I’m not pro-Tesla, I think they’re horribly mismanaged, but let’s be real.

The Model 3 is selling well, and ONLY in the US. Even if they hit peak demand they can just start selling to Europe and China (planned for later this year) and they’ll have plenty of new customers.

China has a higher barrier to entry than any other market, esp. in the EV market, which is going to favor the homegrown options. The current trade war isn’t going to help Tesla. My prediction is that Tesla remains a novelty brand in Asia. Japan is similarly capable of taking care of its own market, and I wouldn’t want to take on Toyota when it comes to exports to South Asia, Africa, etc.

> China has a higher barrier to entry than any other market, esp. in the EV market, which is going to favor the homegrown options.

Tesla is already positioned ahead of other auto makers with the construction of the Gigafactory 3 along with a deal with the Shanghai government to build a wholly-owned local factory (a notable exception).

Not ahead of Chinese automakers. And Tesla is paying for the privilege of that foothold. Meanwhile, Toyota is firing up battery supply in Thailand. Not to mention that Panasonic and Chinese suppliers are the real source of Tesla batteries.

>Not ahead of Chinese automakers. And Tesla is paying for the privilege of that foothold.

The context was the barrier to entry in China. That was already implied? No other foreign auto maker was able to cut the same deal as Tesla in China.

>Toyota is firing up battery supply in Thailand.

Toyota/Lexus have zero plans for electrification in the near future. In fact, they have instead doubled down on Hydrogen with the Mirai.

http://www.thedrive.com/news/22429/toyota-to-double-down-on-...

https://corporatenews.pressroom.toyota.com/releases/toyota+d...

>Not to mention that Panasonic and Chinese suppliers are the real source of Tesla batteries.

Not really sure what point you're trying to make here. Tesla is probably the only automaker (outside of china) that builds their own cells and battery packs in-house.

You’re wrong about Toyota. They’re just not in the habit of rushing to market with empty promises. https://www.toyota-global.com/innovation/environmental_techn...

The point about Panasonic is pretty self-evident: Tesla isn’t going to win Asian markets if its upstream suppliers are all in Asia. They’re effectively a middleman and they’re paying for the right to be in-country. It’s not hard to see them being squeezed out by local firms.

That's why they're building a factory in Shanghai right now: https://electrek.co/2018/12/31/elon-musk-groundbreaking-tesl...

Tesla has made mistakes...especially Elon's timelines. Those have gotten better of late.

That aside, one has to also consider the limited number of stores that Tesla has at this point in time. As they increases the number of stores their market reach will increase. Combine this with new global markets and it is clear that they will do fine for at least the next couple years.

The story here in the market is that Tesla has already saturated the big markets in the US for EVs--namely, highly populated metropolitan centers. While this is a big country, the rest of America is very spread out, and the ROI on building more stores will be far lower.

The configuration opened up in Europe in December with a promised delivery in February/March timeline, so there should be a lot of the January production going to Europe.

> Even if they hit peak demand they can just start selling to Europe and China

To what extent would they have to invest in charger networks there, though?

They already have, almost as much as the US. Take a look at the supercharger map.

Thanks for the pointer! It looks like Western Europe has reasonable coverage, but plans to at least double that. Eastern Europe (including Greece) has no existing superchargers, but extensive expansion plans.

I live in Montreal and I see a few Model 3 all the time regardless of where I drive.

It's called Pent up Demand.

US is the richest and most car friendly nation of the world. There aren't many countries in the world who can afford a $50,000 car especially when there are poor charging infrastructure.

There are enough countries, though.

Regarding charging infrastructure, have you seen this map lately?

https://www.tesla.com/findus?v=2&bounds=76.18385340904877%2C...

I don't think this includes the convenience fee in having to use a supercharge station to recharge your car.

If you don't have the ability to charge at home (condo or apartment), the idea of waiting at some energy pump for 30 minutes every morning is the opposite of alluring.

If you don't even understand the basics of electric car ownership you should really do some reading. People who don't have at work charging or at home charging are not the market for electric cars. A few people do, but very few Tesla owners I've heard of actually have neither. If you're buying a $35,000+ car why are you living in an apartment instead of using that towards a down payment on a condo or a house?

Because people are bad with money. Drive through an apartment complex and then drive through a neighborhood of starter homes; I'll bet the former has nicer cars than the latter.

I've seen plenty of $35k+ cars in ghetto apartment housing. People seem to look at the monthly payment instead of the total cost of the car can never seem to get enough saved to buy a house.

I don't know which is the main buyer of higher end cars, but they shouldn't completely discount people who prefer to buy cars than save for houses.

> using that towards a down payment on a condo

As I stated, you will have trouble charging at a condo. In the bay area, most new development is condos, and I don't think buying one means you're bad with money.

Given that 30 minutes of supercharging will add over 200 miles of range to a Tesla, I doubt many people will need to do this every morning.

Still, 30 minutes is a sizable fraction of most people's free time in a given day. Especially compared to 5 minutes needed at a regular gas station.

Mmmm, it only takes 5 minutes if you happen to live at a gas station.

Demand ceiling for the US or for the world? I suspect they've hit the former, but that there's a lot of demand in the latter.

The market for EVs is expanding. As Tesla starts shipping worldwide they will find the sweet spot for the US.

Big takeaway here is they are very profitable producing at current rates. As they bring out new models they will continue to grow at 30-50% per year.

> "they are very profitable producing at current rates"

You don't know that. They had one big, profitable, immaculate quarter in Q3 by pulling all demand forward and using every accounting trick in the book to show profit. There is no guarantee there will be another quarter like that. In fact, if Tesla's earnings history shows anything, it's that losses will be even bigger than before.

q3 was also helped by the fact that, despite increasing the total amount of tesla's sold by ~66%, they opened only 1.1% new service centers and only 3.2% new superchargers. The tesla experience is going to be incredibly degraded as time goes by.

Bingo! Q3 and Q4 numbers should absolutely be taken with a grain of salt. It was a confluence of all positive points. a) Accounting b) Pent up demand for larger priced vehicles c) Peak Economy

Going forward, a) Weakened Global Economy b) Everyone who is passionate about owning Tesla has bought one.

Sustainable demand and profit will be clearer in 2019 Q2 and forward.

I can make a public bet that it wouldn't be greater than $150 Million per quarter

They're not even really selling outside North America yet, so that's silly. Of course there's a ceiling of expensive cars, they're selling more of them than anyone else, right?

Yes, it's called Pent up Demand. We don't what sustainable demand for M3 is yet. For US, you'll see that in Q1. For Rest of the world, Q2 will paint that picture. So, whatever profit (or loss) Tesla makes in Q2/Q3 are truer numbers. It would have also reached a steady state.

Tesla's marketcap should be at the most 100x Q2 profit. TSLA is definitely over-priced