Tesla could be building 500,000 EVs a year, according to a report produced by automotive analysts at International Strategy and Investment.
ISI has told investors that Tesla has a major advantage over the competition in that it will not face significant rising costs as global CO2 emissions regulations become ever more onerous. The business case for a premium electric car also seems to be compelling, according to ISI.
While Land Rover and Porsche are realising profit margins of 15-18 per cent – the highest in the mainstream car industry – Tesla could be in line for margins of 25 per cent, rising to a possible 30 per cent by 2020.
ISI has told investors that it believes Tesla to have a “tangible lead” in both product and technology and that battery electric vehicles (BEVs) are likely to be the “optimum solution as original equipment manufacturers pursue tailpipe emission-free cars” rather than cars with hydrogen fuel cells.
ISI said: “[Tesla] has a market-leading product for which there is no obvious competition [and] has already created substantial brand equity through product and innovation. Global legislation, namely emissions regulations, is a tailwind [for Tesla] yet a headwind for the [premium] competition.”