I think the bull case is built mainly along Tesla's brand. For a normal car company, the more cars you make, the less you can charge for them. You dilute your brand by going mass market and become something approximating a commodity. I think there is a case to be made that quantity will not dilute the Tesla brand as much as it dilutes other luxury car companies, since the brand isn't built on scarcity it's built on a something like a superhero.
So the bull case to me is that Tesla may be able to do what Apple did-- have a small
fraction of the market and take home the vast majority of the profits. And this isn't because other car companies will be less profitable then they are now, it's just that Tesla will redefine what profit margins are possible on mass market cars.
Toyota has $260B revenue. Imagine a company a quarter of the size, with a 25-30% profit margin.
So the bull case to me is that Tesla may be able to do what Apple did-- have a small fraction of the market and take home the vast majority of the profits. And this isn't because other car companies will be less profitable then they are now, it's just that Tesla will redefine what profit margins are possible on mass market cars.
Toyota has $260B revenue. Imagine a company a quarter of the size, with a 25-30% profit margin.