Tesla’s latest model, which might be built on a third generation platform, paves the strategy to $400 billion in auto revenues in 2030, says Latest Street Research. The firm believes the brand new model is critical to Tesla’s continued success.
In anticipation of Tesla Investor Day, managing partner at Latest Street Research Pierre Ferragu shared the firm’s expectations for a significant announcement to be made on the event. He said Tesla’s latest model is critical to the corporate’s continued success and offered an summary of how they see it and its impact on the event of the manufacturer.
Latest Street Research expects the brand new model to be 15% shorter, 30% lighter, and have a 25% smaller battery than the present Model 3. The firm checked out comparisons between compact ICE cars and midsize ICE sedans and extrapolated the comparison between the Model 3 and midsize ICE sedans to reach at that conclusion.
We expect Model 2 15% shorter, 30% lighter and 25% smaller battery than Model 3. We checked out how ICE compacts compare to mid-size ICE sedans and extrapolated the comparison between Model 3 and ICE mid-size sedans to achieve this conclusion. pic.twitter.com/csDfINpBik
— Pierre Ferragu (@p_ferragu) February 27, 2023
The firm expects the brand new model to be 37% cheaper to provide than Model 3. Half of that difference might be directly attributable to the automobile’s smaller size, while the opposite half might be mainly resulting from innovations in design, architecture, and manufacturing. The analyst writes that this translates right into a $21,600 COGS (cost of products sold) at scale, including the complete FSD hardware installed within the vehicle.
Lower cost, FSD support, and superior range and performance will give Tesla’s latest model an edge over Toyota Corolla. It is going to be just like the advantage Model 3 has over Honda Accord now. It also means a gross margin of over 20% in comparison with the mid-single digits for Corolla.
Subsequently, Tesla will give you the chance to take care of gross margins of 30% for cars, with each the brand new model and FSD increasing in the combination. Latest Street Research expects the brand new model to cost $25,000, as announced at Battery Day 2020. Which means that the brand new model will cover 80% of the automotive market and permit Tesla to exceed 12 million vehicles and $400B in auto revenues in 2030.
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