Hey guys it's sasha and oh, my god, the next few months are going to be insane for tesla shareholders. There is a lot going on with tesla stock at the moment and in this video i will tell you exactly why i think that the first half of 2022 is going to be the most exciting time for tesla's share price. Yet i already talked about some really big things happening with tesla this side of christmas, and since i made that video just five weeks ago, tesla's stock is up 12, but here is the really insane bit while i am really excited for what is happening right now And will be happening over the next few weeks, i'm actually far more excited by what tesla has coming in q1 and q2 next year, because that's when i think tesla's share price is set to really go off the rails. Just remember that i am not a financial advisor and i don't have magical powers of seeing into the future.

I can't provide financial advice to you, but what i can do is talk through some of my analysis and some really important developments. I'm just a guy with a big load of tesla shares sharing his opinion. So, let's start with the really big stuff. Let's talk about car production numbers, because this is something that the investing community tends to not understand very well.

A really popular comment. I get on my videos is that the market is rational and all the factors i mentioned are already priced in. The share price apparently already reflects these new factories opening up and production, ramping and everything else. But the simple truth is that the market is not anywhere near as smart or as rational as some people think if the future production ramp was properly and accurately priced in.

Why would tesla's share price drop from 900 to just 540 over the space of a few weeks and then slowly go back up to 843, as i am recording this video and everyone knew that tesla was building the shanghai factory back in 2019. Everyone knew they were going to make cars there, and everyone knew because there was public information, how many cars they were expecting that factory to make. But then the market was apparently still surprised when the shanghai factory actually did begin producing those cars, and his share price went up from 70 when the first shanghai cars began being delivered to 600. Just one year later and at the moment tesla has not one.

But two factories that are about to start producing cars, berlin and austin, and these two new factories are both much larger, much much larger than the two existing ones that they have in fremont, california and in shanghai, and they also have an improved layout and design. The shanghai factory is still ramping up its production two years after they started to make cars. They sold 56 000. China made cars in september, which is a huge increase over just the last few months and is equivalent to an annual run rate of 670 000 cars.

That's 32 percent more than the 510 000 cars that tesla made last year in both of their factories, which is a crazy statistic. At the moment, austin is still having a lot of work done on the building and outside of it. Although production seems to be not too far away, berlin seems to be ready and is apparently waiting for the german authorities to sign off the factory. Elon musk hosted the berlin factory opening party pretty much last week and said that he expects production to start next month.

That's in november 2021, and he also said that he expects production to take over a year to reach high volumes to scale. We haven't got any firm dates, but all the sound bites at the moment are pointing to austin running maybe a month or two behind berlin. At the moment, although they are probably not gon na run into the same paperwork issues, so there is every good every chance every likelihood that the production in austin will start later this year, possibly in december, maybe in january, for the first deliveries - and here is why This is critical over the last four weeks. Tesla has ramped up production faster than they ever have done before in their old factories, but demand is spiking even faster.

If you try to order a tesla at the moment, you have to wait months. The model 3 weight at the moment is about two months in the us and europe. The model y is about six months and the model s is eight months or longer, just like with the shanghai factory in december 2019. I don't believe the market actually understands what q1 and q2 next year for tesla are going to look like in q3, 2021 tesla made 237 823 cars.

If china maintains the production rate from september and doesn't increase it further, that will add 35 000 cars to the total production rate in q4 alone. Over the weekend, tesla has also started delivering their refreshed model x in california, and even if the initial production numbers are going to be low, that should add at least another five to six thousand sales in q4, as well so before the new factories open before any Further ramps in production at either of the two factories we are already looking at a quarterly manufacturing total of probably about 279 000 cars, which would be a 17 increase quarter on quarter and a 55 increase year on year. If berlin can start production in november, as is being expected and gets to any sort of pace, and if austin does anything at all this year, there is a very strong chance that tesla is going to be going past. 290 000 cars in q4, possibly touching on 300 000..

We'll only see those year-end production numbers at the beginning of january, but then we're also going to see both austin and berlin actually producing cars for an entire quarter in april, because that's when we'll see the q1 2022 results and then in q2 next year, those factories Should be on some kind of reasonable production rate already not the full scale production, but they should be making cars on a regular basis by that point, and we will be seeing production go to over 400 000 cars and possibly pushing over 500 000 cars per quarter. That's in q2 next year, tesla is reporting their q3 performance in just two days on wednesday october 20th, and by the way i will be covering it live and i'm going to be diving deep into all the numbers as they are released as per usual. So if you want all the analysis, make sure you tune into that that should be happening at about 9 p.m. Uk time or just after the markets close over in the us, but here is something those numbers won't show just yet at the moment, tesla is suffering in europe, they're suffering in a big way.

Despite everything, the wait times in europe are much longer than in the us, and the demand is absolutely going through the roof. Some models, like the model s plaid or the model x, aren't even being sold in europe at the moment, because u.s demand is higher than the number of cars that the fremont factory is producing and those cars are only made in fremont and even worse than that, The cars that are sold in europe have to be shipped over from china. This takes time it adds to the time scales. If you are ordering the car, it also adds a lot of cost.

