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Tesla Growth In The Next Two Years (2022–2023)

When you are very small, growth percentages can be astronomical. Going from one in your first year to three in the next year to 30 gives growth of 200% and 900%. But after these first few years, 50% growth is considered crazy high. Tesla is now big enough that growth of 50% per year has never been done before by a manufacturing company of this size everywhere in the world.

Tesla is expecting to grow by 50% for a number of years, and even surpass that number in the next two years. This growth is both in volume and in revenue while steadily increasing margin. Based on history, the safe opinion is calling this impossible.

But never bet against Elon Musk. Tesla has some products and projects in the pipeline that can help with these goals. This is an incomplete inventory of what can help to reach these impossible growth numbers.

Tesla Giga Austin & Giga BB

First, there are two new gigafactories with production lines designed for 500,000 vehicles per year ready to start production. Both of these factories will start building additional production lines once the current ones are started. A new production line can start deliveries within a year.

In Austin, the next line will likely be for the Cybertruck, followed by a semi truck factory. Giga Berlin-Brandenburg (BB) needs a Model 3 production line followed by a line for the $25,000 model. If the luxury car buyers in Europe start to look seriously at electric limousines, Giga BB might need a line for the Model S & Model X. Building those factories will not end with the Model Y line getting rolling.

Tesla Giga Shanghai

The existing gigafactory in Shanghai is also still growing. The Model Y production line will grow to 500,000/year, just like the lines at Giga Austin and Giga BB. Shanghai will also need a $25,000 model line. Hopefully, these $25,000 models will be localized models. Expensive cars have mostly global model lines. The lower half of the market is much more attuned to local expectations. In China, these should probably be small sedans (CUVs) and in Europe small hatchbacks (CUVs). A crossover utility vehicle based on a small sedan is different from such a thing grown from a hatchback.

China is the biggest market for top luxury cars. Looking at the numbers sold of the top models from Mercedes, BMW, Audi, Porsche, and a handful of others, local production of the “Long” version (stretched by a foot) of the Model S & Model X is likely.

Fremont Production R&D

With this much Model Y production capacity, Model Y production in Fremont can be halted. This would create room to do with the Model 3 & Y production lines what Tesla has done with the Model S & X production lines — a complete redesign and rebuild to a higher capacity.

It would also create more capacity for R&D on production technology. This is the expertise that Tesla sees as its biggest competitive advantage in the long term. Toyota created its production moat by procedures, discipline, and organization. Tesla is focused on doing it with first principles based technology. The main center for the development of the alien production dreadnought is Fremont.

Tesla Energy

Tesla hopes to finally acquire enough batteries to start its energy storage division in earnest as well. It is building a new Megafactory in Lathrop, California, halfway between Fremont and Giga Nevada. If this factory can get to full production of 40 GWh/year, it will be about a tenfold growth of Tesla’s current grid storage business.

Tesla solar is still trying to find a business model that fits the current PV market and Tesla’s unique way of doing business. Not much growth is expected here. Giga New York and Giga Nevada are not growing much in the next two years. The potential of storage and solar to grow to the size of the automotive business is still realistic. What is holding it back is mainly supplies and management capacity.

Tesla Software

Besides making products in factories, Tesla is also a software company. It is not only writing the software for its cars and its enterprise management systems. Its Autobidder and virtual power plants make its home and grid storage systems more valuable. The software for determining the risk of individual drivers is the foundation for Tesla Insurance.

The best known and eagerly awaited software product is its Full Self Driving (FSD) system. Without certification, it can be used as a very advanced level 2 ADAS (Advanced Driver Assistance System). It will be frustrating to still pretend to pay attention to the car driving itself when the system is so good that it should get its own driver’s license.

Even as an ADAS system, this software will generate a lot of revenue. The revenue from using this system in robotaxi services will not start to flow in the next two years in meaningful quantities, though.

The last big revenue stream that is coming in 2022 is from the Tesla Supercharging network. The network will triple in the next two years, both to accommodate the drivers of the new cars Tesla will sell, and to have room for all the non-Tesla cars that can come visiting Tesla chargers now. Tesla has the largest fast charging network and very competitive pricing. (Note, however, that it lacks the most attractive locations in Europe, because those were only available to CPO companies that served the public at large, not just its own client base.)

Summary

Let’s end with a recap of all the growth drivers in a list format. Because these are all new production facilities, the projected numbers could be lower in reality. If supply shortages keep impacting production, or if there is another development that hurts execution, then these numbers will be lower.

There are so many external influences on the software and services growth trajectories that there are no numbers behind these products. Some will not be sold separately but embedded with other products.

 
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Written By

Grumpy old man. The best thing I did with my life was raising two kids. Only finished primary education, but when you don’t go to school, you have lots of time to read. I switched from accounting to software development and ended my career as system integrator and architect. My 2007 boss got two electric Lotus Elise cars to show policymakers the future direction of energy and transportation. And I have been looking to replace my diesel cars with electric vehicles ever since. At the end of 2019 I succeeded, I replaced my Twingo diesel for a Zoe fully electric. And putting my money where my mouth is, I have bought Tesla shares. Intend to keep them until I can trade them for a Tesla car. I added some Fastned, because driving without charging is no fun.

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