Hey, I’m Steven and this is Solving The
Money Problem.
If you’re new, welcome.
If you’re not, welcome back.
If you haven’t seen my video Tesla’s Secret
Plan, you should.
I’ll put a link below.
In it, I shared Tesla’s original 2006 Master
Plan which, in short, was to:
Build a sports car (that was the Roadster).
Then use that money to build an affordable
car (that was the S and X).
Then use that money to build an even more
affordable car (that was the 3 and Y).
And while doing above, also provide zero emission
electric power generation options (that was
solar).
Having completed their original master plan
against all odds, in 2016 Tesla published
Master Plan, Part Deux which, for a Tesla
investor, was a goldmine, brimming with clues
of what the future might hold.
Let’s read the goals it outlined:
1.
Create stunning solar roofs with seamlessly
integrated battery storage
2.
Expand the electric vehicle product line to
address all major segments
3.
Develop a self-driving capability that is
10X safer than manual via massive fleet learning
and
4.
Enable your car to make money for you when
you aren't using it
Number two was rather interesting.
“Expand the electric vehicle product line
to address all major segments”.
The plan went on to specify the need for a
heavy duty truck.
A year later, the Tesla Semi was revealed
which we know will make Tesla billions.
Tesla also mentioned a new form of high passenger-density
urban transport which I believe will ultimately
become the boring company transport pods.
More on this in a future video.
There was no specific mention of a Tesla van
but in this video--which I promised months
ago--I’m making the case for why I believe
Tesla is currently developing a van, in secret,
and why it will make billions.
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Let’s get back to it.
Tesla’s Product Roadmap
“Expand to Cover the Major Forms of Terrestrial
Transport”
This is a direct quote from Masterplan, Part
Deux.
Let’s see how Tesla is progressing.
In 2008 Tesla released the original roadster.
A low-volume sports car, addressing a relatively
TINY market, but helping Tesla to develop
and refine their technology.
In 2012 Tesla released the Model S. A luxury
sedan.
Once again, a small market, but a way for
Tesla to continue innovating and developing
its technology and manufacturing processes
while driving down costs.
In 2015 Tesla released the Model X.
A luxury SUV.
Once more, addressing a relatively small market
which as of last week, includes NASA astronauts.
In 2017 Tesla had its iPhone moment and released
its first mass market vehicle.
The Model 3.
A mid size sedan.
It took the world by storm and pulled the
rug out from under BMW, Audi, Mercedes as
well as Honda, Toyota and basically everyone.
Nobody could have predicted the Model 3 would
be the best selling car in California in Q1
2020, but it was.
Yeah.
Years after its release, the Model 3 outsold
the Civic, Camry, Corolla and Accord.
What the actual ****?
Tesla’s first mass-market vehicle is a roaring
success.
In 2020 Tesla released its second mass-market
vehicle.
The Model Y.
A compact utility vehicle.
I have no doubt Model Y will outsell the Model
S, 3 and X combined for years to come.
The market is gigantic and the vehicle is
amazing.
And in 2021, Tesla will release two new vehicles.
Its internet-breaking Cybertruck which will
compete head-on with the most popular vehicle
model in the US -- the pickup truck.
And the Tesla Semi.
I’ve speculated that Tesla’s next vehicle
to be announced is a compact car.
Check out my video to learn all about it.
I believe Tesla will unveil their compact
car before the end of next year.
It seems like with a mid size sedan, compact
utility vehicle, pickup truck and compact
car that Tesla will have addressed all major
segments of the CONSUMER market.
But not commercial.
And that’s where I see the Tesla van coming
in to play.
It’s the missing piece of the puzzle.
Tesla’s mission, after all, is to accelerate
the world’s transition to sustainable energy.
That means getting internal combustion engine
vehicles off roads.
All of them.
Not just consumer vehicles but trucks, vans,
busses -- the lot!
The Economics
People don’t buy vans.
Businesses do.
And that makes their potential easy to overlook,
but as a Tesla shareholder and long term investor,
I’m pumped at the prospect of a Tesla van.
The global commercial van market was $129
billion in 2017.
This is a HUGE, HUGE pie from which Tesla
can take a major slice.
And while the environmental impact can’t
be overstated, the truth is, the economics
are what really makes sense, and what will
sell Tesla’s van.
Even if your business could care less about
the environment, money talks and most businesses
would need to be utterly insane not to transition
their fleet to electric as soon as possible.
Most of us know electric vehicles are far
more energy efficient than internal combustion
engine vehicles.
