When Morgan Stanley analyst Adam Jonas speaks, Tesla (TSLA) investors and followers listen.
On Thursday, Jonas came out with a note claiming Tesla could more than triple its model lineup over the next 5 years. But what Jonas isn’t saying is that Tesla will have 9 total models compared to the 3 it has out right now. He’s talking about multiplying its segment coverage with additional models, thus tripling its lineup footprint.
What he means is this: Jonas notes that using industry data, the Model 3, Model X, and Model S occupy segments that total around 5.8% of total vehicle sales in the U.S. And two new models will more than triple that segment coverage.
The Model Y, Tesla’s upcoming “small premium SUV” as Jonas calls it, will itself address 3.4% of U.S. light vehicle sales, or nearly 60% of Tesla’s current sector coverage on its own. The Model Y is expected to be released sometime next year. Of course, with Tesla, deadlines are a squirrelly thing — the company and CEO Elon Musk don’t exactly adhere to them on a regular basis.
The big segment buster is the pickup. The full-sized and mid-sized pickup truck market accounts for 17.7% of all U.S. light vehicle sales, and Jonas estimates pickup sales are “over 20% of U.S. revenues and well over 50% of US auto profit.” It’s a big opportunity here, and that’s why Elon Musk is so hot on that ‘cyberpunk’ Tesla pickup he teased over 2 years ago.
About a minute in, we flashed a teaser pic of Tesla cyberpunk truck pic.twitter.com/hLsGsdyuGA
— Elon Musk (@elonmusk) March 16, 2019
Add that 17.7% to the 3.4% coming from the small premium SUV market, and voilà — Tesla has tripled its model lineup segment, but not its actual model lineup, if you will. Jonas is sort of pulling a fast one here on the lay public, but his case makes sense.
Now back to Musk. The Tesla CEO says the pickup will likely debut in November; it’s anyone’s guess when it actually will be revealed. And even if Musk shows his shiny new pickup, the next questions will inevitably be (1) timeframe for release, and (2) where will it be built.
Tesla says it is prepping the Fremont, California, factory for production of the Model Y SUV, but no vehicles are being built as of yet. Recall this is Tesla’s main factory that is at such a state of overcapacity that Tesla had to build an outdoor tent to increase production.
Color me a little skeptical as to the Tesla pickup coming anytime in the next 2 years. That being said, Jonas’s note does lay out a positive case for the automaker to expand its footprint — especially with the Model Y — and compete with the likes of BMW (BMW.DE) and Audi (VOW.DE) — who will soon be big electric carmakers of their own.