When Amazon reached that mark in 2009, their annual profit was slightly over 1B... And the car industry isn't famous for particularly high margins.
> Expect Tesla's sustainable profit to be around $500 Mil per year and it's share price must be cut in half to justify that
There are no such rules for share prices, especially with this kind of revenue growth. Nobody knows where Tesla will be in 5 years but most shareholders expect easily an order of magnitude higher revenues and possibly profits.
- new vehicle markets (def. semi trucks, perhaps boats and trains as well) - solar - military
They don't have a ton of baggage like their competitors, so they can pivot their battery business in a variety of ways without too much additional investment.
The real question is if they can stay ahead of competition as they expand.
So far they have not only expanded their lead (e.g. Nissan Leaf used to be a bestseller), they've also proven that they got their priorities right from the start. Look at the new Audi e-tron, the Mercedes GLC and the i-Pace: they're all suffering from horrible aerodynamics that cost them 20% or more range at freeway speeds compared to Teslas. They have no fast charging networks able to support similar sales numbers even to Model S/X. Tesla apparently did proper planning while the big car makers are just trying to produce their usual cars with electric engines. They are now making expensive mistakes that Tesla avoided altogether, so I'm confident about Tesla's leadership.
You can't even buy a Leaf in most of the country, so if you were to scale up sales of the Leaf to the same geographic territory as Tesla sells to, the sales would be about comparable.
Tesla apparently did proper planning while the big car makers are just trying to produce their usual cars with electric engines.
Ah, proper planning. That certainly explains the billion-dollar line collecting dust, the year-long delay on every model, and their inability to properly deliver finished cars to their customers when promised (i.e., basic logistics). The cars you've mentioned aren't meant to have maximum range at high speeds; they're meant to have X range at commuter speeds while providing a luxurious ride. You'll also have to demonstrate (with cites) that the aerodynamics will cost them 20% of posted range, since those aerodynamics have already been factored into their range as part of the federally-mandated testing.
What are you even talking about? I bought my Model S 2 years ago and waited the same amount of time as for the previous BMW (3 months), which didn't even come from overseas (I'm in Europe).
> The cars you've mentioned aren't meant to have maximum range at high speeds; they're meant to have X range at commuter speeds while providing a luxurious rid
And this is why they are no Tesla competitors for most people - who don't want or can't afford a second car for long distances.
> You'll also have to demonstrate (with cites) that the aerodynamics will cost them 20% of posted range
Lots of people have, it's simple physics. At higher speeds, air resistance causes most of the energy consumption. The results can be calculated easily:
https://www.ecalc.ch/evcalc.php?lang=en
130 Km/h (= 80 mph)
Model S = 22 KWh/100 Km
Mercedes EQC = 30 KWh/100 Km
i-Pace = 28,5 KWh/100 Km
P/E ratios aren’t effective for high-growth or quickly-declining companies. The PEG ratio attempts to compensate for this.
Q2 and Q3 will show that Tesla has pretty much plateaued. Profit growth is even lower
And the iPace owners are absolutely glowing in their reviews of the car in a way I've never heard Tesla owners get. Indeed--while most Tesla owners I know talk their heads off about the charging network[1], they tend to be defensive about the actual quality of the car itself in ways that luxury car buyers shouldn't be.
[1] While Tesla has a geographically large charging network, it's density is pretty horrible. In DTLA for example, you're 9 miles away from the closest Supercharger, and condo/apartment dwellers are SOL for installing their own unless they want to pay excessive fees to have one installed in their parking spot. There are a number of standard EV chargers through the downtown area, and the number of non-Tesla chargers exceeds the number of Tesla-only chargers by a factor of at least 10:1.
Also, I've ridden in all of the Teslas (including the Roadsters, thanks to a former boss who collected cars) and the Model 3, while comfortable enough, is only roughly as comfortable as my Camry and certainly isn't as comfortable as the $65k+ cars other friends drive. IMO, this is Tesla's big problem. Their cars are expensive, but you're paying a lot of money for the brand and while that can get you started, in the auto market you eventually have to start competing based on features like comfort, etc.
