I believe Tesla will give a
range of 475K to 525K as guidance very similar to how they did it for 2019.
I expect Tesla to continue to give limited guidance. I'd be surprised if we hear anything more than that 2020 guidance remains unchanged.
FWIW, I'm only slightly more bearish than I was at the start of the year.
Negative developments in 2020 so far
- COVID-19 is impacting Q2 production negatively.
- COVID-19 will likely impact Q3 and Q4 demand for Model S and X negatively.
- COVID-19 will likely impact Q3 and Q4 demand for Fremont made Model 3 negatively, but Tesla was supply constrained before, so it remains to be seen whether demand will be impacted enough for that to change.
Positive developments in 2020 so far
- Giga Shanghai is ramping up faster than I think even most bulls expected. It's certainly ramping faster than I expected. I didn't expect them to reach 5k/week until later in the year, but it's looking like they'll easily achieve it before the end of Q2.
- The execution at Giga Shanghai gives more confidence for a swift Model Y ramp.
I was expecting 570k-650k deliveries for the year at the start of 2020. Now I'm expecting 550k-650k deliveries for the year.
Bear case:
Q1: 88.4k
Q2: 8k S+X, 40k 3 Fremont, 45k 3 Shanghai, 6k Y = 99k
Q3: 12.5k S+X, 65k 3 Fremont, 65k 3 Shanghai, 25k Y = 167.5k
Q4: 15k S+X, 65k 3 Fremont, 65k 3 Shanghai, 50k Y = 195k
Total: 549.9k
Bull case:
Q1: 88.4k
Q2: 10.5k S+X, 50k 3 Fremont, 50k 3 Shanghai, 11.5k Y = 122k
Q3: 17.5k S+X, 87.5k 3 Fremont, 65k 3 Shanghai, 35k Y = 205k
Q4: 20k S+X, 87.5k 3 Fremont, 65k 3 Shanghai, 65k Y = 237.5k
Total: 652.9k
- I don't see any way in which Tesla could be demand constrained for Model Y this year, or even next year to be honest. SUV/CUV is a much larger segment than the Model 3, and there's at least some pent-up demand.
- Based on numbers and reports coming out of China, I think it's safe to say Shanghai is producing at a rate of 3k/week. Considering how fast they got there, I'd be surprised if they don't reach 5k per week by the end of May, probably earlier. If 5 weeks of production @ 5k/week and 8 weeks of production at 3.5k avg/week, that'd be 53k vehicles produced in Q2 in Shanghai. There'll probably some in transit at the end of the quarter, but 45k seems plenty conservative to me.
- Although we don't have hard proof, it really seems like demand in China is also no problem for the foreseeable future. I wouldn't be surprised if Tesla needs a 2nd Gigafactory in the country before it'll see any demand issues.
- Non-China demand for the Model 3 after the various economies reopen is the biggest unknown. 65k/month would be an about 25% reduction from Tesla's previous run rate, but Tesla was supply constrained before, so 65k/month could be as much as a 30% or 35% reduction in demand. If somebody wants to be more bearish on those, I could see that, but I'm sticking with 65k for my bear case.