Updated from 9:10 a.m. to include additional risk in the ninth paragraph.
NEW YORK (TheStreet) -- Everyone and their brother went nuts yesterday (myself included) when Tesla Motors (TSLA) unveiled plans for the Gigafactory. After a good night's sleep, a shower and some thinking, it might be time to take a step back and say, "wait a minute."
In yesterday's unveiling, Tesla said it expects to reach production unit rates of 500,000 cars per year by 2020 because of the Gigafactory. That's an incredibly fast ramp rate, considering the company expects to deliver 35,000 Model S vehicles this year, up from just over 20,000 in 2013. That 500,000 vehicle number includes the Model S, the Model X (slated for release later this year), and the upcoming Gen III vehicle, which CEO Elon Musk has said will be in the $30,000 to $40,000 range.
That's obviously very ambitious, and is part of the reason why Morgan Stanley believes Tesla is going to be much more than a car maker, and transform the utilities industry, potentially opening up trillions of dollars worth of opportunities for the company.
Forget the fact that the Gigafactory is going to be expensive, which is part of the reason why Tesla announced a $1.6 billion convertible debt offering yesterday, as the company continues to grow. All companies need access to capital, and Tesla is no different. The one thing that bothers me is right smack in the company's 10-K filing, which it released yesterday in conjunction with the debt offering and the Gigafactory announcement.