This means they cost less per mile to run.
But it doesn’t stop there.
Electric vehicles require almost no maintenance
because they have very few moving parts.
Less things that can break and wear out means
less things DO break and wear out.
Fancy that.
Over time, these cost savings compound.
In a commercial setting, small cost savings
compound dramatically and compress the “payback
period” for a purchase into a very short
window of time.
For example, if you buy a Tesla Semi for freight
transport, you’ll be out of pocket almost
$200,000.
They’re not cheap.
Yet the fuel and maintenance savings are SO
enormous, that within 2 years, the cost savings
ALONE have paid for the ENTIRE purchase.
Now you have a free Semi truck that operates
at MUCH lower costs than a diesel equivalent,
saving you hundreds of thousands of dollars
PER YEAR, indefinitely.
Multiply that across your entire fleet.
The cost savings could easily number in the
millions just for a relatively small business.
The same concept applies to commercial vans.
In business, numbers talk.
It’s like “Hey, would you like to save
mountains of money every year or not?”.
Uses
Commercial vans have a huge variety of applications,
the most common of which is as a delivery
van.
Usually these are short city runs, delivering
packages, parcels and letters (wait do people
still write letters?).
For a sense of scale of the delivery van market,
we need only look at Amazon’s gargantuan
order from EV startup Rivian for 100,000 vans
JUST for the US market.
Amazon made this order on the back of an investment
in Rivian even before they’ve produced a
single vehicle.
If Amazon is buying 100,000 electric delivery
vans from a startup company, it's worth paying
attention.
Of course, vans aren’t just good for deliveries.
They’re used as ambulances, they’re great
for certain tradespeople, repair and maintenance
workers, airport pickup and drop off, giving
away candy, morphing into a coffee or food
truck and of course, transforming into a self
contained home on wheels.
Hashtag vanlife.
Most of these uses won’t apply to you and
that’s the point.
Vans are commercial products.
They’re not consumer-facing and thus easy
to overlook but do so at your own peril.
The potential here is massive.
Knowing Tesla’s Cybertruck comes with built
in power outlets and compressed air, I wouldn’t
be surprised if these features find their
way into the Tesla van too.
Safety
We know that Tesla currently produces the
three safest vehicles ever tested in the S,
3 and X. Elon Musk has repeatedly stated that
safety is literally the #1 priority for a
Tesla vehicle.
Performance, styling -- all come after safety.
I think it’s safe to say
hahah see what I did there….
Oh…
Um…
It’s safe to say that a Tesla van would
be one of, if not THE safest vans ever.
Both in terms of accident avoidance and passenger
safety in accidents.
What’s better than crashing your van?
You got it.
NOT crashing your van.
In business, accidents of ALL kinds cost time
and money.
The less of them, the better.
Tesla's autopilot and full self driving software
is second to none.
Incremental improvements in safety can compound
across a large fleet.
Imagine if you have half as many vans off
the road being repaired because they’re
all running autopilot and crashing less?
This matters.
Time is money.
Cost Savings
Stop.
Start.
Stop.
Start.
Stop.
Start.
Guess what I am?
That’s right.
A commercial van.
Stopping requires braking.
Starting requires accelerating.
Revelatory, I know.
But stick with me.
Tesla’s accelerate like nothing else.
This may not seem like a big deal for a delivery
van which probably isn’t your #1 choice
for smoking someone at a set of lights or
on the track but just imagine, for example,
if a Tesla van accelerates to full speed 5
seconds faster than anything else on the market.
Every time you start from a stop, you save
5 seconds.
Think about how many times a delivery van
starts and stops at lights, in traffic, at
destinations etc every hour.
Multiply this across your fleet.
Then there’s the braking.
Stopping a lot is a great way to wear out
your brake pads.
Enter regenerative braking.
Let’s define it.
“Regenerative braking is an energy recovery
mechanism that slows down a moving vehicle
or object by converting its kinetic energy
into a form that can be either used immediately
or stored until needed.”
In layman’s terms?
When you brake in a Tesla, instead of wearing
out your brake pads, you’re recharging your
battery, making it EVEN more energy efficient.
When you’re in the business of stopping
and starting for a living, fast acceleration
and regenerative braking REALLY matter.
Another hidden time saving?
Charging?
Most commercial vans sleep at the office,
not at the driver’s home.
Now, I may be going out on a limb here but
I suspect there are more commercial warehouses,
depots and businesses with power outlets than
with on-site gasoline pumps.
