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A Model Y Leaves Giga Shanghai Every 38 Seconds
A Model Y every 38 seconds is 1.5789 per minute, which is 94.7 per hour, which is 2,273.6 per day, which is 829,894 Model Y vehicles per year. That appears to be the current run rate of Model Y production in Giga Shanghai. Of course, the factory isn't up 100% of the time, but we can use 80% uptime. We also think this is only going to increase. At 80% uptime, we get 663,915 Model Y vehicles per year.
In China, a base Model Y costs about $43,962 and a performance Model Y costs $60,740. We know that the base model is going to sell more than the performance model, let's call it 80/20. We also know that in China, the margin on vehicles is about 30%. Let's take a look at revenue and profit numbers.
The revenue and profit for a year could go something like this:
- Base Model Y: $43,962 * 531,132 = $23,349,624,984 in total revenue (about $32.35 billion)
- Performance Model Y: $60,740 * 66,576 = $8,065,239,420 in total revenue (about $8 billion)
When we add up the revenue, we get $31,414,864,404 in total revenue (about $31.4 billion). Apply the 30% gross margin and you get $9,424,459,321 (about $9.42 billion in profit). This is JUST from Giga Shanghai. If you take this number and divide by 4, you get $2.36 gross profit for a quarter and $7.85 billion in revenue for a quarter.
What Does This Mean For Tesla Stock?
To see what this means for Tesla stock, we need to see how much these Model Y vehicles make of Tesla's overall revenue and profit numbers. If we look at Tesla's latest shareholder deck, for Q3, 2021, we see the following (ttm = trailing twelve months):
- $46,848 billion in ttm revenue
- $10,825 billion in ttm gross profit
We know these numbers will increase most likely for Q4, 2021, but for now, this is the best we have to work with. The Model Y in china currently accounts for 67% of Tesla's overall revenue and 87% of Tesla's overall gross profit. Wow! However, we have to keep in mind Q4, 2021 isn't factored in and these percentages are probably not this high now.
These are significant numbers. It means that China really matters for Tesla. It also means that Giga Berlin and Giga Texas are likely to produce similar numbers. I would not be surprised to see in 2023, a run rate of 600,000 or more for Model Y vehicles from Giga Texas and Giga Berlin each. This is going to significantly boost Tesla's revenue and profit.
The impact to Tesla stock is that Giga Shanghai represents more likely 60 percent of Tesla's overall business - for just the Model Y. If we were to include the model 3, I think we'd see this go over 70%. Giga Shanghai is absolutely critical for Tesla's business. And we also know that the 38 seconds isn't probably an exact science. It could be 45 seconds sometimes or even 60 seconds.
This means that Tesla stock has a lot of room to grow. I see Tesla getting to $1,500 a share or more in 2022 based on the growth of Fremont, Giga Shanghai, and the two new Giga factories in Berlin and Texas. It's going to be an exciting year!
Do you think Tesla will continue to increase the Model Y rate from Giga Shanghai? Will the Model Y be the best selling vehicle ever?
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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.
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