Editing Tesla, Inc.

}}Tesla is on a mission to accelerate the world's transition to sustainable energy.<ref name=":3">https://www.tesla.com/about</ref>

The company sells and leases high-performance fully electric vehicles and energy generation and storage systems, and offers services related to its products. Tesla is an innovator that emphasises performance, attractive styling and the safety of its users in the design and manufacture of its products and is continuing to develop full self-driving technology for improved safety. The company also strives to lower the cost of ownership for its customers through continuous efforts to reduce manufacturing costs and by offering financial and other services tailored to its products.<ref name=":4">https://www.sec.gov/Archives/edgar/data/1318605/000156459021004599/tsla-10k_20201231.htm</ref>

The degree of risk associated with an investment in Tesla is 'high', with the shares having a beta that is 112% above the market (2.12 vs. 1).

==Strategy & outlook==

Currently, an estimated 85% of the world's energy needs are met by burning fossil fuels<ref>https://wedocs.unep.org/bitstream/handle/20.500.11822/30797/EGR2019.pdf?sequence=1&isAllowed=y</ref>, and energy production and consumption are responsible for 76% of annual human-caused greenhouse gas emissions.<ref>https://www.climatewatchdata.org/ghg-emissions?breakBy=sector&chartType=percentage&end_year=2018&sectors=total-including-lucf&start_year=1990</ref><ref>https://www.wri.org/insights/4-charts-explain-greenhouse-gas-emissions-countries-and-sectors</ref>

Tesla's mission is to accelerate the world's transition to sustainable energy. They aim to achieve this by designing and producing scalable energy generation and storage products, along with electric vehicles that run on clean energy sources like solar power and batteries. Subsequently their vision is that the world will adopt sustainable transport as means to address environmental challenges.

 

=== What are the company's values? ===

'''Sustainability:''' Tesla is committed to building sustainable systems that have a positive impact on the environment. They prioritize the use of renewable energy sources and focus on energy generation, storage, and transportation technologies that reduce carbon emissions.

 

'''Safety:''' Safety is a core value for Tesla. They design their electric vehicles with advanced safety features and aim to make them among the safest in the world. Additionally, they prioritize the safety of their products' users and the public.

 

'''Innovation''': Tesla takes a first-principles approach to problem-solving, seeking innovative solutions to global challenges related to engineering, manufacturing, and operations. They regularly introduce new features and improvements through over-the-air software updates.

 

'''Fun and Enjoyment:''' Beyond safety and sustainability, Tesla wants to make driving an enjoyable experience for their customers. They add features and entertainment options to make being in a Tesla vehicle a fun and engaging experience.

 

'''Vertical Integration:''' Tesla emphasizes vertical integration in their manufacturing processes, with a focus on in-house design, build, sales, and service. This approach allows them to control various aspects of production and maintain quality standards.

As of 11th August 2023, the company offers four main car models: Model S, Model 3, Model X and Model Y.

Model S is the fastest accelerating and longest ranging car that Tesla provides, with a zero-to-60 miles per hour acceleration of 3.1 seconds and a maximum distance range on a single battery charge of 405 miles, respectively.<ref>https://www.tesla.com/</ref> The price of the car in the US is $88,490 - $108,490.<ref name=":8" />

Model 3 is the lowest priced car that Tesla provides, selling in the US at $40,240 - $53,240<ref>https://www.tesla.com/model3</ref>.

 

Model X is the largest cargo capacity car that Tesla provides, with a cargo capacity of 88 cubic feet. The price of the car in the US is $98,490- $108,490<ref>https://www.tesla.com/modelx</ref>.

Model Y is the lowest price per cargo capacity and lowest price per seat car that Tesla provides, at $829 per cubic feet and $8,999 per seat, respectively. The price of the car in the US is $50,490 - $54,490<ref>tesla.com/modely</ref>.

