesla is implementing with Panasonic would enable the company to sell the car in the $35-50 range (for souped up version!).
Along with cheap charging at home and supercharger network... the ICE industry could get seriously hurt. Analysts certainly have doubt have heavily bet against Tesla. So far they have been wrong.
Please Login to Comment