We’ve been writing and talking a lot about Tesla’s sales goals and Tesla sales forecasts from people like Troy Teslike and me. We’ve also been covering in great depth the battery supply chain that is needed to make high-volume Tesla vehicle sales possible. In a recent conversation, it came to mind to highlight why Elon has a target of 20 million vehicle sales a year by the end of 2030. That’s something that’s so often glossed over that I think a lot of people (especially hardcore critics) aren’t even aware of it.
Elon talked about it in what seemed like a very honest — and a bit emotional — way during Tesla Battery Day. He brought up Tesla’s mission, which you’ll recall is to accelerate the transition to sustainable energy (including electric transport). One might think at that point that he’d boast and cheer that Tesla had already accomplished its core task. I’ve written a number of times that Tesla has achieved that goal. After all, I think anyone who follows this market knows Tesla has greatly accelerated the transition to zero-emissions electric vehicles. Instead, however, Elon pointed out that he and Tesla were still failing at that fundamental aim.
How is Tesla failing? Well, the underlying reason for accelerating the transition to sustainable energy is to help avert climate catastrophe. Although the transition has been accelerated, it has not been accelerated nearly enough to make a big dent in carbon emissions. In a somewhat sullen way, Elon emphasized this and explained that that’s the big reason why they are trying to go so big by 2030. He sees what Tesla has accomplished as inadequate on this core issue if Tesla can’t get to something like 20 million vehicles a year in 2030.
Yes, other things are needed too — more renewable energy (which Tesla also focuses on), less deforestation, more energy efficiency in buildings, more human-powered transport — but there is no denying that a critical element of solving the climate crisis is getting people out of fossil-powered vehicles and into electric vehicles. Additionally, current forecasts and automaker plans are too weak. Leaders like Tesla still have to push to make the transition happen faster. In fact, given that much of the bottleneck is likely to be on the battery side of the equation, Tesla dug deeper (no pun intended) and is also now focused on battery production and perhaps even lithium mining/extraction.
Some people may continue to think that Elon Musk is simply trying to get richer. Anyone who knows him well knows that makes no sense at all — it’s not what he cares about, and he wouldn’t be as rich as he is if that is what he cared about. Some may think it’s about ego. No doubt that comes into play. But what is fundamental to who Elon is is that he’s got a deep desire to help humanity as a whole. Also, he loves the hero narrative and fits the archetype well in many regards, and that is the identity he keeps trying to grow into. What does a person who has achieved so much in the business world want to do next? Well, in the case of Elon, accomplishing his initial base mission would be a nice place to start, and he quite logically concludes he’s far from that and needs Tesla to be producing ~20 million vehicles a year.
A ton of Tesla fan hype is now focused on the stock. I am a small shareholder, but I honestly get quite irritated by the focus on the stock. It is not what truly matters. It is not the story that I think people should be focused on. Of course, the world is the world and it is what it is, but what is unique and wonderful about the Tesla story is that Elon and tens of thousands of other people are doing so much to solve the climate crisis, yet have such bigger hopes and dreams. What is exciting is that we are in a race against time, or against emissions (and it is indeed a stressful race) and we have this company so focused on helping — and doing so well at that. Some people forecast there will be 80 million vehicle sales a year in 2030. Some estimate 100 million. If we assume Tesla reaches 20 million sales that year and the global total is 80 million, that’s 25% of sales. Many more electric vehicle sales are still needed from other automakers. If we assume Tesla reaches 20 million sales that year and the global total is 100 million, that’s 20% of sales. The rest of the market has to pick up the slack even more. Getting other automakers to supply 20 million by 2030 seems daunting, but Elon determined that the best way to push other automakers and also do his own part is to aim for that bold, ambitious target, a number that doubles the annual output of recent global auto sales leaders like Toyota and Volkswagen Group.
What’s my point? Well, my point is that I think when we look at these grand Tesla goals and the progress being made toward them, we should recognize the core mission a bit more. The point isn’t the stock, making business history, who gets to claim they knew better, or Elon’s ego. The point is the mission.