Tesla's 50% Compounded Growth Rate Analyzed
Elon Musk and Tesla have stated that Tesla will grow deliveries at around a 50% rate compounded annually. Is this still possible?
Elon Musk reiterated that Tesla will experience an amazing Q4, 2022. Many people he is saying this to try and pump the company, but I think he is just being real and optimistic. Many people are expecting around 450,000 deliveries for Q4, 2022.
Elon Musk anticipates this 50% growth for as far into the future as can be seen. How far is this really? First, this is probably production and not deliveries. The reason it will be production is Tesla is trying to smooth out deliveries and not have a rush at the end of each quarter.
Many people may say that this is a demand problem, but just look at Tesla's deliveries in September - they were 2/3 of the deliveries of the quarter. I think Tesla will still have a final push at the end of Q4, 2022.
Tesla got too big and there weren't enough ways to transport all the cars in Q3, 2022. China's demand has remained a question. Elon Musk says they are focusing on the high level and the best they can tell is that Tesla will grow at a 50% annual growth rate.
50% or Greater
Actually, Elon Musk said that Tesla could grow more than 50% - or even a lot more. That's very interesting to hear and what could account for that?
I think it will be the smaller and lower cost vehicle. If Tesla can figure out how to make that vehicle with a single casting and without a frunk, and with less working parts than the typical Tesla, then I can see Tesla growing more than 50% in some years.
The 4680 batteries will also play a big role in this, assuming they can get ramped to full volume production.
If Tesla was somehow able to grow at 50% until 2030, then Tesla would deliver 35 million units. I think this depends very much on the next vehicle, the compact robotaxi. If Tesla FSD truly becomes widely adopted, then I believe Tesla will have a very simple manufacturing process that makes the casting in one go.
Tesla is going to work on other vehicles too. There is the Cybertruck, the Roadster, an eventual van as well. There is going to be a vehicle for every major segment.
To sum up, I believe it will be the compact vehicle that allows Tesla to grow at 50% per year, especially with improved manufacturing processes.
Do you think Tesla will grow at 50% per year until 2030?
For more information, see this video by Tesla Economist:
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Jeremy Johnson is a Tesla investor and supporter. He first invested in Tesla in 2017 after years of following Elon Musk and admiring his work ethic and intelligence. Since then, he's become a Tesla bull, covering anything about Tesla he can find, while also dabbling in other electric vehicle companies. Jeremy covers Tesla developments at Torque News. You can follow him on Twitter or LinkedIn to stay in touch and follow his Tesla news coverage on Torque News.