Tesla is going to breakout, and it's going to be before robotaxis and Optimus robots contribute to its business.
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Tesla is going to breakout sooner than you might think, and it's due to existing products that don't include FSD robotaxis or the Optimus robot. Here is what will cause this breakout in the short-term.
Tesla Energy
The first is Tesla's energy business. Tesla sells Megapack (very large battery storage), PowerWall (home-scale battery storage), and solar roof. The main contributor to this will be the Tesla Megapack.
Tesla's Lathrop, CA, factory will produce up to 10,000 Megapacks per year. Tesla is also building a Megapack factory in Shanghai. Expect more Megapack factories to be built over the coming years. Long term, I expect there to be 100,000 Megapacks being built per year, but in the short-term - the next few years - Tesla will reach a minimum of 20,000 Megapacks per year and a bull case of 50,000 per year, building them at new locations in North America and China. Tesla will also likely build Megapack factories somewhere in Europe and India.
Megapacks use LFP (Lithium-Iron-Phosphate) batteries, which are the lowest cost batteries on the market today, reducing Tesla's costs.
At an average price of $1 million per Megapack, expect around $50 billion in revenue per year in the next few years from Megapack, which is already 1/2 of what Tesla is doing today. Megapack is an important product for Tesla and will help transition the world to sustainable energy.
Tesla Semi
The Tesla Semi is Tesla's sleeper product. That means that nobody is expecting it to reach a volume production of 50,000 units per year or more. Right now, Tesla is producing 100s of units of the Tesla Semi, but this is going to change - and quickly, over the next couple of years.
Tesla will start to show Tesla Semi in its quarterly reports. At 50,000 units produced per year, that is an impressive amount. Tesla will build Semis in other locations - Europe - and definitely China. I'd expect two Semi factories in China and with the others, you get it to 50,000 units per year. At the average price of $300,000, that's another $75 billion in revenue - almost what Tesla is doing as an entire business today.
This doesn't include FSD and autonomy for the semi, which will generate much more in the future.
In the next 3 to 4 years, I expect just the Megapack/Energy and Tesla Semi to triple Tesla's revenue. This doesn't include any new vehicles or building more EVs, or even the unveiling of lower cost models or the robotaxi vehicle.
But wait, there's more.
Tesla Cybertruck
The Tesla Cybertruck is ramping nicely, at around 75,000 units per year right now. It's selling for $100,000 or more with current Foundation Series models. However, this truck will get down to $60,000 or so with the lower cost models and the single and dual-motor variants.
Across the western continents, at 500,000 units per year, that's another $35 billion in revenue, adding to Tesla's bottom line.
New Model X
A new Model X that seats 7 people with steer-by-wire and all the latest technological improvements make this a compelling vehicle. You could even increase the size of it and it's a legitimate large vehicle. Sell it for $60,000 a year, and you have a very compelling large and technologically advanced vehicle that can be sold world-wide.
This would greatly increase the units of it being sold. It could sell 500,000 units globally as the market demand for such a large vehicle is there, and that's another $30 billion in revenue for Tesla.
These vehicles would all use 4680 battery cells - or they should. China's vehicles may use a different type of battery. The reason this matters is that 4680 cells are more efficient and cost less, as Tesla makes these batteries themselves instead of getting them from suppliers.
Lower Cost Models
Lower cost models are coming next year - smaller versions of the Model Y and Model 3. Expect these vehicles to sell for around $25,000-$30,000. New advancements in technology and low-cost LFP batteries will be used here.
Expect around 3 million of these to be sold globally per year, adding another $80 billion to Tesla per year.
Tesla Van
A Tesla Van is something I am definitely looking forward to. Especially if it comes without back seats, so I can put a bed, bathroom, and kitchen in it to live.
The global demand for this is around 1 million units per year. Tesla may get 300,000 of that, selling a van for around $50,000 to $60,000. That's another $15 billion per year for Tesla.
Some people think a van will be unveiled at the 10/10 robotaxi event. We'll have to see.
Adding all of these together for Tesla will double or triple its current revenue and profits, and all it is Tesla simply expanding and modifying its existing product line.
I expect these to take Tesla to $500 per share over the next few years. If FSD and autonomy pan out sooner rather than later, that will dwarf all of these products and their contribution to Tesla.
What do you think - will these new product development cause a Tesla breakout?
Thanks Warren Redlich for the inspiration for this article!
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Hi! I'm Jeremy Noel Johnson, and I am a Tesla investor and supporter and own a 2022 Model 3 RWD EV and I don't have range anxiety :). I enjoy bringing you breaking Tesla news as well as anything about Tesla or other EV companies I can find, like Aptera. Other interests of mine are AI, Tesla Energy and the Tesla Bot! You can follow me on X.COM or LinkedIn to stay in touch and follow my Tesla and EV news coverage.
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