! colspan="3" |Model Y

|style="background: orange; color: white;" |333 miles

| style="background: orange; color: white;" |149 miles per hour

| style="background: orange; color: white;" |149 miles per hour

|style="background: orange; color: white;" |149 miles per hour

| style="background: orange; color: white;" |92 cubic feet

|style="background: orange; color: white;" |92 cubic feet

| style="background: orange; color: white;" |$88,490

|style="background: orange; color: white;" |$108,490

| style="background: orange; color: white;" |$98,490

|style="background: red; color: white;" |$108,490

| style="background: green; color: white;" |$40,240

|style="background: orange; color: white;" |$47,240

|style="background: orange; color: white;" |$53,240

|$47,740

| style="background: orange; color: white;" |$52,990

|style="background: orange; color: white;" |$54,490

| style="background: orange; color: white;" |$3,160 per cubic feet

|style="background: red; color: white;" |$3,875 per cubic feet

| style="background: orange; color: white;" |$1,071 per cubic feet

|style="background: orange; color: white;" |$1,179 per cubic feet

| style="background: orange; color: white;" |$1,750 per cubic feet

|style="background: orange; color: white;" |$2,054 per cubic feet

|style="background: orange; color: white;" |$2,315 per cubic feet

|$628 per cubic feet

| style="background: green; color: white;" |$697 per cubic feet

|style="background: orange; color: white;" |$717 per cubic feet

| style="background: orange; color: white;" |$17,698 per seat

|style="background: red; color: white;" |$21,698 per seat

| style="background: orange; color: white;" |$14,070 per seat

|style="background: orange; color: white;" |$18,082 per seat

| style="background: orange; color: white;" |$8,048 per seat

|style="background: orange; color: white;" |$9,448 per seat

|style="background: orange; color: white;" |$10,648 per seat

|$9,548 per seat

| style="background: green; color: white;" |$7,570 per seat

|style="background: orange; color: white;" |$10,898 per seat

|The cargo capacity of the car is 92 cubic feet.

|The price of the car is $40,240.

|Model Y Standard

|The price per cargo capacity of the car is $628 per cubic feet.

|The price per seat of the car is $7,570 per seat.

Cybertruck is a truck, a motor vehicle designed to transport cargo, carry specialised payloads, or perform other utilitarian work. What will be unique about the offering is that it will be the safest vehicle that Tesla provides- combining both ultra-hard 30x cold-rolled stainless steel and Tesla Armor Glass. The price of the offering is expected to be $39,900.<ref>https://www.autoexpress.co.uk/tesla/cybertruck/96447/tesla-cybertruck-delayed-until-least-2023#:~:text=Tesla%20Cybertruck%3A%20performance%20and%20range&text=Entry%2Dlevel%2C%20Single%20Motor%2C,a%20top%20speed%20of%20110mph.</ref>

Tesla Semi is a semi-trailer truck, a motor vehicle that is designed to transport large cargo, via one or more of its attached trailers. What will be unique about the offering is that it will be the largest cargo capacity vehicle that Tesla provides. Moreover, operators will see approximate savings of $200,000 after three years because charging with electricity is cheaper than refueling with diesel. The price of the offering is around $150,000.

Powerwall is a energy storage system (i.e. a type of battery).<ref name=":4" /> What’s unique about the offering is that it's the lowest priced energy storage system that Tesla provides, selling at $10,500. The energy capacity of the product is 13.5 kilowatt hour (kWh). To help put the capacity into perspective, in 2020, the average household in the United States consumed 29 kWh per day.<ref>https://www.eia.gov/tools/faqs/faq.php?id=97&t=3#:~:text=How%20much%20electricity%20does%20an,about%20893%20kWh%20per%20month.</ref> So, if the average household is powered from Powerwalls only, then it will require around two Powerwalls to power the whole house, at an average annual cost of $2,247. Furthermore, Tesla offers its Powerwall buyers a $500 rebate for each Powerwall registered between June and October 2023.

=== Other current offerings ===

It's worth noting that 10 years earlier than the publication of the 2016 blog post, Elon Musk detailed the company's first master plan<ref name=":9" />, and the company has managed to achieve all of the milestones, which were as follows:

Elon Musk is the Chief Executive Officer of Tesla and has served the position since October 2008 and as a member of the Board since April 2004. Elon has also served as Chief Executive Officer, Chief Technology Officer and Chairman of Space Exploration Technologies Corporation, an advanced rocket and spacecraft manufacturing and services company (“SpaceX ”), since May 2002, and served as Chairman of the Board of SolarCity Corporation, a solar installation company, from July 2006 until its acquisition by Tesla in November 2016 and served as Chief Executive Officer of Twitter, Inc., a social media company, since October 2022. Elon is also a founder of The Boring Company, an infrastructure company, and of Neuralink Corp., a company focused on developing brain-machine interfaces. Prior to SpaceX, Elon co-founded PayPal, an electronic payment system, which was acquired by eBay in October 2002, and Zip2 Corporation, a provider of Internet enterprise software and services, which was acquired by Compaq in March 1999. Elon has also served on the board of directors of Endeavor Group Holdings, Inc. since April 2021. Elon holds a B.A. in physics from the University of Pennsylvania and a B.S. in business from the Wharton School of the University of Pennsylvania.

