We knew from the moment Tesla sold out of vehicles before the middle of Q2 2021, that the number of vehicles Tesla sold and delivered would break records. By delivering over 200,000 vehicles (and selling them), Tesla didn’t just break records. It went Plaid mode. What does this mean? Gali from HyperChange took a dive and pointed out that Tesla’s production rate has now surpassed 800,000 cars per year. (Tesla produced 206,421 cars in the 2nd quarter. Multiply that by 4 and you get 825,684). Although this sounds little compared to legacy auto, this is a game-changer for those rooting for EVs and clean energy. It’s also a game-changer for a company that many said would fail.
Gali pointed out that despite some negative headlines in the press, all that really matters is how many cars Tesla sold. This was another record for Tesla — up over 100% year over year. This, he pointed out, is an over 800,000 vehicles per year run rate. Loup Ventures notes that the 122% growth year-over-year is especially notable despite Tesla’s challenges in Q2. One of those challenges is the ongoing chip shortages that are stalling production across the auto industry. Loup Ventures sees the 2021 total falling between 850,000 and 900,000 based on historical trends, which is close to CleanTechnica‘s forecast of 901,450 sales in 2021 (a forecast that may be revised downward depending on new gigafactory progress and Q3 numbers).
Gali dove into those numbers and highlighted the $122 year-over-year growth. He noted that last year, sales were hurt by the pandemic, and this year, we have an odd economy that is still recovering, but in light of these challenges, Tesla is doing pretty well.
“Despite that, we have more than a doubling of production. And you think about these other vehicle makers like Ford delivering about 450,000 cars in the quarter [editor’s note: that’s only U.S. sales within the Ford brand, not global sales and not the broader Ford Motor Company], Tesla’s rapidly catching up to the scale of these massive automakers and already having higher profit margins. So, the trajectory is clear, like if you just look at this chart, you can see that every single quarter, Tesla’s putting up incredible growth numbers, and I think we’re setting up for a massive turbo charge at the end of the year.”
He explained that if you looked closely at the numbers and take out the Models S and X, you can see that Model Y sales have been flourishing. He also noted that if you looked only at the Models S and X, they have been hit with the Plaid refresh. In Q1, Tesla pretty much stopped making these two models and it took a while to switch to producing the Plaid versions of both.
“As you can see, the total of Models S and X were under 2,000 units and so now this is going to turbo charge. They just figured out the Plaid. They’re just getting this production off the ground. In the long run, as you can see, Tesla is delivering 25,000 units a quarter of the Models S and X. I think they can hit that and more with these new Plaid variants.”
Gali’s Prediction For The Next 2 Quarters For Tesla
Gali pointed out that there are several things to consider as we look ahead to Tesla’s next two quarters. The first factor is that the Fremont factory is almost maxed out. He pointed out that it’s not going to be able to squeeze much production growth except for the Models S and X vehicles. He thinks they can bump that up to almost 30,000 units per quarter just from getting those lines up to speed.
The next factor is Gigafactory Shanghai which has been expanding since it’s been online. The development of both the Models Y and 3 have been growing and he thinks that the expansion of the factory will be incremental to vehicle delivery growth for the rest of the year.
Gali also brought up Tesla’s newest factories, Giga Texas and Giga Berlin, and noted that although they will be coming online, that will be closer toward the end of the year. The production at these gigafactories will be small and probably not have much impact on deliveries for this year.
Another factor is the combination of Tesla’s revenue from Q1 and Q2. Gali pointed out that based on Tesla’s Q2 deliveries, he estimated that Tesla could have around $11–12 billion in revenue for this quarter alone. Adding that to Gali’s estimate for deliveries and these numbers add up to around a $45–48 billion revenue run rate. His conclusion is that a valuation of Tesla in the $500, $600 or $700 billion range is logical when looking at these numbers. That number will also be up over 100% year over year.
“When I think about the valuation of Tesla from this point looking at these vehicle deliveries with the momentum they have, I think this is a super fair valuation.”
Gali noted that the fact that Tesla is able to cut through all of the noise and post records quarter after quarter show that it’s able to expand, execute, and sell as many of its cars as it can build.
“People love the product, and right now it seems like Tesla’s had astronomical growth. These are huge numbers, right? But this is just the beginning. By 2030, I believe Tesla wants to be selling 20 million cars a year. So, right now, we’re just at 800,000. We’re potentially looking at a 25× increase in production over the next decade for Tesla.”
Gali pointed out that we need to get used to this — that Tesla will continue to grow for years and years to come. You can watch his full video via the embed above or by clicking here.
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