Editing Tesla, Inc.
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[[File:Tesla logo.jpg|150px]] | |||
Helping to accelerate the world's transition to sustainable energy. | |||
{| class="wikitable" | |||
|+ Key information | |||
|- | |||
| Risk/return|| High | |||
|- | |||
| Price per share|| $663.90<ref name=":1">https://uk.finance.yahoo.com/quote/TSLA/profile?p=TSLA</ref> | |||
|- | |||
| Asset class|| Equities<ref name=":2">https://sec.report/CIK/0001318605#:~:text=Tesla%2C%20Inc.%20is%20incorporated%20in,motor%20vehicles%20%26%20passenger%20car%20bodies.</ref> | |||
|- | |||
| Industry|| Consumer Cyclical<ref name=":1" /> | |||
|- | |||
| Country of incorporation|| United States<ref name=":2" /> | |||
|- | |||
| Minimum investment amount|| $10 | |||
|- | |||
| Maximum investment amount|| $687.81 billion<ref name=":1" /> | |||
|- | |||
| Current valuation|| $687.81 billion<ref name=":1" /> | |||
|- | |||
| Investor type|| All | |||
|- | |||
| Bid/ask spread (%)|| 0.0015063% | |||
|- | |||
| Commission amount|| N/A | |||
|- | |||
| Market|| Public<ref name=":1" /> | |||
|} | |||
==Summary== | |||
* 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 designs, develops, manufactures, sells and leases high-performance fully electric vehicles and energy generation and storage systems, and offers services related to its products. It 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. It 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> | ||
* Based on a number of assumptions, the expected return of an investment in the company over the next five years is 72%. In other words, an £1,000 investment in the company is expected to return £1,720 in five years time. | |||
* The degree of risk associated with an investment in Tesla is 'high'. | |||
* | |||
==Operations== | ==Operations== | ||
=== How did the idea of the company come about? === | === How did the idea of the company come about? === | ||
The idea of the company came about when the | The idea of the company came about when the founding team realised that the current way that humankind is meeting its energy needs is unsustainable and bad for the environment.<ref name=":9">https://www.tesla.com/en_GB/blog/secret-tesla-motors-master-plan-just-between-you-and-me</ref> | ||
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 | 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§ors=total-including-lucf&start_year=1990</ref><ref>https://www.wri.org/insights/4-charts-explain-greenhouse-gas-emissions-countries-and-sectors</ref> | ||
Researching into a better way to meet the energy needs, the team concluded that the best way to do so is to move to a solar electric economy, from a mine-and-burn hydrocarbon economy.<ref name=":9" /> | Researching into a better way to meet the energy needs, the team concluded that the best way to do so is to move to a solar electric economy, from a mine-and-burn hydrocarbon economy.<ref name=":9" /> | ||
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==== Automotive ==== | ==== Automotive ==== | ||
The automotive segment includes the sales and leasing of electric vehicles as well as sales of automotive regulatory credits.<ref name=":4" /> Additionally, the automotive segment is also comprised of other services including non-warranty after-sales vehicle services, sales of used vehicles, retail merchandise, sales by the company's acquired subsidiaries to third party customers and vehicle insurance revenue.<ref name=":4" /> | The automotive segment includes the design, development, manufacturing, sales and leasing of electric vehicles as well as sales of automotive regulatory credits.<ref name=":4" /> Additionally, the automotive segment is also comprised of other services including non-warranty after-sales vehicle services, sales of used vehicles, retail merchandise, sales by the company's acquired subsidiaries to third party customers and vehicle insurance revenue.<ref name=":4" /> | ||
===== Current offerings ===== | ===== Current offerings ===== | ||
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'''Model S''' | '''Model S''' | ||
Model S is the fastest accelerating and longest ranging car that Tesla provides | Model S is the fastest accelerating and longest ranging car that Tesla provides.<ref>https://www.tesla.com/</ref> | ||
