Tesla CEO says upcoming Model 3 could generate $20 billion a year revenue

Tesla (TSLA)'s upcoming Model 3 car could generate $20 billion in revenue per year and an annual gross profit of about $5 billion, Chief Executive Elon Musk said.

"Things are on track to be able to meet the Model 3 cell production timing in the middle of next year," Musk told reporters at a press conference on Tuesday at Tesla's "gigafactory" facility in the Nevada desert.

Musk said that the company's stationary battery packs, named the Powerwall and Powerpack and designed to store power for homes and commercial buildings respectively, would be "as big as the car business, long-term."


"The growth in stationary storage is really under-appreciated," he said. "That is a super-exponential growth rate."

The massive manufacturing facility, located outside Sparks, Nevada, will total around 10 million square feet when completed; about 1.9 million square feet have been finished so far.

Musk said the full-sized gigafactory would ultimately be able to produce enough batteries to support up to 1.5 million cars—about three times the number of cars he originally expected the factory to support when running at full capacity.

Tesla aims to produce as many as 500,000 cars per year before 2020. Meeting consumer demand would require that Tesla also rapidly produce lithium-ion battery cells, which it currently buys from Panasonic in Japan.

The company has been hurrying to finished the factory in time for the launch of Tesla's $35,000 Model 3 sedan. Tesla has received almost 400,000 pre-orders for the car so far, and has received some criticism that it has not been able to keep up with demand.

Regarding subsidies and tax breaks, Musk said, "Nevada is not paying for this factory," adding that the package Nevada offered the company made up only a tiny fraction of the factory's total costs, estimated to be around $5 billion.

It is also not likely to be the last gigafactory, either.

Musk said he imagined it would eventually be most efficient to place a gigafactory on every continent where Tesla products were sold, and considers the factory itself a product the Tesla would continue to refine and improve with every iteration.