Elon Musk: Tesla Model 3 Could Generate $20 Billion In Annual Revenue

JUL 27 2016 BY ERIC LOVEDAY 29

Model 3 With Tweaked Front Fascia

Model 3 With Tweaked Front Fascia

tweetDuring the press events ahead of the official Gigafactory grand opening celebration, Tesla CEO Elon Musk told reports that the Model 3 could generate upwards of $20 billion in annual revenue with a gross profit of approximately $5 billion.

Additionally, Musk stated the following:

“Things are on track to be able to meet the Model 3 cell production timing in the middle of next year.”

This comment leads us to believe that the Model 3 is on track for its late 2017 launch.

According to Musk, work has been non stop at the Gigafactory, which eventually will be able to pump out enough battery cells for up to 1.5 million car annually, or 3 times the amount he had previously stated.

As for completion, the Gigafactory size currently stands at 1.9 million square feet. Its completed size will be close to 10 million square feet.

Musk commented on Tesla’s Powerwall and Powerpack side of the business as well:

“The growth in stationary storage is really under-appreciated. That is a super-exponential growth rate.”

Musk concluded by stating that eventually Tesla will likely have a gigafactory on every continent where Teslas are sold. So that would be up to 6 (or 5) depending on which list of continents you choose to follow.

Source: CNBC

Categories: Tesla

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29 Comments on "Elon Musk: Tesla Model 3 Could Generate $20 Billion In Annual Revenue"

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ok, so according to musk, tesla is going to introduce a car, the telsa model 3, which is priced like a benz c-class or 3-series bm, and the model 3 will have more sales than do the c-class and 3-series combined.

at present, tesla has a presence in at least 5 continents, but i don’t know whether tesla has opened an office in south america yet. i don’t expect that tesla will ever open an operation in antartica.

500 000 cars * 42 000$ (stated as target ASP for model 3) = 20 bilions $.

So they do not aim that high. IIRC BMW 3 have 300 000 sales on its own.

I believe the Model 3 will also eat into Camry, Accord, Sonata, Altima and Fusion sales, since they cost close to $35k loaded.

That was 1.4 million cars sold in 2015, in the US alone.

“I believe the Model 3 will also eat into Camry, Accord, Sonata, Altima and Fusion sales, since they cost close to $35k loaded.”

Not if you can’t fit inside of the Model 3 like Camry or Accord.

Those cars have similar interior passenger volume like Model S.

Unless Model 3 is going to be larger than Model 3, I don’t see that happening.

Also, your claimed price are MSRP for a fully loaded Camry/Accord. The base Accord/Camry is around $22K.

assuming that you are referring to single year sales, from the figures that i have seen 3-series bm sales are less than half of what you have stated. benz c-class sales are greater than those of the 3-series bm.

About 500 000 BMW 3-series are sold yearly.

Did you think Elon just picked a random number when he wanted to do 500k vehicles and 400k of them being Model 3’s? No, he is aiming for the leader. 500k is the benchmark for a single luxury model.

Next big benchmark after that will be to match the 2 million total BMW sales as the largest luxury manufacturer.

the sales figures that i got from left-lane.com were for europe only (left lane considers only US, europe and china). but worldwide benz c-class and bmw 3-series sales were apparently about 500,000 units each in 2015.

“at present, tesla has a presence in at least 5 continents” What 5 continents would that be? Looking at Tesla’s website they are only present in 3-4 continents: 1) North America 2) Europe 3) Asia/Pacific [That’s they way Tesla list it as one continent, and I doubt there will be a separate Gigafactory in the Australian continent with a very low population of 29,127,000, whiich only 0.4 % of the World’s total population [Source: Wikipedia]. Cars and batteries will probably be manufactured in nearby China. There will not be any factories in Africa and South America any time soon either, as Tesla is not even present in those continents. So I don’t get why the article says up to 5-6 factories. Every continent where Teslas are sold is more like just 3 continents: North America, Europe and Asia/Pacific. Tesla’s complete list over local websites where they are present: North America USA Canada (En) Canada (Fr) México Europe Belgique België Danmark Deutschland France Great Britain Italia Luxembourg Nederland Norge Österreich Schweiz Suisse Svizzera Sverige Suomi Other Europe Asia/Pacific Australia 中国 Hong Kong 香港 日本 Macau 澳門 台灣

earlier this year i read that tesla was opening an office in south africa to sell the powerwall, where south africa is on the continent of africa.

maybe you’re referring to tesla motors cars sales offices, of which there are none on the continent of africa. i counted the continent of africa because musk said that he hoped to open a gigafactory on every continent in which teslas are sold. i did not limit that presence to tesla motors, but maybe that was musk’s intention.

The word “could” is a bit humble. 500,000 cars at an average price of $ 40k is $20 billion. That is from the M3 alone. He already has reservations for 375,000. Add the S and X then add the Power wall etc, then add the solar installation for nearly every car he will sell then it is a truly a Trillion dollar company. Oh and I forgot the trucks, semi trucks and buss. Not to mention the car sharing thing.

A reservation is no sale. A lot of people consider/want a non expensive long range BEV. A lot of people might switch to Leaf 2.0 or Bolt or even VW if they offer a decent product in 2020.

I know plenty of traditional Accord/Camry type owners who ordinarily would not consider a BMW 3-series that are thinking of the Model 3 when it comes out.

So you just never know. It’ll be myopic to view the Model 3 as just eating into the entry level luxury segment.

the reason why they wouldn’t buy a 3-series bm is because they would prefer a benz c-class. mercedes-benz outsells bmw in the US and worldwide.

