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My thoughts on GF3 Model 3 and $TSLA& #39;s future plans for the Asia-Pacific region THREAD
The Chinese market consumed 2.8M luxury cars in 2019, and the segment has been growing between 7-8% annually. Approximately 40% of this market can be served by the Model 3.
My thoughts on GF3 Model 3 and $TSLA& #39;s future plans for the Asia-Pacific region THREAD
The Chinese market consumed 2.8M luxury cars in 2019, and the segment has been growing between 7-8% annually. Approximately 40% of this market can be served by the Model 3.
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Taking $TSLA& #39;s M3 2019 US market share and applying it to China yields a yearly demand of about 250k M3& #39;s/yr. This demand can grow if $TSLA can get a higher share of the market, or if the market keeps growing as it has in the past.
Taking $TSLA& #39;s M3 2019 US market share and applying it to China yields a yearly demand of about 250k M3& #39;s/yr. This demand can grow if $TSLA can get a higher share of the market, or if the market keeps growing as it has in the past.
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Another important consideration is that China& #39;s market is big enough to support many varieties of the Model 3. Currently, only the SR+ and LR RWD variants are MiC. Performance is next. I believe $TSLA will also start to make the AWD LR M3 variant in China in 2021.
Another important consideration is that China& #39;s market is big enough to support many varieties of the Model 3. Currently, only the SR+ and LR RWD variants are MiC. Performance is next. I believe $TSLA will also start to make the AWD LR M3 variant in China in 2021.
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Back to production. Let& #39;s start with 250K/yr. This would require a sustained production of around 5.5k Model 3& #39;s per week at 48 weeks/yr.
Fremont& #39;s best quarter for Model 3 production was 6.6k/week (Q419). However, we know that the Fremont factory is not optimal.
Back to production. Let& #39;s start with 250K/yr. This would require a sustained production of around 5.5k Model 3& #39;s per week at 48 weeks/yr.
Fremont& #39;s best quarter for Model 3 production was 6.6k/week (Q419). However, we know that the Fremont factory is not optimal.
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GF3 was designed in a much more streamlined way that should support much higher capacity.
6.6k/week is therefore conservative. GF3& #39;s M3 max capacity is probably 8-10k/week. Let& #39;s use the low end to be conservative.
GF3 was designed in a much more streamlined way that should support much higher capacity.
6.6k/week is therefore conservative. GF3& #39;s M3 max capacity is probably 8-10k/week. Let& #39;s use the low end to be conservative.
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At 8k M3& #39;s produced/week, GF3 has excess M3 production of 2.5k/week. Where do these units go? IMO, GF3 will service the Asia Pacific region once Chinese demand is served.
At 8k M3& #39;s produced/week, GF3 has excess M3 production of 2.5k/week. Where do these units go? IMO, GF3 will service the Asia Pacific region once Chinese demand is served.
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When will this happen? GF3 aims to hit 4k/week sustained production in June 2020. To get to 8k/week, we are probably looking at at least another 6-8 months. My best estimate is Q1-Q2 2021. The implications of this are very important and a big part of my bull thesis for $TSLA:
When will this happen? GF3 aims to hit 4k/week sustained production in June 2020. To get to 8k/week, we are probably looking at at least another 6-8 months. My best estimate is Q1-Q2 2021. The implications of this are very important and a big part of my bull thesis for $TSLA:
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Simplified logistics and faster time to market. No longer will $TSLA need to send RoRo ships from Fremont to Asia. This will both de-risk/simplify the logistics for $TSLA, and free up Fremont M3 capacity so that Fremont can focus on NA and Europe.
Simplified logistics and faster time to market. No longer will $TSLA need to send RoRo ships from Fremont to Asia. This will both de-risk/simplify the logistics for $TSLA, and free up Fremont M3 capacity so that Fremont can focus on NA and Europe.
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This will be key as GF4 will initially build Model Y, not Model 3.
Profit. It& #39;s clear that when GF3& #39;s supply chain is fully sourced from the domestic market, $TSLA will be able to unlock the full benefit of scale and cost reduction.
This will be key as GF4 will initially build Model Y, not Model 3.
Profit. It& #39;s clear that when GF3& #39;s supply chain is fully sourced from the domestic market, $TSLA will be able to unlock the full benefit of scale and cost reduction.
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Tesla MiC Model 3& #39;s will cost significantly less to manufacture than those from Fremont.
So what& #39;s next? Here are my predictions:
- Late Q3 or early Q4 2020 production start of MiC Performance M3 at GF3.
- Q1 or early Q2 2021 launch of AWD LR M3.
Tesla MiC Model 3& #39;s will cost significantly less to manufacture than those from Fremont.
So what& #39;s next? Here are my predictions:
- Late Q3 or early Q4 2020 production start of MiC Performance M3 at GF3.
- Q1 or early Q2 2021 launch of AWD LR M3.
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Take this same timeline and logic and push it out 1 year = this is what Tesla will do for Model Y, too. Organic Model Y demand in China is around 350k/yr.
Once $TSLA has advanced the Model 3 and Model Y projects, look out for the GF3 Model 2 in 2022.
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Take this same timeline and logic and push it out 1 year = this is what Tesla will do for Model Y, too. Organic Model Y demand in China is around 350k/yr.
Once $TSLA has advanced the Model 3 and Model Y projects, look out for the GF3 Model 2 in 2022.
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