Tesla Disruption

October 14th, 2020

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One point of interest for Tesla is their projected YoY growth rate. Elon Musk has stated 40-50% YoY.

Some analysts will point out that Tesla is unlikely to be the > 50% main player because 0% of anybody has ever been the main player for any length of time that would matter.

In 2018 ~80M cars were sold. I use this number because it's round.

If Tesla makes their cars better to last longer, less cars need to be made.

If Tesla makes cars meaningfully more shareable, less cars need to be made.

If Boring Company makes tunnels that protect cars and roads such that they need less maintenance and cause no traffic, costs decline and cars last longer.

But for additional simplicity, let's assume the rate of reduction and the rate of interest grows at the same rate. So sales in 2030 are roughly 80M.

The question is, how many years does it take Tesla growing 40%/year to get to 80M at current production?

We start with 2020, 500K/year.

2020 0.5M

2021 0.7M

2022 0.98M

2023 1.372M

2024 1.92M

2025 2.68912M

2026 3.764768M

2027 5.2706752M

2028 7.37894528M

2029 10.330523392M

2030 14.462732749M

2031 20.247825849M

2032 28.346956188M

2033 39.685738663M near (~50%)

2034 55.560034128M (over 50%)

2035 77.784047779M

2036 108.897666891M

You get the idea. The "machine that makes the machine" is the product. The "machine" isn't the cars. It's the Gigafactory.

In order to achieve this, they need to be able to build new Gigafactory production capacity exponentially to increase car production exponentially.

They seem to have production under control. And Gigafactory expansion is definately going to be up 40% this year with Berlin, Texas, Kato, Shanghai expansion.

In fact, the 40% growth, may be much much higher. With the new factories going in place, they have some time to figure out the process and tune up for the next doubling over 2 years.

Maintaining 40% growth will be difficult. It will take a combination of building new factories, and expanding each factory.

Perhaps Tesla reaches terminal velocity before then. I guess time will tell.

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jsturgis

ABOUT THE AUTHOR:
Software Developer always striving to be better. Learn from others' mistakes, learn by doing, fail fast, maximize productivity, and really think hard about good defaults. Computer developers have the power to add an entire infinite dimension with a single Int (or maybe BigInt). The least we can do with that power is be creative.

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