Tesla Model 3 Could Change the World: A Cost of Ownership Study
Over the next 10 years the Model 3’s value, in combination with its technology, has the potential to change the world and accelerate the adoption of electric and autonomous vehicles. This should propel shares of TSLA higher and, more importantly, advance us to a new paradigm in transportation, car ownership, ride hailing, city development, and energy usage. We believe we will eventually look back at the launch of the Model 3 and compare it to the iPhone, which proved to be the catalyst for the shift to mobile computing.
Model 3 Cost of Ownership Estimate Lower Than Expected. Loup Ventures did an analysis of Tesla’s Model 3 total cost of ownership and the results surprised us: Owning a Model 3 is only 13% more expensive than owning a Toyota Camry over a 5 year period. Note that our analysis assumes no state or federal EV tax credits, given that we expect those incentives to end before Dec. 2020. Consensus thinking is the Model 3 expanded Tesla’s addressable market from about 1 million cars a year to 4 million cars a year. However, based on our cost of ownership work, we believe the Model 3 expands Tesla’s addressable market to about 11m vehicles per year in North America alone.
Tesla's Market Opportunity. If Tesla captures 25% of this 11 million vehicle addressable market by 2025, the company would generate $105 billion in annual revenue from the Model 3 alone. It will likely take a few years for Tesla to ramp production; we see 2019 as the first year the company will tap into this broader market. Using the Street’s $20 billion revenue estimate as a starting point in 2018, and growing that to $105 billion in 2025 (from the Model 3 only) implies a 27% average annual growth rate for revenue from 2018-2025.
http://loupventures.com/model-3-could-change-the-world-a-cost-of-ownership-study/
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