'''Joe Gebbia'''

Mr. Gebbia has been a member of the Board since 2022. Mr. Gebbia co-founded Airbnb, Inc. in 2008 and has served on Airbnb’s board of directors since 2009. In 2022, Mr. Gebbia launched Samara, which produces fully customized, factory-made homes designed to create rental income, house family, support work from home, or bundled together, to form new types of housing communities. Mr. Gebbia received dual degrees in Graphic Design and Industrial Design from the Rhode Island School of Design, where he currently serves on the institution’s Board of Trustees. Mr. Gebbia is the Chairman of Airbnb.org, and also serves on the Olympic Refuge Foundation and leadership councils for UNHCR, Tent.org and Malala Fund. Mr. Gebbia is a sought-after speaker on design and entrepreneurship, and has been named in Business Week’s Top 20 Best Young Tech Entrepreneurs, Inc. Magazine’s Thirty-under-Thirty, Fortune’s Forty-under-Forty, and one of Fast Company’s Most Creative People.

{| class="wikitable mw-collapsible"

|+Historic financials<ref>Source: Stockhub Limited</ref><ref group="Note" name="Note04" />

|'''Year end date'''||'''31/12/2005'''||'''31/12/2006<ref name=":12">{{cite web|url=https://www.mercurynews.com/2014/07/14/2006-san-carlos-start-up-tesla-seeks-sexier-electric-car/|title=2006: San Carlos start-up Tesla seeks sexier electric car|date=July 14, 2014}}</ref><ref name="SEC">{{cite web | url=https://www.sec.gov/edgar/browse/?CIK=1318605 | title=Tesla, Inc. TSLA on Nasdaq | publisher=[[U.S. Securities and Exchange Commission]]}}</ref>'''||'''31/12/2007'''||'''31/12/2008'''||'''31/12/2009'''

|'''31/12/2010<ref name="SEC" />'''

|'''31/12/2011<ref name="SEC" />'''

|'''31/12/2012<ref name="SEC" />'''

|'''31/12/2013<ref name="SEC" />'''

|'''31/12/2014<ref name="SEC" />'''

|'''31/12/2015<ref name="SEC" />'''

|'''31/12/2016<ref name="SEC" />'''

|'''31/12/2017<ref name="SEC" />'''

|'''31/12/2018<ref name="SEC" />'''

|'''31/12/2019<ref name="SEC" />'''

|'''31/12/2020<ref name="SEC" />'''

|'''31/12/2021<ref name="SEC" />'''

|'''31/12/2022'''

|-

| colspan="19" |<div style="text-align: center;">'''Income statement'''</div>

|Revenues ($'million)|| 0||0||0.073||15||112

|31,536

|Net profits ($'million)||style="color: red;" |-12||style="color: red;" |-30||style="color: red;" |-78||style="color: red;" |-83|| style="color: red;" |−56

|12,556

| colspan="19" |<div style="text-align: center;">'''Balance sheet'''</div>

|Total assets<br />($'million)

|1,114

|2,417

|5,831

|8,068

|22,664

|28,655

|29,740

|34,309

|52,148

|62,131

|82,338

|-

| colspan="19" |<div style="text-align: center;">'''Other'''</div>

|-

|Employees

|NA

|70

|268

|252

|514

|899

|1,417

|2,914

|5,859

|10,161

|13,058

|17,782

|37,543

|48,817

|48,016

|70,757

|99,290

|127,855

|}

 

 

{| class="wikitable"

|+Forward financials<ref>Source: Stockhub Limited</ref><ref group="Note" name="Note04" />

