LONG POST โ๏ธ but, hopefully, ENLIGHTING. ๐๐๐
As @elonmusk said, THE goal of the new Tesla platform is to reduce 50% of the current average production cost.
When that was stated, Tesla was planning to build a new 5 Bln factory in Mexico. Various reasons determined a change of plans:
โข saving 5 Bln when thereโs plenty of factory space (and expansion area) at Austin.
โข saving the construction time and the related headaches, when all it matters is getting to production as fast as possible, to get the highest slice possible of the IRA incentives ($7,500 for the customer plus $5,500 for the โAmerican madeโ batteries).
โข R&D (Research & Development) of the car and of the production lines is being made in/house by the most efficient and innovative engineering team in the car industry, instead of a leap of faith for a future โMexicanโ solution (it will come later, though).
โข Teslaโs battery partners slowed down their investment plans abroad, prioritising (for now) the richer markets, so they will first build new factories in the US, Europe and Japan, before investing in other areas with a still uncertain potential. All this was driven by the pandemic, the wars, the political and commercial tensions which, in the end, define the economic playground, as a chess table.
โข Teslaโs Lithium refinery is in Texas and their batteries will be produced in Nevada and at Austin with a staggering 4X increment of the actual lines. ALSO, they will considerably speed up as they get perfected, and #Tesla might start using the silicone-graphene and CATLโs licensed MP3 tech for iron-chemistry (standard range) batteries, all in the new form factor (the 4680). Panasonic and other partners will follow Tesla and boost their battery production in the US and in the โadmittedโ countries, to get the $5,500 incentive on the final product (the car).
โข The first market, with a >> 50% market share is the US and Tesla will have even less โcompetitionโ in the compact car segment as NOBODY will be able to mass produce and sell in the US a new high-tech EV in that price range. The dominance will be absolute: no need of price reductions. Thatโs WHY they will build it in the US first. BUT thereโs MUCH MORE: The deploy of the Tesla BOT in the factories will take to ZERO the advantage of building cars in low labour cost countries. The strategic decisions will be based on: - market potential (and incentives) - supply chain - logistics - not hostile political and social environment. That said, and for those same reasons, Tesla will have no need to slash down the selling price of the new car: โข It will have a sticker price of ~27,250 USD, and a production cost of ~18,000 USD.
โข It will cost ~19,750$ to the customer.
The FUN (๐ค) part is that Tesla will margin 9,250$ on it, PLUS the 5,500$ โbatteryโ incentive, for a staggering total of 14,750$, OR +82%. !!!! ๐ตโ๐ซ๐ตโ๐ซ๐ตโ๐ซ
THIS is MIND-BLOWING economics: IF SO, including the Bot and the robotaxis, all to hit the market in the same financial-economic โWAVEโ, there is NO reason for the $TSLA stock price to 10X within 2027-2028 and keep growing, as the vehicle variants on the same platform and new factories around the world start cranking them out.
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TESLA holder and trader. Economics and tech studies, writer, traveller and chef for passion. FREE in SouthAmerica ๐
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ZnWC : The current situation is similar to last year January when Tesla share price hit an all time low of 100 USD. At the time Elon Musk just finished selling Tesla shares to buy Twitter now known as X.com, inflation was at an all time high, Fed rate hike had just started, Shanghai Gigafactory stopped production due to COVID-19 restrictions etc. Market sentiment is against the company; Tesla bears were shouting that the share will dip further in the next few days.
Elon Musk and his team used innovation to manage operation cost and take full advantage of the 7,500 USD EV tax credit. Most analysts downgraded Tesla stock except Cathie Wood who bought in more shares. The share price rose 134% YTD and hit 300 USD in July.