⚡ Tesla wants to build and sell 20 million cars in 2030, that's 30% of the global car market. 𝘈𝘙𝘌 𝘛𝘏𝘌𝘠 𝘚𝘛𝘜𝘗𝘐𝘋?
Let's draw some calculations, assumptions and analogies to find out if that feasible at all:
𝟭) 𝗠𝗮𝗿𝗸𝗲𝘁 𝗴𝗿𝗼𝘄𝘁𝗵
First of all the global automotive sales market is expected to grow by around 40% to 84 million sold vehicles. So of that, Tesla would need to take only 23% (maybe less, if we assume that vehicles will get cheaper on average). Still a significant number.
𝟮) 𝗣𝗿𝗼𝗱𝘂𝗰𝘁𝗶𝗼𝗻 𝗴𝗿𝗼𝘄𝘁𝗵
In 2022, Tesla built 1,3 million vehicles. Meaning, they would have to 15x their output until 2030.
That equates to a CAGR of roughly 60% per year! 𝘛𝘩𝘦𝘺 𝘮𝘶𝘴𝘵 𝘩𝘢𝘷𝘦 𝘮𝘢𝘥𝘦 𝘢 𝘤𝘢𝘭𝘤𝘶𝘭𝘢𝘵𝘪𝘰𝘯 𝘦𝘳𝘳𝘰𝘳!
To put that into perspective: in 2012 Tesla built 2.600 cars. Until 2022 that was a CAGR of 86%.
Regarding the production growth from here to 2030 it is estimated that Tesla needs 8 more Gigafactories. But you have to take into account that existing factories will be constantly upgraded to become more efficient:
for example the new Gigafactory Mexico will decrease the need for space by around 40% by implementing a different production process compared to the usual sequential assembly line type process.
In Gigafactory Shanghai there's a car coming out of the factory every 37 seconds, in Giga Austin it's only 75 seconds or so - that alone means a 2x volume increase potential.
So maybe, Tesla will need less factories than expected - and they build those faster and faster (Mexico shall be build in 9 months!).
𝟯) 𝗦𝗺𝗮𝗿𝘁𝗽𝗵𝗼𝗻𝗲 𝗺𝗮𝗿𝗸𝗲𝘁
The smartphone market has consolidated so much because the economies of scale of the iOS and Android ecosystems outcompeted everybody else with iPhones being the better phones and Androids covering the lower end of the market.
Now if Tesla manages to build a car that is so good and so affordable compared to all other cars in the same segment (let's say < 25.000 US$) they can address 80% of the global car market.
And there are maaaany signs they go down this road, just look at Gigafactory Mexico and the production process there.
If that happens: why wouldn't people buy the objectively best car with the best value for money?
Suddenly Teslas TAM is 67 million vehicles out of the 84 million sold in 2030.
Not so unreasonable anymore, right?
Thanks for the inspiration to this post to Philipp Gloeckler and Philipp Kloeckner in their Doppelgänger TechTalk Podcast podcast.
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