How close is Tesla (NASDAQ:TSLA) to breaking back to 1 trillion market cap

Saturday, September 10th, 2022

While still about 25% down from its recent high in November in 2021 (closing price of 409.97) , its market cap as at today sits at 931 billion .The question of how soon, if it at all can it hit back to over US 1 trilion is of interest to investors. It has more recently continued momentum with growth markets in other martkets  where Nasdaq:Tesla topped New Zealand EV cars sales in August as well as Tesla becoming Australia's seventh best-selling new-car maker last month which outsold others like Volkswagen and Suburu.

The Good

In its june number its revenue of 6.93B  was 41.61% YOY with Net income at 2.26B with 97.81%. It has more recently has become the safest car in Europe (Euro NCAP) with also a very high rating from Australian safety ratings (ANCAP) due to its lane support and camera based driver monitoring system.  According to the most recent earnings report, Gigafactory Berlin hit the milestone of 1,000 vehicles produced in a single week which until recently, the car factories in Texas and Berlin were losing money due to a shortage of batteries and other supply chain issues.  AlsoTesla US Sales Up 105% Year-Over-Year Doubling Market Share In August. The company recently split shares to make the stock which as made the stock more affordable for retail investors

The Bad

However it is currently reporting issues with its dry coating technique  currently being used to produce bigger cells in its 4680 battery and will find it difficult to fully implement its dry coating manufacturing process perhaps until 2023 (according to Reuters). This process improvement would have would dramatically cut battery costs through the elimination of parts of the manufacturing process  which could haved saved Tesla up to US$5,500 per Model Y battery pack. Renault’s Megane E-Tech is now France’s most popular EV with an estimated 100K/year run rate  as well as Renault is eyeing 2030 as its date to be all-electric and plans to release 11 new EV models between now and 2026. 

The numbers.

Tesla along with its automotive revenue brings in money from regulatory credits and energy storage. The majority of Tesla’s revenue comes from automotive sales. The company delivered almost one million electric vehicles in 2021, and it projects to reach 1.5 million cars delivered in 2022.  It generated about $344 million in automotive regulatory credits revenue during the second quarter of 2022 but revenue from energy generation and storage was $2.78 billion with costs of $2.91 billion, leading to a $129 million loss in this sector. The conversion of Bitcoin to cash  also led to the company adding $936 million to its balance sheet.  So while Tesla has been increasing its revenue and net income YOY, can they outperform compared to new car manufactuers bringing new EV models online during 2023 and beyond.