!31

!52

|'''Year end date'''||'''31/12/2022'''||'''31/12/2023'''||'''31/12/2024'''||'''31/12/2025'''||'''31/12/2026'''

|'''31/12/2044'''

|'''31/12/2045'''

|'''31/12/2046'''

|'''31/12/2047'''

|'''31/12/2048'''

|'''31/12/2049'''

|'''31/12/2050'''

|'''31/12/2051'''

|'''31/12/2052'''

|'''31/12/2053'''

|'''31/12/2054'''

|'''31/12/2055'''

|'''31/12/2056'''

|'''31/12/2057'''

|'''31/12/2062'''

|-

| colspan="43" |<div style="text-align: center;">'''Income statement'''</div>

|-

|Revenues ($'million)|| $78,935||$112,257||$154,816||$207,049||$268,527

|$337,721

|$411,894

|$487,157

|$558,739

|$621,448

|$670,282

|$701,078

|$711,102

|$699,445

|$667,163

|$617,116

|$553,551

|$481,510

|$406,171

|$332,253

|$263,564

|$202,749

|$151,247

|$109,414

|$76,757

|$52,217

|$34,448

|$22,038

|$13,673

|$8,226

|$4,799

|$2,715

|$1,490

|$793

|$409

|$205

|$99

|$47

|$21

|$9

|$4

|$2

|Gross profits ($'million)||$23,680||$33,677||$46,445||$62,115||$80,558

|$101,316

|$185,352

|$219,221

|$251,432

|$279,652

|$301,627

|$315,485

|$319,996

|$277,702

|$249,098

|$216,679

|$149,514

|$118,604

|$91,237

|$68,061

|$49,236

|$34,541

|$23,498

|Operating profits ($'million)||$11,840||$16,839||$23,222||$31,057||$40,279

|$50,658

|$123,568

|$146,147

|$167,622

|Net profits ($'million)||$9,354||$13,302||$18,346||$24,535|| $31,820

| colspan="3" | <div style="text-align: center;">'''Revenue'''</div>

|What's the estimated current size of the total addressable market?

|$2,975,000,000

|Here, the total addressable market (TAM) is defined as the global automotive market, and based on a number of assumptions<ref group="Note" name="Note01" />, it is estimated that the size of the market as of today (30th May 2022), in terms of revenue, is $2.975 trillion.

 

 

If the TAM is defined as the global energy market, then research suggests that the estimated size of the market is $6.777 trillion.<ref name=":16">https://www.ucl.ac.uk/bartlett/sustainable/sites/bartlett/files/an_exploration_of_energy_cost_ranges_limits_and_adjustment_process.pdf</ref>

|-

|What is the estimated company lifespan?

|60 years

|Tesla employs around 110,000, making the company a large organisation (more than 10,000 employees), and research shows that the average lifespan of a large corporation is around 50 years.<ref>Stadler, Enduring Success, 3–5.</ref>

|-

|What's the estimated annual growth rate of the total addressable market over the lifecycle of the company?

|3%

|Research shows that the growth rate of the global automotive market (i.e. the total addressable market) is similar to the growth rate of global gross domestic product<ref>http://www.robertpicard.net/files/econgrowthandadvertising.pdf</ref>, which has averaged (medium) around 3% per year in the last 20 years (2001 to 2022)<ref>https://www.macrotrends.net/countries/WLD/world/gdp-growth-rate</ref>.

|-

|What's the estimated company peak market share?

|10%

|The Stockhub users estimate that especially given the leadership of the company, the peak market share of Tesla is around 10%, and, therefore, suggests using the share amount here. As of 31st December 2021, Tesla's current share of the market is estimated at around 1.8%.

|-

|Which distribution function do you want to use to estimate company revenue?

|Gaussian

|Research suggests that the revenue pattern of companies is similar to the pattern produced by the Gaussian distribution function  (i.e. the revenue distribution is bell shaped)<ref>http://escml.umd.edu/Papers/ObsCPMT.pdf</ref>, so the Stockhub users suggest using that function here.

|-

|What's the estimated standard deviation of company revenue?

| 6 years

|Another way of asking this question is this way: within how many years either side of the mean does 68% of revenue occur? Based on Tesla's current revenue amount (i.e. $54 billion) and Tesla's estimated lifespan (i.e. 60 years) and Tesla's estimated current stage of its lifecycle (i.e. growth stage), the Stockhub users suggest using 6 years (i.e. 68% of all sales happen within 6 years either side of the mean year), so that's what's used here.

|-

| colspan="3" |'''<div style="text-align: center;">Growth stages</div>'''

|-

|How many main stages of growth is the company expected to go through?

