Interview Synopsis

Tesla in 2020 – Model Y & CAPEX challenges

  • Multi Asset
  • Industrials
  • North America

Amid Model Y starting production this year and coronavirus-induced uncertainty in the industry, Third Bridge Forum sat down with a former director from Tesla to understand more about what the company’s future holds.

Cybertrucks, CUVs and constructing Berlin Gigafactory: what’s new for Tesla in 2020?

The Interview started off with an overview of the operating environment and main trends. The Cybertruck was among the topics highlighted, with the specialist commenting that it “is one of those things that either Elon [Musk] has gotten it right and people will love this thing, or it is such a departure from what else is out there that they’re not going to convert a bunch of orders.” Although the Cybertruck has received a lot of interest, “it’s a really, really large bet” and “the penalty for being wrong is quite high”.

The conversation moved to Tesla’s different models. The latest to hit production is Model Y, a compact sports utility vehicle (CUV). “Anecdotally, the CUV market is much bigger than the sedan market right now, certainly in the US, and so I’d be interested to see, what does Elon  do as he sells every Model Y he can, but Model 3 demand starts to drop?”

Model 3’s output is being ramped up. When questioned whether it could cannibalise S and X, which are higher margin, the specialist noted that “they seem to be much different cars”. The company’s philosophy was also referenced: “the more product that gets into the consumers’ hands means that their friends and family and coworkers will also buy Tesla products… even though the margin is lower on 3 and Y, [Elon’s] okay with getting more of them in the hands of consumers, because it usually leads to friends and family sales.”

Other items on the agenda include Elon Musk’s management style, the computing power of Tesla’s chips, and the new Gigafactory in Berlin, as well as comparisons with its Shanghai counterpart.

To access all the human insights from Third Bridge’s Tesla in 2020 – Model Y & CAPEX Challenges Interview, click here to view the full transcript.

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The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.

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