Tesla had 16% of its revenue from its non-car business in the third quarter of 2020. This might have increased to 20% in Q4 of 2020.
Tesla should be proving the ramp of car production to about 4 million cars by 2024.
2020 500,000 cars2021e 850,000-1M cars2022e 1.5M-2.0M cars2023e 2.2-3M cars (Fremont 750K, 1M China, 500k Texas, 500k Berlin, 250K next factory)2024e 3.5-4.5M cars (Fremont 800k, 1.0M China. 1M Texas, 1M Berlin, 500k next factory)2025e 4.5-6.5M cars
4.5M cars/year at $40K avg price in 2024 would be $180 billionIf this was at a 25% margin. This would be $45 billion gross margin.
The ASP (average selling price) for FSD is $8,500 in 2020 with an attach rate of 35%. (per Loup Ventures).
As FSD gets closer to full autonomy and users find it more valuable, the attach rate will increase, as well as the price.2020e 35% attach rate and $8500 ASP (If 80% margin for 500,000 cars, $1.5 billion in rev and $1.2 billion in gross margin)2021e 37.5% attach rate and $10,000 ASP, (If 80% margin for 1M cars, $3.75 billion in rev and $3.0 billion in gross margin)2022e 40% attach rate and $11,000 ASP, (If 80% margin for 2M cars, $8.8 billion in rev and $7.7 billion in gross margin)2023e 43% attach rate and $12,000 ASP, (If 80% margin for 3M cars, $15.5 billion in rev and $12.4 billion in gross margin)2024e 46% attach rate and $13,000 ASP, (If 80% margin for 4.5M cars, $27 billion in rev and $24.5 billion in gross margin)2025e 50% attach rate and $15,000 ASP, (If 80% margin for 6.5M cars, $49 billion in rev and $39 billion in gross margin)
Tesla will also have monthly subscriptions version of FSD and lesser versions of FSD. So the people who do not have full self driving will likely not be buying a Tesla that had no version of autopilot. This would boost the autonomy software sales by another 15-30%.
Car insurance is at $4-5K per year. If we assume that half of all Tesla buyers buy Tesla insurance and they make 50% margin. Insurance accumulates because all the existing cars would renew their insurance.2021e 50% attach rate and $5,000 ASP, (If 50% margin for 1M new cars+ 1M old cars, $5 billion in rev and $2.5 billion in gross margin)2022e 50% attach rate and $5,000 ASP, (If 50% margin for 2M cars+2M old cars, $10 billion in rev and $5 billion in gross margin)2023e 50% attach rate and $5,000 ASP, (If 50% margin for 3M cars+ 4M old, $17.5 billion in rev and $8.8 billion in gross margin)2024e 50% attach rate and $5,000 ASP, (If 50% margin for 4.5M cars+7M old cars, $29 billion in rev and $14.5 billion in gross margin)2025e 50% attach rate and $5,000 ASP, (If 50% margin for 6.5M cars+11.5 M old cars, $45 billion in rev and $22.5 billion in gross margin)
Tesla would have precise real-time data for every driver and car. They will be able to precisely offer the correct price for insurance. Tesla cars are ten times safer than regular cars because of the autopilot. Tesla cars could become 20 or 100 times safer in terms of accident per miles. The Tesla insurance could increase to 80-95% of Tesla buyers and the margin could increase on the insurance. This would make it two to four times larger profit from insurance.
2024e 90% attach rate and $5,000 ASP, (If 80% margin for 4.5M cars+7M old cars, $52 billion in rev and $41 billion in gross margin)2025e 90% attach rate and $5,000 ASP, (If 80% margin for 6.5M cars+11.5 M old cars, $65 billion in rev and $52 billion in gross margin)
Tesla will also have sales of games, communication and other entertainment.
The solar and batteries could also ramp to very significant levels by 2024. Perhaps 20-40% of revenue. I will look at a more precise forecast later.
So by 2024, Tesla could making $45 billion margin on car hardware sales and $39billion to $65 billion on autopilot FSD and Insurance and another $9-18 billion on solar, batteries and energy.
SOURCES- Brian Wang analysis, Tesla data, Loup VenturesWritten by Brian Wang, Nextbigfuture.com (Brian has shares of Tesla)