If your Tesla van is low on charge at the
end of the day, just plug it in.
No need to waste time making a dedicated trip
to a gas station.
Driver Experience
If Tesla’s Semi is anything to go by, I’d
expect a few driver-centric features tailored
to a van.
Obviously navigation is critically important
but I wouldn’t be surprised if Tesla applies
its software expertise to develop a platform
allowing integration of features specific
to commercial van customers.
Full Autonomy
As I’ve said 4 quadrillion times, Tesla
has WON full self driving.
Their data lead is unassailable.
It’s game over.
But I’m not here to convince you of that
today.
Just that fully autonomous driving WILL be
solved and when it is, everything changes.
Imagine your fleet of delivery vans no longer
requires drivers.
Just imagine.
Your biggest cost, eliminated, instantly.
What’s more, now your fleet can effectively
operate 24/7.
You know what would be a smart business decision?
Owning a fleet of cost-efficient electric
vehicles which at some point in the future
will become able to drive themselves.
p.s.
If you’re a driver of any kind, please,
PLEASE work on your Plan B, C, D and E. The
robots are coming.
Sooner than you think.
Partner Or Go Solo?
The biggest question I have about the Tesla
van is whether or not it will be an entirely
independent effort.
For those of you who don’t know, Tesla has
previously partnered with and supplied powertains
and batteries to other automakers.
Among them?
Daimler-Mercedes, who at one point owned a
10% stake in Tesla.
Yep, I said at one point.
They paid $50 million in 2009 for that stake.
In 2014 they sold it for $780 million.
About 15x.
Not a bad return.
Until you realise that today, that same stake
would be worth about $16 billion.
About 320x.
Or half of Daimler’s entire market capitalization.
Ouch.
My point?
There’s a strong chance Tesla’s van may
in fact be a Mercedes van.
After all, their Sprinter van is the gold
standard.
This isn’t just a hunch though.
Let’s look at this 2018 tweet from Elon:
“Maybe interesting to work with Daimler/Mercedes
on an electric Sprinter.
That’s a great van.
We will inquire.”
Shortly after, we heard confirmation from
Daimler’s then-CEO that “These talks are
happening” and “the outcome is open”.
We’ve heard nothing since but my prediction
is that either:
The talks were successful and Tesla will supply
its battery, powertrain and full self driving
software to Mercedes-Daimler for a “Tesla-powered
Sprinter Van” (once they have solve battery
supply constraints).
OR the talks were unsuccessful and Tesla will
make their own van.
Eventually.
Either outcome is a win.
The Numbers
It wouldn’t be a video about making billions
without doing the numbers so here goes.
The top 10 selling vans in the US alone do
about 500,000 units a year.
If Tesla captures 10% of this market, that’s
50,000 vehicles.
HALF the number of vans Amazon has pre-ordered
from Rivian.
Not an unreasonable figure.
If we assume an average selling price of $50,000,
that’s $2.5 BILLION dollars of revenue.
JUST from the van.
Just in the US.
Just by capturing 10% of new van sales.
But contrary to popular belief, the United
States is not in fact the entire world.
The global automotive market is about 90 million
vehicles per year.
Vans make up about 2% of this, or 1.8 million.
If Tesla captures 10% of the global market,
that’s 180,000 vans per year or $9 BILLION
DOLLARS IN REVENUE.
Even a mere 1% of the market would be almost
$1 BILLION DOLLARS.
Not making a van would run counter to Tesla’s
mission statement and be a huge lost opportunity.
The big obstacle between Tesla and its secret
van is battery supply.
There’s no point making a new vehicle when
you can’t even meet demand for your existing
products.
That’s why Semi has been delayed until next
year.
The good news?
At Tesla’s upcoming Battery Investor Day,
they’re laying out what is effectively their
Masterplan: Part 3--HOW they will scale battery
production to the obscene levels required
to transition the world to sustainable energy.
My prediction?
When Tesla has solved battery supply constraints,
they will officially announce a compact car
and later, the van.
While vans may not be sexy and as consumers,
we rarely think of them as a vehicle category,
they’re a hugely important piece of puzzle
which will make Tesla billions.
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I’m Steven Mark Ryan.
This is Solving The Money Problem and I love
you all.
Thanks so much for watching.
Let me know your thoughts in the comments
below.
Is Tesla making a van?
Will they partner with Daimler-Mercedes?
Would you like some free candy?
And of course, if you have any ideas for future
videos, let me know.
I read ALL your comments.
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