CVP Analysis
Tesla
Tesla is a company that makes electric cars and clean energy products. It was started in
2003 and is led by Elon Musk. Tesla builds cars that run on electricity instead of gas and,
also makes batteries and solar panels to help power homes and businesses. The
company is known for its advanced technology and focus on a cleaner future
•
Tesla’s products are: Electric vehicles (Models like: S, 3, X, Y), software and data
such as data collected from autonomous vehicles and charging stations.
•
Production volumes:
-2021: 936 222
-2022:1 313 851
-2023: 1 808 581
-2024:1 789 226
Revenues and costs for whole company and for operating
segments:
Whole company:
Revenues
Costs
2020
31.54 B
24.91 B
2021
53.82 B
40.22 B
2022
81.46 B
60.61 B
2023
96.77 B
79.11 B
Operating segments:
energy
generation
and storage
Revenues
Costs
2020
2021
2022
2023
1.6 B
1.2 B
1.8 B
1.4 B
2.3 B
1.8 B
3.8 B
3B
Services and
other
Revenues
2020
2021
2022
2023
4B
4.1 B
4.4 B
6.4 B
Costs
3.1 B
3.4 B
3.7 B
5.4 B
Tesla’s revenue has grown mainly due to higher production and sales of electric
vehicles, expansion into new markets, and increased demand for clean energy
products.
Fixed and variable costs:
Fixed:
- Depreciation of Gigafactories and manufacturing equipment
-Salaries for corporate, engineering, and administrative employees
-Lease expenses for facilities (showrooms, offices, service centers)
-Base R&D overhead (engineers’ salaries, R&D facility costs)
-Insurance, property taxes, and other corporate overhead
Variable:
-Raw materials (nickel, lithium, steel, etc.) and purchased components
-Direct manufacturing labor for production lines
-Freight, logistics, and delivery charges
-Warranty accruals for produced and delivered vehicles
-Certain transactional fees tied to each sale
Fixed and variable costs:
Fixed
Variable
2020
4.58 B
24.84 B
2021
4.52 B
40.22 B
Calculations:
CM= total revenue – variable costs
CMR= (CM\total revenue) *100
2020: CM = 31.53 − 24.84 = 6.69
CMR = (6.69 / 31.53) * 100 ≈ 21.2%
2021: CM = 53.82 − 40.22 = 13.60
CMR = (13.60 / 53.82) * 100 ≈ 25.3%
2022
7.02 B
60.61 B
2023
8.77 B
79.11 B
2022: CM = 81.46 − 60.61 = 20.85
CMR = (20.85 / 81.46) * 100 ≈ 25.6%
2023: CM = 96.77 – 79.11 = 17.66
CMR = (17.66/96.77) * 100 ≈ 18.2%
In 2023, the CMR dropped to 18.2% from over 25% in earlier years, and net profit
growth slowed. This happened because variable costs—like materials and
delivery—rose sharply, reducing profit margins.
Breakeven points in revenues and units:
BER = Fixed costs \ CMR
2020: 4.58 \ 0.212 ≈ 21.60 B
2021: 4.52 \ 0.253 ≈ 17.86 B
2022: 7.02 \ 0.256 ≈ 27.42 B
2023: 8.77 \ 0.1824 ≈ 48.09 B
BEU = Fixed costs \ Contribution margin per unit
2020: CM per unit = 0.212 * 61900 ≈ 13121
BEU = 4580000000 \ 13121 ≈ 349207 units
2021: CM per Unit = 0.253 * 57800 ≈ 14629
BEU = 4520000000 \14629 ≈ 308992 units
2022: CM per Unit = 0.256 * 59500 ≈ 15232
BEU = 7020000000 \ 15232 ≈ 460877 units
2023: CM per Unit = 0,182 * 50900 ≈ 9286
BEU = 8770000000 \ 9286 ≈ 944944 units
Safety margin and safety margin ratio:
SM = Actual revenue – BER
SMR = (Safety margin\ actual revenue) * 100
2020: SM = 31.53 − 21.60 = 9.93
SMR = (9.93 \ 31.53) * 100 ≈ 31.5%
2021: SM = 53.82 − 17.86 = 35.96
SMR = (35.96 \ 53.82) * 100 ≈ 66.8%
2022: SM = 81.46 − 27.42 = 54.04
SMR = (54.04 \ 81.46) * 100 ≈ 66.4%
2023: SM = 96.77 − 48.09 = 48.68
SMR = (48.68 \ 96.77) * 100 ≈ 50.3%
Degree of operating, financial and combined leverage:
DOL = Contribution margin \ Operating income
DFL = Operating income \ Earning before taxes
DCL = DOL * DFL
2020: DOL = 6.69 \ 2.59 ≈ 2.58
DFL = 2.59 \ 1.00 ≈ 2.59
DCL = 2.58 * 2.59 ≈ 6.69
2021: DOL = 13.60 \ 6.52 ≈ 2.09
DFL = 6.52 \ 6.50 ≈ 1.00
DCL = 2.09 * 1.00 ≈ 2.09
2022: DOL = 20.85 \ 13.65 ≈ 1.53
DFL = 13.65 \ 13.60 ≈ 1.00
DCL = 1.53 * 1.00 ≈ 1.53
2023: DOL = 17.66 \ 8.65 ≈ 2.04
DFL = 8.65 \ 9.80 ≈ 0.88
DCL = 2.04 * 0.88 ≈ 1.80
Required sales increase:
Net profit = 96.77 B – 79.11 B. = 17.66 B
Target net profit =17.66 B * 1.20 = 21.192 B
Additional profit required = 21.192 B – 17.66 B = 3.532 B
Required sales increase = additional profit \ CMR
RSI = 3.532 \ 0.182 = 19.41 B
Sources:
https://backlinko.com/tesla-stats
https://finance.yahoo.com/quote/TSLA/financials/?guccounter=1&guce_referrer=a
HR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAI7yw0MWTgCBSEUcn38Q9p1230JtnYIlRIlkP4NG12Do-_gG0FliXRJZJPaXAM2UwbTYsV_VRhQvDj8ty8BrnL5IYMoULYOUQ8uMA9LXzyNswy01npLZzOR1qAmA
V6zj0Xnt-CsR3NRvZhM-yguIQHYSc1BLUTh-nUd7UeQ4EH
https://ir.tesla.com/#other-documents-events
Julia Sadowska, Igor Pełka, Michał Szymczyk