What Tesla Delivery Numbers DON'T Say | Stock Projection!

so tesla absolutely crushed delivery

figures but that's not the big

secret that this actually forecasts

folks

let's take a brief look at the tesla

delivery figures

and then we'll touch base on what i

think wall street is really missing

behind these numbers so take a peek at

this here tesla q1 delivery figures we

have zero production for the s and x

that makes sense though because we have

the massive refresh going on with the

snx where we're changing the steering

column to that half wheel we're changing

the dash

for uh the s and x we're basically

making the s and x look like the model

threes wise and the cyber truck

and this is really condensing the amount

of parts the vehicles are expected to

use and have

which makes sense it just makes tesla

more efficient this is one of the

reasons tesla is so good at having such

a high margin remember i personally

believe tesla's margin

is going to settle down around 28 elon

musk thinks they can get their gross

vehicle margin to around 30 percent

and kathy wood in her latest projection

thinks that tesla could get to 40 to 50

gross vehicle margin although she does

include a lot of

automation revenue from robo taxis the

point is

the more streamlined the production the

better and this shutdown in quarter one

of the s x aligns production lines is a

huge investment

in margin growth profit growth for tesla

so so important but what's wall street

missing well there are two things wall

street's missing

one big thing wall street is missing is

first of all the explosive growth of the

s and y is not just happening

but wall street is missing the fact that

tesla fremont and tesla shanghai

are both tooling up and expanding to get

to one

million vehicles produced per year

right now wall street believes these are

just 500 000

vehicle facilities and even though

tesla's talked about their plans to

expand

wall street's been generally bearish on

tesla actually getting to not just these

production figures but having the right

amount of demand for these vehicles

having enough demand for people to

actually want to buy the s

and y without having to wait a long time

for them

well so far tesla has not had a demand

issue tesla has solely had

a production holdback and this

blowout here of tesla beating wall

street's estimate of combined

deliveries of 174 000 by beating it with

184 000 beating it by 10

800 is not just a sign that tesla is

ramping up their s and y production

quickly

which is great obviously wonderful for

the stock uh and the company

but it's also a massive sign that tesla

is on the way to potentially

beating their expectations for the year

now publicly tesla has suggested they

might hit

880 to 900 000 vehicles

but elon musk just in the last few weeks

hinted

that tesla might actually have an

internal target

of 1 million vehicles produced this year

and if tesla can produce 1 million

vehicles this year

and actually deliver 1 million vehicles

this year while still having a wait for

more orders wall street might finally

realize

wow tesla is actually here to stay

because there are still so many tesla

doubters now many of us watching this

might think wait they're tesla doubters

there are

lots of tesla doubters so many tesla

doubters because mostly

people get upset about the current price

to earnings ratios at tesla

but that's again because folks do not

like to build in

future potential growth prospects

because when you look at a normal

company we don't like doing that either

right when a normal company like let's

take a look at like

for example a zoom a zoom might have

this exponential growth during the

pandemic

but we expect that exponential growth to

fall or or not maybe not necessarily

fall

but the rate of that growth too slow

zoom might be

here they might be at that inflection

point with their growth

and people see the same as potentially

true at tesla they're like oh

look tesla you've had a great couple

year run whatever that's it you're

getting ready to turn the corner

it's not worth the multiple people are

paying for you but i think that's where

wall street is so devastatingly wrong

in not realizing that in five years

tesla might be producing and delivering

four to six million vehicles which

really puts tesla

uh at delivering 184 000 this quarter

it really puts tesla right here at the

start

of this s-curve and so when when we hear

people complain

ah but tesla's valuation is so high

it's because folks think the s curve is

coming to an

end when we don't even realize it's just

a beginning

and today's numbers are a big slap in

the face in my opinion

to the tesla doubters and it's not wrong

to say that hey we think tesla's going

to miss i mean i thought tesla was going

to miss as well

they shut down snx production they had a

fire i mean there were lots there were

fewer days in q1 there were lots of

issues in q1 q1 is historically slower

for car sales so it's not wrong to think

or to expect

you know tesla might miss or whatever

but it's wrong in my opinion not to

invest in tesla solely because we

believe oh my gosh but kevin the

valuation is so high based on 2020

price to earnings ratios and multiples

and it's like well

when we look at the future potential of

tesla

it would the biggest mistake in my

opinion is not investing in tesla

there's a reason tesla makes up so much

of my portfolio and it's because

when i project out growth at tesla

relative to really

any other company tesla is so young it's

such a baby

compared to all of the others in fact

let's go ahead and just pull up my tesla

spreadsheet very briefly

look at my tesla numbers one and i'll

give you sort of a little reminder as to

why do i think that uh tesla earnings uh

are are going to be so bullish in the

future so

just a quick little reminder look at

this remember elon's now updated this to

about 1 million i'm at 9.50 i'll leave

mine for a 950 here for deliveries 20

21.