| 4 stages

|Research suggests that a company typically goes through four distinct stages of cash flow growth.<ref>Levie J, Lichtenstein BB (2010) A terminal assessment of stages theory: Introducing a dynamic approach to entrepreneurship. Entrepreneurship: Theory & Practice 34(2): 317–350. <nowiki>https://doi.org/10.1111/j.1540-6520.2010.00377.x</nowiki></ref> Research also shows that incorporating those stages into the discounted cash flow model improves the quality of the model and, ultimately, the quality of the value estimation.<ref>Stef Hinfelaar et al.:, 2019.</ref>

 

 

|What proportion of the company lifecycle is represented by growth stage 1?

|Research suggests 30%.<ref name=":6">http://escml.umd.edu/Papers/ObsCPMT.pdf</ref>

|What proportion of the company lifecycle is represented by growth stage 2?

|10%

|Research suggests 10%.<ref name=":6" />

|-

| What proportion of the company lifecycle is represented by growth stage 3?

|20%

| Research suggests 20%.<ref name=":6" />

|-

|What proportion of the company lifecycle is represented by growth stage 4?

|40%

|Research suggests 40%.<ref name=":6" />

|-

| colspan="3" |'''<div style="text-align: center;">Growth stage 2</div>'''

|-

|Cost of goods sold as a proportion of revenue (%)

|79%

|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7">http://people.stern.nyu.edu/adamodar/pdfiles/papers/younggrowth.pdf</ref>, and the margin for its peers is 79%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.

|-

|Operating expenses as a proportion of revenue (%)

|15%

|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />, and the margin for its peers is 15%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.

|-

|Tax rate (%)

|11%

|Research suggests that it's best to use a similar rate as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />, and the rate for its peers is 11%.

|-

|Depreciation and amortisation as a proportion of revenue (%)

|7%

|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />, and the margin for its peers is 7%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.

|-

|Fixed capital as a proportion of revenue (%)

|10%

|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />, and the amount for its peers is 10%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.

|-

|Working capital as a proportion of revenue (%)

|15%

|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />, and the amount for its peers is 15%.

|-

|Net borrowing ($000)

|Zero

|Stockhub suggests that for simplicity, the net borrowing figure is zero.

|-

|Interest amount ($000)

|Zero

|Stockhub suggests that for simplicity, the interest amount figure is zero.

|-

| colspan="3" |'''<div style="text-align: center;">Growth stage 3</div>'''

|-

|Cost of goods sold as a proportion of revenue (%)

|62%

|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />, and the margin for its peers is 62%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.

|-

|Operating expenses as a proportion of revenue (%)

|13%

|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />, and the margin for its peers is 13%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.

|Tax rate (%)

|Research suggests that it's best to use a similar rate as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />, and the rate for its peers is 14%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.

|Depreciation and amortisation as a proportion of revenue (%)

|4%

|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />, and the amount for its peers is 4%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.

|Fixed capital as a proportion of revenue (%)  

|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />, and the amount for its peers is 3%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.

|Working capital as a proportion of revenue (%)

|10%  

|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the amount for its peers is 10%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.

|Net borrowing ($000)

|Zero

|The Stockhub users suggest that for simplicity, the net borrowing figure is zero.

|Interest amount ($000)

|Zero

|The Stockhub users suggest that for simplicity, the interest amount figure is zero.

| colspan="3" |'''<div style="text-align: center;">Growth stage 4</div>'''

|Cost of goods sold as a proportion of revenue (%)

|99%

|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the margin for its peers is 99%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.  

|Operating expenses as a proportion of revenue (%)

|15%

|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the margin for its peers is 15%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.

|Tax rate (%)

|0%

|Research suggests that it's best to use a similar rate as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the rate for its peers is 0%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.

|Depreciation and amortisation as a proportion of revenue (%)

|37%

|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the amount for its peers is 37%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.

|Fixed capital as a proportion of revenue (%)

| 1%

|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the amount for its peers is 1%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.

| 10%  

|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the amount for its peers is 10%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.

|The Stockhub users suggest that for simplicity, the net borrowing figure is zero.

|The Stockhub users suggest that for simplicity, the interest amount figure is zero.

|}

 

==Risks==

 

As with any investment, investing in Tesla carries a level of risk. Overall, based on the key risks highlighted below, the degree of risk associated with an investment in Tesla is high.

 

 

*Tesla may be impacted by macroeconomic conditions resulting from the global COVID-19 pandemic.

*Tesla may experience delays in launching and ramping the production of its products and features, or Tesla may be unable to control its manufacturing costs.

