Elon Musk wants Tesla to be the biggest car company ever by 2030. Experts say there's no way.

Tesla Model 3 vehicles queued up at the carmaker's factory in Shanghai, China.
Some of the world's biggest carmakers would need to collapse for Tesla to hit Elon Musk's ambitious goal, experts said.REUTERS/Aly Song/File Photo
  • Elon Musk wants Tesla to sell 20 million electric cars in 2030. Last year it sold 1.3 million.

  • That's the equivalent of Toyota and Volkswagen, the world's two biggest carmakers, combined.

  • Experts say it's not possible.

Outside of his achievements in business and technology, Elon Musk is best known as a man of many tweets and bold predictions. He wants to establish a colony on Mars and thinks an army of intelligent Tesla robots will soon mow grass and grab groceries for millions of people.

Another lofty goal that the billionaire entrepreneur has kicked around: Sell at least 20 million Teslas in 2030, effectively transforming the young firm into the largest car manufacturer the world has ever seen. But is that even remotely possible? Auto manufacturing experts have their doubts.

It would upend the industry

"I think that is, frankly, beyond a stretch goal," Jeff Schuster, head of the automotive practice at GlobalData, told Insider.

Let's put that aspiration into perspective with some data. Consider that today's top-selling automakers — Toyota and Volkswagen — each ship 10 million units annually, give or take. Last year, Tesla delivered a record 1.3 million cars, making it the leader in electric-vehicle sales. In 2030, around 100 million new cars will change hands around the world.

The notion that Tesla could swallow up one-fifth of the incredibly competitive car market in such a short time, if ever, is a fantasy, industry analysts said.

Elon Musk speaks at the opening of a new Tesla factory.
Tesla's goal would mean accounting forChristian Marquardt - Pool/Getty Images

"If Tesla owns 20% of the global market by 2030, that would likely mean two or three of the top 10 global manufacturers would go out of business or be reduced to ashes," Schuster said. "It would turn the entire industry on its head, and I don't foresee that happening."

Tesla's quest for domination sounds a lot like what Apple achieved in the smartphone market. Indeed, if you ask Musk, Tesla isn't merely a carmaker, but rather a tech company that could soon be worth trillions more than Apple. Its emphasis on sleek software, ultra-loyal fanbase, and tightly controlled ecosystem (Tesla owns its chargers, showrooms, and repair shops) certainly feels more Apple than Toyota.

But Teslas won't become another ubiquitous iPhone, Sam Fiorani, an analyst at AutoForecast Solutions, said. Unlike the smartphone world circa 2007, the automotive market is mature and packed with experienced competitors. By successfully landing EVs on the map, Tesla prodded the entire auto industry to sink billions into electrification, and those investments are already paying off.

"It's such a competitive market that Tesla would have to reinvent the automobile far beyond what it already has done in order to dominate to that level," he said.

Tesla would need more factories, models, and demand

Even setting aside the threat of competition, scaling up to 20 million annual sales would require gargantuan investments in expanding manufacturing capacity and developing new products to bolster Tesla's skimpy lineup, experts said.

Newly manufactured Teslas sit in a lot in Burbank, California, in 2018.
Newly manufactured Teslas sit in a lot in Burbank, California, in 2018.Reuters

Tesla currently assembles cars at four plants. To hit its goals, it would need 18-30 additional factories costing a whopping $90-$150 billion, Fiorani estimates. Even once a factory is built, production doesn't hit full speed overnight. Tesla's newest facilities in Germany and Texas are running at well below max capacity. Launching new models isn't a walk in the park either: Tesla has put off its Cybertruck pickup and Roadster supercar for years.

Even if it managed to crank out 20 million cars, Musk's firm would still need to find buyers for them, which isn't a given. Tesla's sales have exploded in recent years, in part because they're the hot new thing, but that ravenous appetite should fade as its cars truly go mainstream, Schuster said.

Where is Tesla now?

This isn't to take anything away from Tesla's remarkable ascent. In just the last 15 years, it's evolved from the weird, new kid on the block experimenting with electric sports cars to a global powerhouse that's lit a fire under century-old behemoths. In 2013, it produced some 22,000 cars; this year, it should make nearly 2 million.

Certainly nobody could have predicted that sort of trajectory when Tesla was just starting out. Perhaps it has some more tricks up its sleeve.

But Schuster would place Volkswagen at the top of the EV market in 2030 thanks to its vast manufacturing footprint and vehicle lineup. He projects that Tesla will keep growing but sell well under 5 million vehicles that year.

Read the original article on Business Insider