Tesla's Projected Growth and Future Automotive Trends

Tesla's ambitious growth projections depend on consumer demand for innovative, lower-cost electric vehicles.

### Tesla's Ambitious Growth Projections and the Future of Automotive Ownership
* 🚗 Tesla anticipates a **growth of 20 to 30%** in the automotive sector next year, indicating a potential **high-volume model**, likely a **lower-cost electric vehicle**.
* 📉 However, the current market dynamics suggest that such growth projections are **ambitious**, as no other car company is forecasting **similar increases**.
* 🔍 Analysts are skeptical about Elon Musk's promises, questioning if the **necessary sales targets for this quarter** and **next year's growth** can realistically be achieved.
* 💰 The demand for a **$25,000 electric vehicle** is uncertain, as consumers often seek **new designs** rather than just **cheaper versions** of existing models.
* 📊 Interestingly, Tesla shares have **surged nearly 19%** despite the S&P 500's slight decline, highlighting **investor optimism amidst mixed market conditions**.
* 🤖 The concept of **fully autonomous vehicles** is appealing, yet public readiness remains a significant hurdle, with concerns about **safety and regulatory issues**.
* 🏙 Tesla envisions a future where personal vehicle ownership diminishes, leading to a shift towards **fleet services**, but this transition may occur **more slowly than anticipated**.
* 💡 Overall, while Tesla's innovations and strategies are promising, the reality of **consumer behavior and market readiness** may temper the **pace of change** in the automotive landscape.

They see growth in the automotive business of 20 to 30% next year. Really interesting. What did you make of that? And does your research and math support it? Well, that indicates that they have a high volume model coming. I mean, in this market right now, I don't think any other car company is projecting that type of growth. So they have high expectations for this lower-cost electric vehicle, whether it's the three or the Y, and that's low cost. But yeah, that does not track with where the auto industry is heading. So, of course, with Elon Musk, his promises, you never know exactly what that timeline is and if they'll actually hit those markers. But I mean, I think those sales growth projections have to indicate an incremental volume model for Tesla. So if the math doesn't seem to quite add up for what they need to achieve this quarter, that we're in point us forward to next year as well when we see a play

of catch up and ultimately what price point they have to come in at for that up to 30% growth. Where is the demand from your perspective? Yeah, so the interesting thing about his comments is the way he describes the car market, and he's done this on past calls. He feels like he assumes that everybody out there is a very pragmatic buyer. He says things like, If we hit the right price and the demand is infinite, something like that. He's talked about people are looking at cost per mile. And that's not the way people, especially in the United States, buy cars. I mean, if that was the case, we would not have luxury brands. We would not have large SUV sports cars. So, you know, in terms of that actual volume, if there was a $25,000 EV, would everyone still want, especially if it looked very much like what exists today? I think that is probably the biggest

question I have for them really next year, because people like to see new things. They don't want to see the same old thing that they've seen, but now just cheaper. If you want that, you can probably go get it. I mean, it's not new, but you know, it's in that price range. If you're just joining us, I'm Bloomberg Technology Tester. Shares are up almost 19% while the S&P 500 is down a little bit, a 10th of a percent. Here's a fun stat for everyone. The previous biggest gain testers ever posted on a day where the S&P 500 was down was seven and a half percent. That's the state of play now. We're up 19%. And Jessica, a big part of it is this autonomous future. How much have you looked into FSD and how much do you think it resonates with the consumer at large right now?

I don't think it's for everybody at this point in time. I think people like the idea of a vehicle driving itself. I mean, who wants it? Who doesn't want that time back? But we're talking about the next few years, and are people really ready for it? I think you're going to have a group of people that like it, but I think you're going to have a lot of opposition as well. People that feel like they're on the roads being subjected to these vehicles that they didn't ask for. So, I think getting the public ready is a really big hurdle that we're not really talking about. We're talking about the technology and the regulatory and all of that. I mean, that has to be solved. But also, these are going to be in our streets. And I think there's going to be a lot of concern out there if we don't start talking about how this all works. Okay.

And regulation is actually something that Musk himself was talking about potentially being able to push forward if he does indeed get a role in the next administration. A lot of ifs within that. Jessica, just go back to the facts of this quarter we're currently in. Do you believe that the targets outlined on the call will be made for this current quarter, let alone the 30% being looked out for next year? I mean, it seems like it seems like this March, this quarter will probably see some sort of increase in sales overall. We know that, you know, we've had a Fed cut, so interest rates are a little bit a little bit easier. And then also, Tesla has been pretty aggressive with with their incentives. So the fact that they are offering good deals out there is helpful. And then also, when you just think about new vehicles in general, I mean, a new point is, is the best deal. So I think that that is working in their

favor, but it's not necessarily going to make, you know, these massive sales jobs out there. It's dissipating next year. Jessica Tesla wants to change the relationship of an individual with cars. You know, I have a Tesla model Y, I believe Cara also has a Tesla. We both use FSD, but in the future that Tesla sees, we don't necessarily own our own cars, and if we do, we submit them to a fleet when we're not using them in the same way we might put homes on Airbnb. You cover this industry, how are you going to cover it going forward? Yeah, I mean, yeah, I mean that's a big question. Like in terms of personal ownership, do we own these vehicles? Because I do think that there are a group of people that they want their own vehicles. They're not going to fleet at all. They don't want their vehicle coming back in whatever state that it's going to come out in 10 hours when they need

to use it again. But there are people that will use this. And I think that this is going to be a, you know, a real income differentiator of people that have their own vehicles and people that can get around. And they're not having to worry about a monthly payment or insurance, which has gone up so much recently just in the past year alone, and everything that is associated with car ownership. So it's definitely going to change. But I feel like it's going to be a bit slower than I feel like what we're promised. I mean, right now we're promised all these hopes and dreams that are happening in the next 5 minutes. But I think the rollout is definitely more conservative than that in reality.

Tesla's Slower Autonomous Rollout

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Tesla's Projected Growth in the Automotive Business

Tesla is anticipating a 20 to 30% growth in the automotive business next year, driven by a high-volume model and lower-cost electric vehicles.

This growth projection is unique in the current car market and raises questions about the company's ability to meet its ambitious targets.

The demand for cars is not solely driven by price, as evidenced by the existence of luxury brands and diverse vehicle types in the market.

The Impact of Autonomous Vehicles on Consumers

Shares of a company are up 19% while the S&P 500 is down, with the previous biggest gain on a similar day being 7.

The autonomous future, particularly Full Self-Driving (FSD) technology, is polarizing, with some consumers excited about the idea while others oppose it.

Public readiness and acceptance of autonomous vehicles on the streets pose significant challenges that need to be addressed.

Tesla's Future Vision and Current Challenges

Musk is considering pushing for regulatory changes if he takes on a role in the next administration.

Tesla is expected to see a sales increase this quarter due to Fed interest rate cuts and aggressive incentives.

The company's future vision involves changing car ownership dynamics, with a focus on fleet sharing rather than individual ownership.

The Impact of Vehicle Ownership on Income Differentiation

The increasing costs of car ownership, including monthly payments and insurance, are creating a divide between those with their own vehicles and those without.

The promised rapid rollout of alternatives to car ownership may be more conservative in reality.

The shift in transportation options is expected to take longer than anticipated, despite the current hype.