Shipping costs are not huge in the grand scheme of how much each of these cars cost, but they do add up, and the shipping costs have gone up quite considerably over the last 12 months and we also have to pay extra in duty on importing those cars Into europe as well, and europe is a huge market - this is something that is really important to point out. The population of the eu alone is 445 million people, that's more than the united states and canada combined in the q2 update three months ago. The automotive gross margins were 28.4 percent for tesla, which is already a very big number for any car company, but think what happens when you start producing cars locally for the biggest market in the world, without having to pay shipping costs and without having to pay duty. In q2, tesla made 2.5 billion dollars in adjusted ebitda and made 206 000 cars.

So let's do some basic math. Take car production to a rate of five hundred thousand cars per quarter uh by the end of q2 next year. On a run rate basis, then increase your margins in the biggest target market that you have and remember that operating expenses are not going to scale linearly with revenue now, because the new factories on scale production is only going to reduce those in percentage terms. Just because you have four factories and producing maybe two and a half times many cars does not mean that your r d expense is also going to scale by two and a half times so q2 next year is pretty likely to churn out somewhere in the region Of maybe eight billion dollars in ebitda, maybe for q2 or maybe the run rate for the last month onwards, that's before adding in any benefit from insurance, energy or any revenue from fsd and if those in any of those come through in the next six months.

That's only going to make things look even better. Eight billion dollars of ebitda per quarter is 32 billion dollars of ebitda per year, and suddenly the current market cap of 834 billion dollars for tesla is only a 26 times multiple, and that is only a few months out at 26 times, multiple, while two new factories Are still actively ramping up production and not even fully deployed yet and the annual growth rate at that moment on production is likely to be 100 or maybe even higher. So i think when those numbers come through, tesla's share price is going to be moving and it's going to be moving fast. The weird thing is this: these numbers are pretty evident.

You can literally see the two huge new factories nearing completion. You know exactly what state they're in and what the demand situation for the cars from those factories is like, and you know what the production ramp is going to look like what, when this factory is open, because tesla has told you and they've shown you what that Looks like with previous factories, but as it always happens, the market will wait patiently until the numbers are officially published and printed on paper before investing, by which point the gains between now and then will have already been missed. But this is for me just the base case. This is what i expect to happen and i'll be surprised if i was far out here is where it gets really exciting for tesla stock.

Over the last few days, tesla has launched insurance for the first time in the us in the state of texas. Tesla drivers can now buy insurance through tesla and elon. Musk has confirmed that they are working to roll this out across the whole of the united states. Over the coming weeks, insurance by not might not be a particularly exciting business, but in the case of tesla it is virtually an extra software add-on and all of those revenue streams and all those profit margins add up.

Auto insurance companies tend to operate at a profit margin of about 15, and the gross margin is often closer to 50. Now add in the fact that tesla doesn't need to market this insurance, that is, you know, already available in their cars to their own customers, and they also don't need sales offices or other overheads. So we're probably looking at a thirty percent net margin on a conservative estimate. A typical insurance policy in the us is about seventeen hundred dollars, so that's roughly 510 profit per policy per year or about five thousand dollars over a typical car's lifetime.

I'm just assuming a 10-year lifetime here now, let's say 20 of the tesla sold in only the united states eventually take up that insurance policy and i actually think that it might be underestimating it in the long term. But let's say fremont continues, making the same. 500. 000 cars per year that it is currently making and it doesn't scale by the way i think it will.

But for the sake of argument now, let's say austin starts making cars and its run rate only gets to the same 500 000 cars per year as fremont. Again, i think a hugely conservative assumption - that's one million cars per year made in the us, 20 of which is 200 000 insurance policies and 200 000 insurance policies at 5 000 lifetime profit per policy is a cool 1 billion dollars. Then remember that fsd subscriptions and any potential licensing deals that could be negotiated in the next nine months. Uh with other car manufacturers.

Remember that that same insurance policy can be rolled out to other markets, then remember that tesla has just received literally a few days ago. Their energy supplier approval in the state of texas and hasn't even started generating revenue through that yet and then remember that the whole of tesla's energy business is only really just getting started and at this tesla shareholder meeting just a few days ago, elon musk said that He is still sure, and they are still planning for tesla's energy business to eventually become bigger than their car business and by the end of q2 next year, tesla should be announcing the new sites for new gigafactories because they are planning to continue growth after these two New ones are built just like happened after they finished uh. The gigafactory over in china. Elon actually confirmed this point in the shareholder meeting as well.

We should also have more certainty on the timelines for the cyber truck more certainty on the timelines for the four 680 cells, because we are nine months from the end of q2 roughly, although, realistically, i do think that both are probably going to be happening later on Next year best, so we're not going to be seeing any p l benefit from them. I don't think in the first two quarters, so on the basis of all of that, i think the first half of 2021 is going to be huge for tesla stock. We're going to have a lot of deliverables happening within that period, we're going to be having a lot of other stuff happening down the line to look forward to the biggest advances in production and earnings. Tesla has ever seen, and i think the market will only begin.

Waking up to what a fair value of tesla shares is once those numbers start rolling in no matter how obvious those numbers might look right now to me, and maybe some other people. If you found this video useful, i would really appreciate it if you could just go and smash the like button for the youtube algorithm. Thank you so much. Thank you so much for watching this video all the way through and as always i'll see you guys later.

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