Production capability is really not the bottleneck. Sales are the bottleneck. If they started selling so many cars that production could not keep up, then it would be easy to raise the capital to expand production capacity. If they sold so many cars that the Freemont plant was too small, they'd be able to raise the money to buy another plant, based on such high consumer demand.
No. The hurdle is changing the way people think about transportation, so that they see EVs as being practical, and then designing and building an EV that people can afford.
Note: I consider EVs eminently practical. Most people do not yet. So when calculating the value of Tesla, plant capacity is not the most important factor. Public attitudes and the cost of EVs (which means, largely, the cost of batteries) vs. the cost of gas cars (which means largely the cost of gasoline) are what matters. I'm bullish on Tesla. But the changes that have to happen will happen gradually. I think 5% to 10% growth per year in stock price is a reasonable expectation.
Note also that expensive gasoline and expensive batteries gives the economic advantage to gasoline even if the lifetime cost of ownership is lower for the EV, because many people cannot afford the high initial capital cost and the attendant interest payments. Many people will accept a higher total cost if the cash flow is lower: I.e. if the cost of gasoline is less than the interest payments on the higher purchase price. This is why it costs more to live if you are poor, since you are forced into lifestyle choices that are cheaper up front even though more expensive in the long run. This is an important issue for the widespread acceptance of EVs as long as batteries are expensive. And Tesla will have to get the annual maintenance cost well below $600!
I agree in most part but... The one thing you under estimate is demand.
I did the economics for taxi drivers in my city alone, Montréal.
They drive about 300 kilometers/day wich is about $42/day in gas alone. $42 * 300 days = $12600 - cost of electicity of $1200 = savings of $11400/year
That is without counting maintenance savings.
So, $11400 * 5 year = $57000 that magic number is the price of the model S (40kw they don't need a bigger battery)
So, when these guy hear about free cars, what do you think will be the outcome?
In Montreal alone, we have 10000 taxis and we have a small city.
And what about police cars?
I am very bullish on demand, economics are always rigth. My big question was supply and Mr Passin answered that question.
Edit: In this article: Hybrids prove very reliable | British Columbia they have taxis riding along for 160k km / year. With that number, model S would pay for itself in just about two years. It's not free, it makes money.
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