Robot lawn mover
Tesla Can Get to $14,000 Per Share Even Without Robotaxi
I have a variation on the high functioning EV company Ark Invest case which has a $3400 price target for 2024. The Ark Invest case assumes that Tesla only maintains its 17% world market share of electric vehicles. However, what if Tesla captures market share in China that matches Tesla’s 60+% share in the USA? This would be about 4 times more than the high functioning EV case. $14,000 per share.
If there is China demand at 60+% levels, then this would be 1.2 million cars if China has 2 million electric vehicles in 2020. This would take $11 billion of additional factories and expansion in Tesla in China. This make take 18 months to realize. If there was a series of expansions opening every quarter with another 150,000 to 300,000 cars per year of capacity.
2 million cars in 2021 is not out of the question. If those are at average selling prices of $50,000 each then that would be $100 billion in revenue by 2021. If those are at 25-30% auto margin and 15% profit margin then earnings would be at $15 billion in 2021. If PE was at 40 then this would be a $600 billion valuation in 2021.
Tesla would have to suck up all of the new battery capacity from Panasonic, CATL, LG Chem and any battery factories that Tesla makes.
Production ramping factories in US, China and in Europe and the launch of the Model Y, Semi and then the Cybertruck will continue to drive demand for all capacity that is built.
In 2021 and later, the Tesla story will shift more and more to even better batteries and self-driving.
There is also the power storage, solar roof, insurance and service and software businesses.
If you had acted upon my highly favorable Tesla articles or the bullish Tesla newsletter it would have been very profitable.
Elon having a lot more money to use just means he will change the world faster. His ambitions will only grow.
Other car companies are already weak. GM has over $100 billion in debt and Ford each have $150 billion in debt. Moody’s rates the Ford debt as junk. Elon will be able to buy more factories from failing car companies.
Fiat was buying $2 billion of zero-emission car credits from Tesla to avoid penalties for their polluting fleet. Tesla seems like they can earn 5-10% of revenue from emission credit sales.
The bigger Tesla is the more other car companies will have to make deals and perhaps license Tesla technology. This means Tesla could get per unit cash on sales of cars that they do not build.
Written By Brian Wang, Nextbigfuture.com. Brian owns shares of Tesla
Brian Wang is a prolific business-oriented writer of emerging and disruptive technologies. He is known for insightful articles that combine business and technical analysis that catches the attention of the general public and is also useful for those in the industries. He is the sole author and writer of nextbigfuture.com, the top online science blog. He is also involved in angel investing and raising funds for breakthrough technology startup companies.
He gave the recent keynote presentation at Monte Jade event with a talk entitled the Future for You. He gave an annual update on molecular nanotechnology at Singularity University on nanotechnology, gave a TEDX talk on energy, and advises USC ASTE 527 (advanced space projects program). He has been interviewed for radio, professional organizations. podcasts and corporate events. He was recently interviewed by the radio program Steel on Steel on satellites and high altitude balloons that will track all movement in many parts of the USA.
He fundraises for various high impact technology companies and has worked in computer technology, insurance, healthcare and with corporate finance.
He has substantial familiarity with a broad range of breakthrough technologies like age reversal and antiaging, quantum computers, artificial intelligence, ocean tech, agtech, nuclear fission, advanced nuclear fission, space propulsion, satellites, imaging, molecular nanotechnology, biotechnology, medicine, blockchain, crypto and many other areas.
Disclosure: Brian has articles that give stock advice.
Brian owns the Nasdaq index with funds and ETF, owns SP index, owns Tesla, Netflix, Amazon, Cisco, Alibaba, Editas, other international funds. He could easily lay more position on Tesla and big tech (amazon, apple, google, microsoft, nvidia etc…). He owns SpaceX and invest and fundraise for startups. He is also involved in various startups as a co-founder and advisor. He may also trade options.