[[File:Model S.jpg|600px]] | |||
{| class="wikitable" | {| class="wikitable" | ||
|+ | |+Competition comparison | ||
!Category | !Category | ||
! | !Model S<ref name=":8">https://www.tesla.com/models</ref> | ||
!Model 3<ref>https://www.tesla.com/model3</ref> | |||
!Model X<ref>https://www.tesla.com/modelx</ref> | |||
!Model Y<ref>https://www.tesla.com/modely</ref> | |||
! | |||
! | |||
! | |||
|- | |- | ||
|Is the vehicle fully electric? | |Is the vehicle fully electric? | ||
| style="background: | | style="background: green; color: white;" |Yes | ||
| style="background: | | style="background: green; color: white;" |Yes | ||
| style="background: | | style="background: green; color: white;" |Yes | ||
|style="background: | | style="background: green; color: white;" |Yes | ||
|- | |- | ||
|What's the top acceleration of the vehicle? | |What's the top acceleration of the vehicle? | ||
| style="background: | | style="background: green; color: white;" |3.1 seconds | ||
|style="background: | | style="background: red; color: white;" |5.8 seconds | ||
| style="background: orange; color: white;" |3.8 seconds | | style="background: orange; color: white;" |3.8 seconds | ||
| style="background: orange; color: white;" |4.8 seconds | | style="background: orange; color: white;" |4.8 seconds | ||
|- | |- | ||
|What's the maximum distance range of the vehicle on a single battery charge? | |What's the maximum distance range of the vehicle on a single battery charge? | ||
| style="background: green; color: white;" |405 miles | | style="background: green; color: white;" |405 miles | ||
|style="background: | | style="background: red; color: white;" |272 miles | ||
| style="background: orange; color: white;" |348 miles | | style="background: orange; color: white;" |348 miles | ||
| style="background: orange; color: white;" |330 miles | | style="background: orange; color: white;" |330 miles | ||
|- | |- | ||
|What's the top speed of the vehicle? | |What's the top speed of the vehicle? | ||
| style="background: green; color: white;" |155 miles per hour | |||
|style="background: green | |||
| style="background: orange; color: white;" |140 miles per hour | | style="background: orange; color: white;" |140 miles per hour | ||
|style="background: | | style="background: green; color: white;" |155 miles per hour | ||
| style="background: red; color: white;" |135 miles per hour | | style="background: red; color: white;" |135 miles per hour | ||
|- | |- | ||
|Which design type is the vehicle? | |Which design type is the vehicle? | ||
| style="background: | | style="background: green; color: white;" |Sedan (i.e. car) | ||
|style="background: | | style="background: green; color: white;" |Sedan (i.e. car) | ||
| style="background: | | style="background: green; color: white;" |SUV (i.e. car) | ||
|style="background: | | style="background: green; color: white;" |SUV (i.e. car) | ||
|- | |- | ||
|What is the safety rating of the vehicle? | |What is the safety rating of the vehicle? | ||
| style="background: | | style="background: green; color: white;" |5 out of 5 stars | ||
|style="background: | | style="background: green; color: white;" |5 out of 5 stars | ||
| style="background: | | style="background: green; color: white;" |5 out of 5 stars | ||
|style="background: | | style="background: green; color: white;" |5 out of 5 stars | ||
|- | |- | ||
|How many seats does the vehicle have? | |How many seats does the vehicle have? | ||
| style="background: red; color: white;" |5 seats | | style="background: red; color: white;" |5 seats | ||
| style="background: red; color: white;" |5 seats | | style="background: red; color: white;" |5 seats | ||
|style="background: | | style="background: green; color: white;" |7 seats | ||
| style="background: green; color: white;" |7 seats | |||
| style="background: | |||
|- | |- | ||
|What's the cargo capacity of the vehicle? | |What's the cargo capacity of the vehicle? | ||
| style="background: | | style="background: orange; color: white;" |28 cubic feet | ||
| style="background: red; color: white;" |23 cubic feet | | style="background: red; color: white;" |23 cubic feet | ||
