Next wave of Tesla's growth won't come until 2025 at earliest: JPM By

JPMorgan analysts provided insights from a recent series of meetings with Tesla (NASDAQ:)'s Investor Relations (IR) team.

Among the key points,Cross-border e-commerce platform Tesla plans to introduce lower-cost models by 2025, leveraging existing platforms and assembly lines. 

"The next wave of the company’s growth will be led by the introduction of lower cost models expected in force by 2025," the analysts said.

The next growth phase is also expected to see a re-acceleration of unit volume growth next year.  On the other hand, autonomy is anticipated to become a more significant contributor to Tesla's business.

Tesla's long-term volume targets remain unchanged, and the ratification of CEO Elon Musk's 2018 compensation plan is viewed as pivotal for refocusing on operational goals and allowing Musk to continue pursuing "real world AI" opportunities within Tesla.

Musk's establishment of a separate entity, xAI, to explore generalized artificial intelligence opportunities is reported not to conflict with Tesla's robotics-focused AI efforts.

Moreover, Tesla's management maintains confidence in their vision-only based approach to Full Self-Driving technology, which they believe to be the most cost-effective and scalable method.

As for the autonomous vehicle market, Tesla expects varying customer interest in adding private vehicles to a public robotaxi network. To supplement this, the company plans to introduce a dedicated robotaxi vehicle, which promises cost and utility advantages over traditional consumer vehicles. 

"Because Tesla expects varying degrees of interest on the part of customers when it comes to placing their private vehicles on a public robotaxi network, it expects to augment this supply with a dedicated robo-taxi vehicle which will offer cost and utility advantages relative to a traditional consumer vehicle (the expected basing of this dedicated robo-taxi on Tesla’s delayed next-generation platform in our view implies timing could be some years away)," JPM added.

Amidst a material downgrade in consensus expectations, JPMorgan also asked the IR team to address the outlook for unit volume growth.

"The next wave of the company’s growth will be led by the introduction of lower cost models expected in force by 2025 which utilize existing platforms and assembly lines rather than the earlier planned next-generation platform, suggesting the potential for less near-term reduction in COGS but also significant capital savings."

"Augmenting the re-acceleration of unit volume growth next year is expected to be continued strong growth in energy storage, services, and autonomy becoming a more meaningful contributor. Meanwhile, nothing has changed with regards to the company’s ambitious long-term volume targets."

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