The demand for Tesla vehicles continues to grow rapidly, and the company's most important goal for 2021 is to increase production as quickly as possible, according to Loup Ventures. At the same time, traditional automakers will have to either restructure or go out of business.
Analyzing the number of Tesla deliveries, Gene Munster of Loup Ventures states that: "Tesla delivery growth is accelerating. December quarter deliveries were 61% y/y, compared to 44% in September 2020 and 23% in December 2019."
Munster is confident that Tesla is producing what consumers passionately want, so the company needs to make every effort to increase production capacity. To meet this demand, Tesla needs to rapidly build new factories in Austin, Texas, and Brandenburg, Germany. He stresses that ramping up production will be one of the most important topics for Tesla in 2021, along with the status of Full Self-Driving (FSD).
Loup Ventures expects that Tesla's y/y delivery growth rates in 2021 will likely be closer to 40%. This means the company will be ramping up deliveries 4-5 times faster than most car companies. The firm believes Tesla is in the best position of any automaker to take the lead in the global electric vehicle market over the next decade.
Munster writes that traditional automakers have two options:
Option 1: Release a car with features and range at parity with a Tesla, and sell it at cost. This car will be priced 10-25% higher than a comparable Tesla, thereby softening demand and leading to further market share loss.
Option 2: Subsidize vehicles in order to gain market share from Tesla. With a limited margin cushion, this will increase losses. The more they sell, the more money they lose.
Loup Ventures concludes that, if this is taken to its logical conclusion, car companies that have been in existence for more than 50 years will eventually (in 10 years) be forced to restructure or go out of business.
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About the Author
Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.