It’s more fun to drive than my old Camero SS. It’s more comfortable than my old Infiniti. I absolutely love the interior aesthetic. And I just paid $3,500 to PPF wrap it because I think it’s absolutely gorgeous and I want to keep it looking that way.
Oh, and I paid $45k not $65k, and it saves me at least $100 a month on top of that.
You are blowing smoke with “roughly as comfortable as a Camry”. The ride quality is better than BMW in my opinion, and that’s before throwing in the mental benefits of Autopilot combined with no engine noise making my commute the most peaceful part of my day.
[1] https://electrek.co/2017/12/21/tesla-tsla-tops-customer-sati...
https://www.cheatsheet.com/money-career/the-biggest-problems...
That's sort of the point, the Supercharger network is designed to facilitate long distance travel. So the stations are spread out along highways. The other networks are bunched up in cities. Try using plugshare.com to plan a trip using CCS chargers vs Superchargers. Say San Francisco to Portland, or Denver to Dallas, or LA to New York.
But yes... I expect Toyota to have more affordable TCO, particularly on the maintenance side where Tesla gets ripped often. The will need to adjust to be competitive outside the luxury market.
For example, if every BMW or Audi dealership had some charging spots for owners of their cars, it would probably have more nationwide coverage than Tesla's Supercharger network. The dealerships are also frequently located in convenient places near major highway exits, etc.
Being able to charge at your local shopping center is nice but it's not a necessity for electric car ownership.
Even if people wanted to charge at dealerships, dealerships aren't incentivized to sell electric cars, much less charge them.
The proof is that any Chevy dealer that sells the Bolt should have a public charger already, but I'm guessing few do.
Putting universal chargers at existing gas stations or buying an entire brand and converting to charging makes way more sense.
* Seattle
* Bellevue
* Fife
Or if you go via PDX.
The dealer in the tri cities or Yakima is out of the way and the one in Spokane would add a couple hours of driving time.
There are no dealers on the direct route home for me. Realistically I could only stop at one.
And comparing the Tesla Model 3 to a Chevy Bolt is very similar!
For instance, Tesla is prepared to sell their cars at a loss, to gain market share. Amazon had the same strategy twenty years ago. Sears was never willing to do that, and Chevy wasn't going to do that with the Bolt either.
I like the Bolt - it's a very nice car. But the Model 3 seems to offer so much more for the money.
[0]https://en.wikipedia.org/wiki/Ford_Thunderbird_(eleventh_gen...
There is no rule like that on a growth stock. You don't value growth stock on a P/E ratio, but some measure of future discounted cashflows.
LOL what?
Show me another company with $50B market cap growing at 50% a year on the top line to deliver $2B in profits.
I'll wait.
50% profit growth is delusional at this stage
Q42018: 63,100 Model 3s delivered.
That's a 13% growth rate in a single quarter which is more than 50% growth rate annualized.
https://assets.bwbx.io/images/users/iqjWHBFdfxIU/iqPFhpeWEIS...
Article: https://www.bloomberg.com/graphics/2018-tesla-tracker/
Would you normally argue that a yearly price increase of ~3% on a car portends anything in particular about demand? I guess it implies that they expected demand to fall if the increase had been ~6% instead, but that doesn't seem like anything that would preclude 50% worldwide growth.
Tesla is dropping the sticker price of their vehicles because they think that demand for their cars is at least somewhat elastic with respect to sticker price, and they're in a better position than you or me to have the data and analysis on this. (Tesla has also announced that this is why they're dropping the price so I'm not sure why you're arguing this point?)
Economies of scale are not related to this drop in price. Economies of scale refers to it being cheaper to product an product at scale due to efficiencies in the use of the largely fixed-cost capital expenditures. Companies don't usually drop prices due to EOS until at least a quarter or two after they've reached that point in the production cost cycle, largely to confirm that they've actually reached EOS operationally, and some company's retain the efficiencies from EOS as profit until/unless they need to for competitive market reasons.
Economies of scale allow them to do this.
It's clear Tesla has run through higher margin demand. There aren't many people in the world who can afford a $50,000 car. Tesla is a niche market car, but priced as a mass market (like iPhones) product.
Expect Tesla's sustainable profit to be around $500 Mil per year and it's share price must be cut in half to justify that