Any reasonably priced 200+ mile range BEV is a huge plus. But just like the children’s story, The Three Little Pigs, their security was a brick home. With a BEV it is the security of FAST, reliable charging of the BEV while traveling. Hands down, TESLA offers that with their BEV’s. For me, that reliability of fast charging when traveling this country is about the only thing that matters.

Any reasonably priced 200+ mile range BEV is a huge plus. But just like the children’s story, The Three Little Pigs, their security was a brick home. With a BEV it is the security of FAST, reliable charging of the BEV while traveling. Hands down, TESLA offers that with their BEV’s. For me, that reliability of fast charging when traveling this country is about the only thing that matters. — Waiting Yes but at the rate of growth we are seeing with CCS / CHAdeMO chargers in the US by 2020 will that advantage really be there? Right now 2 of Tesla main advantages are both in it charging network. The fact they have attempted to logically layout their locations and the speed of their chargers since they are around 2x the current standard. However by 2020 the 150kw CCS and CHAdeMO standards will be complete and the hardware using it will be rolling out. All indications are it will be at a minimum backwards compatible with the existing standard. The overall network across the US will be much larger and will start to really fill in the gaps. We already see many states getting involved and the Federal Government… Read more »

wow. its three floors not 2. how many gwh?

Build it and they will come.

They just need to get that battery price down and the EV market will explode.

Getting the price further down. That’s the whole point behind building that factory. Nobody else could/wanted to do it. Without Tesla, the prices for Li-in batteries would be still so high that electromobility would not exist. For example, last year (2015), Tesla already realized a price level for cells (150 $/kWh) that was predicted to be achieved around 2025 (!) by the most optimistic analysts back in 2010, when EV cells were priced at 1000$/kWh. Many studies that time doubted that it would go below 200 $/kWh on cell level (ever). The Gigafactory houses multiple cell manufacturing lines and has (besides the size and economy of scale that comes with that) one advantage that no other existing battery factory has and that I have never seen being pointed out so far. It’s in the middle of the freaking desert. The air there is dry as it gets and it almost never rains. If high quality cells with a long lifetime are aspired, Li-ion production requires something called a “dry room”. The humidity in such a dry room is about as low as in the driest deserts of this planet. A significant amount of energy used in the existing battery plants… Read more »

Don’t underestimate Elon Musk…he is THE MAN.

Hmm interesting… on the other Tesla factory post it says I’m logged in as Mark Kane, who I am not. Can’t post anything or “log out”, Just a FYI for the site admins.

Any details you might need you can email me I guess?

If only he said it like Dr. Evil…

Wow I received a thank you note from Elon Musk and drawing of Model 3 for my $1,000 reservation. I can’t wait for model 3.

Wait, that is what they plan to do.

500k/year at $42k each is more than $20Billion.

Why say “up to” now? That is their goal.

“The growth in stationary storage is really under-appreciated. That is a super-exponential growth rate.” ~ Elon Musk We keep hearing how great the power wall sales are going, but last quarter, ending in March of 2016, Tesla only sold 2500 residential power wall units. Assuming a $6,000 turnkey installation price for the residential unit gives us a before costs income of $15 million, and leaves maybe $3-4 million in profit. That’s certainly better than a kick in the teeth, but it’s a country mile from what Musk said about power wall sales: “That is a super-exponential growth rate.” I’m sorry, but modest sales of just 2,500 units in the first quarter is not “a super-exponential growth rate”, as Musk claims. Surely, Musk is referring to future sales, or projected sales, or hoped for sales, not actual sales. For comparison, Sonnen, a German competitor sold 2,600 units in the first quarter 2016 in Europe. Obviously, the business is young and sales will no doubt grow, but Musk implies that Tesla is selling them by the millions and that power wall is a huge money maker for Tesla. I’m a big fan of energy storage, especially for intermittent renewables like wind and… Read more »

I think that after the SolarCity thing, Tesla will have a much bigger market for chargers, Power Wall and Solar panels and maybe inverters. The Germans do not have that.

I would say that if Tesla sells the package of the Solar panels, charger, Power Wall, Inverter to half of the sales of the model 3 S and X then we could be talking about 250,000.

Enough with making projections about the future to make a quick now so you get a tiny bit more credibility when you have to get a loan so every day business keeps going.

This is why the ultimate goal and most pride a company can have is staying private. No one owns your company and you don’t have to answer to anyone beyond the law.

Elon sounds like a foolish marketing salesman trying to make his shareholders happy about the future. Pathetic.

Nothing foolish about Elon Musk…the only fools are those that continue to their fossil fuel addiction.

Which is exactly why Musk proclaimed that SpaceX would not go public.

most corporations prefer loans to issuing stock. the reason being that loans actually end up being less expensive because you don’t have to give up a part of the company to get the cash. as to operating as a privately owned enterprise. unless you are operating a venture like a wall street investment bank or hedge fund, enterprises that generate loads of cash without much capital requirements, a privately owned company can be very constrained in its ability to raise cash. a company like tesla has huge capital expenditure requirements. if you had to operate on a cash basis (as do some small enterprises), your growth would be severely constrained. you can’t pay for a new manufacturing facility by solely relying on the cash that you raise from profits in the current quarter, or even the current year. and you can’t rely solely on loans because your capital structure would get so debt heavy that no bank would lend to you. in such cases, you have to raise funds through equity. but you want to raise that equity before your balance sheet is too debt heavy, because if you wait until you are up to your eyeballs in debt *before*… Read more »