Tesla, Inc.
Clay Courtmanche, Rory O’Driscoll, and
Michael Clow
Steams of Revenue
• Tesla makes the majority of their
revenues through the sales
of automobiles
• Other revenue streams include
energy generation and storage, and
services
Such as maintenance, warranties and
insurance, sales of used vehicles and retail
merchandise
• 2021: $47.2B automotive revenues
• $3.8B services revenue
• $2.8B energy generation/
storage revenue
Background
•
Tesla pioneered the transition to sustainable
Leadership
energy and transportation
•
Largest battery electric vehicle automaker
•
Goal: Sustain performance as EVs grow from
niche market to mass consumer adoption
•
Strategy: Massive capacity expansion, 5%
reinvested in R&D, and new vehicle lines
Elon Musk
Zachary Kirkhorn
Andrew Baglino
•
CEO
•
CFO
•
•
“Technoking”
•
“Master of Coin”
Senior VP
Stock Pricing
Tesla Inc. (TSLA) relative to NASDAQ 100 (NDX) (3-year)
Timeline
2003
Founded by
Martin Eberhard
and Marc
Tarpenning
2004
Elon invests
$30M and takes
on roles
of chairman of
the board and
product architect
2006
Tesla's first
product to
market is
released: the
Roadster
2008
2010
2013
Elon assumes
the role of
President/CEO
Tesla files for
IPO and goes
public on the
NASDAQ
Tesla builds
their first
gigafactory
2017
Release of the
Model 3 and the
introduction of
autopilot
2021
Tesla reaches
$1T in market
cap
Industry Trends
2021 Worldwide Automotive Sector Brand Value
Industry Competitors
Ford
Honda
General
Motors
Ford
• Pledged to
spend as much
as $30 billion on
electric vehicles
from now
through 2025
Honda
• Plans to spend
around $40 billion
on electric vehicles
over the next
decade
• Targets full switch
away from gasoline
engines by 2040
General Motors
• Pledged to
spend as much
as $35 billion on
electric
vehicles from
now through
2025
Opportunities
Threats
 Elon Musk
 Elon Musk
 Trailblazing Technology
 Growing Competition
 Brand Recognition
 Market Share Loss
 Battery Cost Reductions
 Declining Solar Panel/Battery Prices
 Solar Panel Usage
DCF Assumptions
Growth rates:
EBIT: 40%
D&A: 10%
NWC: 15%
Cap Ex.: 25%
Discount rate: 20.1%
 EV industry CAGR between 2021 and 2028 is
24.5%. Tesla will likely continue to dominate the EV
industry as they have had incredible revenue and
production growth in recent years which is why we
expect them to outperform industry averages.
 Tesla's D&A has grown by approx. 10% over the
past three years and we are assuming that that
growth rate will stay consistent.
 Tesla has continued to reinvest into themselves and
their production over the years. We don't see this
stopping and think 15% is a reasonable.
 Tesla will have to continue to reinvest as they grow,
and their cap. ex. numbers have grown significantly
year after year.
Hold.
Final Take
Now may not be the best time to buy TSLA, according to our
DCF the company is overvalued.
Do not buy short.
DCF prices:
Perpetuity: $69.88
EV/EBITA: $148.58
Any questions?