Elon Musk’s 2015 Tesla Forecasts Compared To Today — The Future Looks Bright

Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News!

What the past of Tesla tells us about its future.

Flat Earth and Tesla Roadster

A lot of people, including myself, are trying to predict the future of Tesla.

In the news, we hear a lot daily about missed or delayed production numbers and high cash burn. However, Tesla announced recently that it expected to be cash flow positive and profitable in Q3 and Q4 2018, and even more interesting, for all future quarters. Let’s discuss together if these statements can be trusted using the past to predict the future.

The way I do approach this is looking into the statements of the past, assessing what has been predicted for the future until today, and judging people’s statements made today in part by the consistency and accuracy of their statements in the past.

It’s a pretty easy method and some smart scientists may have invented a nice-sounding name for it somewhere.

To get started, I suggest that everybody spend a few minutes with Elon’s interview from the Detroit Auto Show in January 2015, where he was interviewed and gave profound insights about the predicted future of Tesla.

Before listening, though, please review with me some notes on what Tesla achieved in 2015 in order to evaluate the forecasts of CEO Elon Musk compared to facts about what was achieved in the following 3 years. This should help to determine to what extent Tesla has been and is on track.

In 2015, Tesla …

produced 25,202 Model S,
delivered 206 Model X in Q4,
had $5.29 billion in revenue (non GAAP),
had 20.9 % Automotive Gross Margin (non GAAP).

Listening to the interview, I selected a few quotes from the CEO that I found interesting:

Elon Musk: “By 2020, sure, 500,000 (cars), but I think we’ll probably continue past that (…)” (listen starting at 9:50, linked above)

Elon Musk: “I think we should be able to get to probably at least a few million cars in 10 years, per year (…) by 2025, we could probably get to a few million cars per year” (listen starting at 10:07)

I would say Tesla is well on track for that. In January 2016, with fewer than 26,000 vehicles produced in 2015, it may have sounded very unrealistic for most listeners. Today, more than 2½ years later, Tesla is about to produce 11 times that much in 2018, assuming production continues as planned in the last 4 months of the year. To grow to 2 million vehicles in 2025, Tesla has another 7 years to increase the production about 7 times.

In fact, if production growth continues as in the past 2½ years, Tesla will have an output of 3 million electric vehicles in 2021. That’s 4 years ahead of plan.

Although this still sounds like a lot for most people, the growth in percent per year could shrink every year from now on and the production numbers predicted by Elon Musk in January 2016 for 2025 would still be achieved.

Elon Musk: “We will at some point need to start showing a profit” Q: “When will that be?”

Elon Musk: “When will that be? I guess probably when the Model 3 is in full production” Q: “Which is when?”

Elon Musk: “We feel pretty comfortable saying 2020 (…) I think when we’re doing half a million cars a year, I think we should be profitable at that point or we’re doing something wrong. (chuckle)”

However, if you experience deviations from your long term plan in the first few years, the impact on the following years is large. That’s just simple math. Given that Tesla overachieved in most areas until now, the likelihood that it will fulfill its 10 year plan is way higher now than it was back in 2015.

Although some short-term predictions from Tesla that were made in or after 2016 has been proven to be wrong, the long-term objectives have been so far overachieved. Ask yourself, if Tesla delivers on the 10 year plan, will a missed production number for any specific quarter within that time have any relevance for the financial success of the company?

In the news, it is repeated daily that Tesla does not achieve its objectives and forecasts from the past. This has been proven wrong on many occasions when looking at the company’s long-term plan and achieved deliveries, including in this instance.

For the future, we should therefore safely assume that Tesla will be able to produce and deliver a few million electric vehicles by 2025. Furthermore, it seems advisable to believe Elon Musk’s 2015 statement and his statements throughout 2018 that Tesla would grow into a profitable manufacturer as Model 3 production ramps up fully.

The time when Tesla’s future was uncertain can only be found in the past.

Alex Voigt
Munich, Germany

Editor’s note: I’ll add one more note from this video. At 22:15, the interviewer said, “If you get big in the direct sales method — I mean, if you go to an Apple store and there’s a hot product, there are lines that are out the door. If you get hot in the Tesla market, I don’t think car consumers want lines out the door, correct?” After a few moments of consideration and other little comments, Elon said with a slight laugh, “Yeah, I suppose they don’t want lines out the door.”

That was a wild segment to watch now. As we all know, Tesla had humongous lines out the door when reservations of the Model 3 opened. The demand seemed to shock everyone. Following mind-blowing day — March 31, 2016 — Tesla ramped up its production targets for the Model 3. Apparently, Elon Musk didn’t want consumers to have to wait too long to get their cars. In response, he aimed at a new target. At the time, some of the forecasts seemed to be impossible. In retrospect, they were impossible. In other words, in order to satisfy tremendously more consumer demand than initially expected, Tesla tried to move faster than it previously projected it could. While that didn’t fully work, the company has moved faster than Elon Musk’s January 2015 forecasts indicated it would. Ignoring the roller-coaster noise in the middle, that should make anyone who was invested in Tesla based on 2015 forecasts quite happy.


If A Tesla Pattern Has Emerged, What Does That Mean For Model 3?

Is Tesla Model 3 Actually On Original Schedule?

Is Tesla Ever Late? No, Not Really.

Tesla Executes

Have a tip for CleanTechnica? Want to advertise? Want to suggest a guest for our CleanTech Talk podcast? Contact us here.

Latest CleanTechnica TV Video

I don't like paywalls. You don't like paywalls. Who likes paywalls? Here at CleanTechnica, we implemented a limited paywall for a while, but it always felt wrong — and it was always tough to decide what we should put behind there. In theory, your most exclusive and best content goes behind a paywall. But then fewer people read it!! So, we've decided to completely nix paywalls here at CleanTechnica. But...
Like other media companies, we need reader support! If you support us, please chip in a bit monthly to help our team write, edit, and publish 15 cleantech stories a day!
Thank you!

CleanTechnica uses affiliate links. See our policy here.

Alex Voigt

Alex Voigt has been a supporter of the mission to transform the world to sustainable carbon free energy for 40 years. As an engineer, he is fascinated with the ability of humankind to develop a better future via the use of technology. With 30 years of experience in the stock market, he is invested in Tesla [TSLA], as well as some other tech companies, for the long term.

Alex Voigt has 53 posts and counting. See all posts by Alex Voigt