Carvana Co. CEO Ernest Garcia Discusses Growth Targets and Strategic Vision at JPMorgan Global Technology, Media and Communications Conference

Key Takeaways

TL;DR: Carvana (CVNA) targets 3M units in 5-10Y (20-40% CAGR), 13.5% EBITDA margins, and scales production via IRC growth (target: 60 mega-sites). Execution focus, supply confidence, and AI/data advantages underpin LT targets. Demand sustainability driven by word-of-mouth and vertical integration; GPU/EBITDA upside and debt reduction prioritized.

1. LONG-TERM GROWTH TARGETS & OPERATIONS

• 3M unit target: Plans to achieve this via expanding IRCs (currently 23, >35 by YE25, 60 long-term), with production capacity growth at ~180 units/week (vs. current 80/week).
• Execution over demand: "Demand questions... generally, there." Historic customer stickiness (older markets like Atlanta have 3.5% market share vs. 1% nationally) driven by word-of-mouth.
• Production math: 4 units/week/IRC growth rate needed; 60 IRCs = 240/week capacity. Scaling to 180/week average key for 3M units in 5Y.

2. SUPPLY-SIDE CONFIDENCE

• No sourcing risk: 3M units = ~7.5% of US used car market; mature dealer dynamics allow "displacement" at similar economics.
• Lease returns not critical: Accessing all supply channels (incl. auctions, consumers) prioritized vs. franchise-specific sourcing (e.g., Stellantis acquisition details withheld).
• Margin pass-through: Industry-wide fixed dealer economics ensure stable unit economics despite competition.

3. MARGIN & FINANCE OUTLOOK

• EBITDA focus: Vertically integrated model (retail + finance) drives +$1K-$2K/unit EBITDA improvements annually; targets "double industry margins" (vs. ~6-7% peers).
• Finance GPU gains: 8th credit model rollout and auto loan "mispricing" exploitation seen driving sustainability.
• Future flexibility: May trade margin for growth; "13.5% EBITDA is a floor, not ceiling."