my projection is we should be able to

easily get

to 4.8 million by 2025 and that's

produced

and delivered i i do believe the demand

will be there for the tesla

especially once full self driving comes

out there will be no competition really

for tesla

we want to keep an eye on competition

like lucid and some of the other

companies

just to see who's going to be that

potential number two because there will

always be a very large

and profitable a number or two i always

think android and apple

uh is just sort of our example but

anyway uh if we go with revenue per

vehicle 40k

4.8 million we'll go through this a

little quickly we get to total revenue

of around 235

billion no i'm not including insurance

here robo taxi semis full self driving

i'm basically collapsing all of that

into the revenue per vehicle so i'm in

my opinion i'm being conservative by

doing that

because i'm not including as much

revenue as we could expect you know

bitcoin all of these things i don't i'm

just going to keep this very very simple

we'll throw it in here and we will

include though 10

of vehicle sales towards energy uh and

that's mostly

because the way the way i look at that

is i think a portion of battery

production is going to be carved out for

energy

and to me i think 10 percent going

towards energy regularly is is very

realistic

we'll see 19.2 billion dollars for

energy

that could be a little bullish but we'll

see i do think overall i'm being very

conservative especially with just 40k

revenue per vehicle not even including

again insurance uh

really the semi-bomb robo taxis fsd uh

all of that you collapse all of that in

here i think that's a very conservative

number

we go with margin expense margin of 26

by 2025 they should easily be at that

uh you know 20 28 so let's go and put 72

in here for expense 1 minus is 28

that gives us some other expenses well

these are sort of the expenses we've got

expenses on leases servicings profit

margins

i'm going to bump the tax rate uh not

the full 28

we'll go to like 22 tax deductions and

credits will help get tesla

or help keep that down for tesla uh that

potentially puts

tesla at earnings per share of a round

with a net of 19 billion by the end of

2025

puts them at about an earnings per share

of around 19.5

for the year in 2025 if these

projections are accurate

the price today is uh what somewhere

around 660.

so uh that means we're really only

pricing at 37 times

future uh you know price earnings ratio

we're pricing

today today at 660 we're being priced at

37 times

future earnings per share uh but i

believe that uh this in 2025 will still

just be the beginning

or i wouldn't want to say the beginning

i think s curve wife

wise excuse me we'll probably be pricing

somewhere around

here you know because really i think

we're going to start curving around 10

million vehicles

so 5 million 4.8 million is going to put

us about halfway there

we'll start curving later you know

whether that's 2030 or 2035 that curve

will come

but anywho it wouldn't shock me that

once tesla proves that we're at that 5

million vehicles

that we could easily be pricing at 100

times future earnings

we're not going to stay at 100 times

forever you know once we start curving

and we getting we start getting to that

inflection point

a tesla will mature and we'll start

pricing for 30 to 40 times

in the future but that's maybe when

tesla's doing you know 10 million

vehicles a year potentially as high as

14

15 million vehicles a year beating

toyota

uh and and then we'll be pricing well

and then we'll also know how we get to

price dojo

uh you know the super computers over at

tesla uh

and uh we'll get to see the uh the real

impact of full self driving

but uh yeah at that point in the long

future if we want to start

looking at lower price to earnings

multiples we will probably be at 10 to

14 million vehicles produced and

delivered who knows maybe that's bullish

but if i go with a hundred at sort of a

midpoint of 2025

by the end of 2025 i'm gonna change my

year 2025

i think it would be reasonable and i

honestly i think this is this is

relatively low

it'll be reasonable for tesla to be

worth somewhere around 757

uh and uh that would give you about a

return on your money if you bought tesla

shares today

of around 21.6 now keep in mind

uh kathy believes that this will

actually be closer to

3 300 by the end of 2025

which really gives you a rate of return

over those five years of around 37.9

which is really incredible uh so

obviously uh you know i i wouldn't be

shocked if we

we get to at least the 1700 by 2025

uh but if tesla gets to a million this

year we could end up seeing 1700 much

sooner as the market starts pricing in

more of this growth

there will come a time though i mean if

we hit 1700 by

by the end of 2021 i mean at that point

it starts getting to the point where

you know we got to ask ourselves okay

does it still make sense to invest in

tesla with new money because now we're

just pricing in

so freaking much future growth people

say that about today's price i don't

believe that about today's price

i start getting a little bit more more

nervous when we start approaching a

thousand and a thousand beyond

you know 900 900 plus i mean there it

doesn't matter 100 bucks here there

doesn't matter so much

but yeah those are some of my thoughts

on tesla to me the

earnings today uh or not the earnings

the deliveries today

are not about the deliveries today

they're about what they signal

for the path we're on to get to this

million vehicles produced and delivered

in 2021

and what that means for our trajectory

in 2025.

thanks so much for watching hopefully

this uh helps explain why i'm so bullish

on tesla

and i'm even using conservative numbers

here thank you so much for watching and

folks

we'll see in the next one

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