Alright, now that I've had a night to sleep on it, I'll share my thoughts on Sal's 2019 forecast.
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Really Big Excellent Post
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I'm late to the party thanks to spending the last couple of weeks off the grid, camping and hiking in Zion -
And the Grand Canyon -
(Yes, this landscape porn is clearly OT, but all you haters can just keep on hating.. :wink
My only addition to DaveT's takedown of this analysis would be to emphasize the major production barriers to Tesla achieving the kinds of numbers that Sal is talking about.
Battery production constraints in particular, have been covered in the discussion in the Cost/kWh thread, which I believe began here -
And we also know that Tesla is also working with Samsung as an alternate supplier. With all of this activity, Tesla is certain to take over an increasingly large share of the 18650 market, and they will do so as other players are exiting the market, allowing Tesla to purchase batteries from existing plants whose costs have already been fully amortized. In the long term though, GENIII requirements will substantially outstrip existing production capacity (which I estimate is enough to supply ~120,000 Model S class batteries if you use a nextgen cell with 4.0mAh).
So we'll get a sense of Tesla GENIII sales expectations in a year or two when the major battery manufacturers start announcing additional production capacity to support it. A likely doubling or tripling of global cylindrical battery production is not the sort of thing that will fly under the radar.
Fundamentally this also goes to the commentary that Dave had regarding costs. We are now talking about the need for billion dollar+ investments in new battery production, and the possibility of large scale M&A on the part of Tesla to aquire the production capacity and expertise to create sufficient liION production capacity just to support Gen III.
I am skeptical that Tesla can get all of their production ducks in a row to assure sufficient battery supplies to allow them to even max out the production capacity of NUMMI by 2017/18. Not when we are already seeing evidence that Tesla will have soaked up all of the available 18650 production capacity in the 2014-2015 timeframe (ie, before Model X production even really gets rolling) and will be in scramble mode to secure battery supplies sufficient to cover the full ramp-up of the S platform, let alone a Gen III rollout.
Sure, it CAN happen, but to do it Tesla will need to throw a lot more resources at the problem than they were even thinking 4 months ago. The last secondary gave them the resources to get to Gen III when they were assuming 40k total sales/year on the S platform (which was the assumption after Q1). Now that they seriously need to plan for the possibility of 100k annual sales of the S platform in the next few years, those assumptions are no longer valid, and they are now facing a potential shortage of capital, and the need for long lead times to ramp up battery production.
I don't think Sal is sufficiently accounting for these very real financial and logistical constraints, and it'll very difficult to model the path forward until Tesla puts a real plan in place to address this, and secures the capital needed to move forward. Based on current known resources and planning, my own models point to zero Gen III production in 2017, and probably 2018 as well.
If we don't see a major secondary (or other move) that is devoted to battery production, or else if we don't see major producers commit to tripling global capacity on their own hook (which I am skeptical they will do) within the next year, I expect to see the Gen III release date start to get pushed back as Tesla continues to focus on fully exploiting the S platform (which will require a major increase in global battery capacity all on its own).