*Tesla may be unable to grow its global product sales, delivery and installation capabilities and its servicing and vehicle charging networks, or Tesla may be unable to accurately project and effectively manage its growth.

*Tesla's future growth and success is dependent upon consumers’ demand for electric vehicles and specifically its vehicles in an automotive industry that is generally competitive, cyclical and volatile.

*Tesla's suppliers may fail to deliver components according to schedules, prices, quality and volumes that are acceptable to us, or Tesla may be unable to manage these components effectively.

*Tesla may be unable to meet its projected construction timelines, costs and production ramps at new factories, or Tesla may experience difficulties in generating and maintaining demand for products manufactured there.

* Tesla will need to maintain and significantly grow its access to battery cells, including through the development and manufacture of its own cells, and control its related costs.

*Tesla faces strong competition for its products and services from a growing list of established and new competitors.

 

===Risks related to the company's operations===

 

*Tesla may experience issues with lithium-ion cells or other components manufactured at Gigafactory Nevada and Gigafactory Shanghai, which may harm the production and profitability of its vehicle and energy storage products.

*Tesla faces risks associated with maintaining and expanding its international operations, including unfavourable and uncertain regulatory, political, economic, tax and labour conditions.

*Tesla's business may suffer if its products or features contain defects, fail to perform as expected or take longer than expected to become fully functional.

*Tesla may be required to defend or insure against product liability claims.

*Tesla will need to maintain public credibility and confidence in its long-term business prospects in order to succeed.

*Tesla may be unable to effectively grow, or manage the compliance, residual value, financing and credit risks related to, its various financing programs.

*Tesla must manage ongoing obligations under its agreement with the Research Foundation for the State University of New York relating to its Gigafactory New York.

*If Tesla is unable to attract, hire and retain key employees and qualified personnel, its ability to compete may be harmed.

*Tesla is highly dependent on the services of Elon Musk, its Chief Executive Officer.

*Tesla's information technology systems or data, or those of its service providers or customers or users could be subject to cyber-attacks or other security incidents, which could result in data breaches, intellectual property theft, claims, litigation, regulatory investigations, significant liability, reputational damage and other adverse consequences.

*Any unauthorized control or manipulation of Tesla's products’ systems could result in loss of confidence in it and its products.

*Tesla's business may be adversely affected by any disruptions caused by union activities.

*Tesla may choose to or be compelled to undertake product recalls or take other similar actions.

*Tesla's current and future warranty reserves may be insufficient to cover future warranty claims.

*Tesla's insurance coverage strategy may not be adequate to protect it from all business risks.

*Tesla's debt agreements contain covenant restrictions that may limit its ability to operate its business.

*Additional funds may not be available to Tesla when it needs or want them.

*Tesla may be negatively impacted by any early obsolescence of its manufacturing equipment.

*Tesla holds and may acquire digital assets that may be subject to volatile market prices, impairment and unique risks of loss.

*There is no guarantee that Tesla will have sufficient cash flow from its business to pay its indebtedness or that it will not incur additional indebtedness.

*Tesla is exposed to fluctuations in currency exchange rates.

*Tesla may need to defend itself against intellectual property infringement claims, which may be time-consuming and expensive.

*Increased scrutiny and changing expectations from stakeholders with respect to the company's ESG practices may result in additional costs or risks.

* Tesla's operations could be adversely affected by events outside of its control, such as natural disasters, wars or health epidemics.

 

===Risks related to government laws and regulations=== 

 

* Demand for Tesla's products and services may be impacted by the status of government and economic incentives supporting the development and adoption of such products.

*Any failure by Tesla to comply with a variety of United States and international privacy and consumer protection laws may harm the company.

*Tesla could be subject to liability, penalties and other restrictive sanctions and adverse consequences arising out of certain governmental investigations and proceedings.

*Tesla may face regulatory challenges to or limitations on its ability to sell vehicles directly.

 

===Risks related to the ownership of the company's common stock=== 

 

*The trading price of Tesla's common stock is likely to continue to be volatile.

* Tesla's financial results may vary significantly from period to period due to fluctuations in its operating costs and other factors.

*Tesla may fail to meet its publicly announced guidance or other expectations about its business, which could cause its stock price to decline.

*Transactions relating to Tesla's convertible senior notes may dilute the ownership interest of existing stockholders, or may otherwise depress the price of its common stock.