|style="background: | | style="background: green; color: white;" |88 cubic feet | ||
|style="background: | | style="background: orange; color: white;" |76 cubic feet | ||
|- | |- | ||
|Which drive wheel does the vehicle have? | |Which drive wheel does the vehicle have? | ||
| style="background: | | style="background: green; color: white;" |All-wheel drive | ||
| style="background: red; color: white;" |Rear-wheel drive | | style="background: red; color: white;" |Rear-wheel drive | ||
|style="background: | | style="background: green; color: white;" |All-wheel drive | ||
|style="background: | | style="background: green; color: white;" |All-wheel drive | ||
|- | |- | ||
|What's the price of the vehicle? | |What's the price of the vehicle? | ||
| style="background: orange; color: white;" |$99,990 | | style="background: orange; color: white;" |$99,990 | ||
| style="background: green; color: white;" |$46,990 | | style="background: green; color: white;" |$46,990 | ||
|style="background: | | style="background: red; color: white;" |$114,990 | ||
| style="background: orange; color: white;" |$62,990 | | style="background: orange; color: white;" |$62,990 | ||
|- | |- | ||
|What's the vehicle's price per cargo capacity? | |What's the vehicle's price per cargo capacity? | ||
| style="background: | | style="background: red; color: white;" |$3,571 per cubic feet | ||
|style="background: | | style="background: orange; color: white;" |$2,043 per cubic feet | ||
| style="background: orange; color: white;" |$1,307 per cubic feet | | style="background: orange; color: white;" |$1,307 per cubic feet | ||
| style="background: green; color: white;" |$829 per cubic feet | | style="background: green; color: white;" |$829 per cubic feet | ||
|- | |- | ||
|What's the vehicle's price per | |What's the vehicle's price per passenger? | ||
| style="background: | | style="background: red; color: white;" |$19,998 per passenger | ||
| style="background: orange; color: white;" |$9,398 per passenger | |||
| style="background: orange; color: white;" |$16,427 per passenger | |||
| style="background: green; color: white;" |$8,999 per passenger | |||
| style="background: orange; color: white;" |$9,398 per | |||
|style="background: orange; color: white;" |$ | |||
| style="background: green; color: white;" |$8,999 per | |||
|} | |} | ||
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!Category | !Category | ||
!Winner | !Winner | ||
|- | |- | ||
|Which Tesla car has the fastest acceleration? | |Which Tesla car has the fastest acceleration? | ||
|Model S | |Model S | ||
|- | |- | ||
|Which Tesla car has the longest range? | |Which Tesla car has the longest range? | ||
|Model S | |Model S | ||
|- | |- | ||
|Which Tesla car has the largest cargo capacity? | |Which Tesla car has the largest cargo capacity? | ||
|Model X | |Model X | ||
|- | |- | ||
|Which Tesla car is the lowest priced? | |Which Tesla car is the lowest priced? | ||
|Model 3 | |Model 3 | ||
|- | |- | ||
|Which Tesla car has the lowest price per cargo capacity? | |Which Tesla car has the lowest price per cargo capacity? | ||
|Model Y | |Model Y | ||
|- | |- | ||
|Which Tesla car has the lowest price per | |Which Tesla car has the lowest price per passenger? | ||
|Model Y | |Model Y | ||
|} | |} | ||
<u>What is the price of the offering?</u> | |||
The price of the car in the US is $99,990.<ref name=":8" /> | |||
The | |||
'''Model 3''' | |||
Model 3 is the lowest priced car that Tesla provides. | |||
<u>Service</u> | [[File:Rhd-model-3-social.png|600px]] | ||
<u>What is the price of the offering?</u> | |||
The price of the car in the US is $46,990. | |||
'''Model X''' | |||
Model X is the largest cargo capacity car that Tesla provides. | |||
[[File:MX-Hero-Desktop.jpg|600px]] | |||
<u>What is the price of the offering?</u> | |||
The price of the car in the US is $114,990. | |||
'''Model Y''' | |||
Model Y is the lowest price per cargo capacity and lowest price per passenger car that Tesla provides. | |||
[[File:Model y red.jpg|600px]] | |||
<u>What is the price of the offering?</u> | |||
The price of the car in the US is $62,990. | |||
====== Automotive leasing ====== | |||
Tesla offers leasing and/or loan financing arrangements for its vehicles in certain jurisdictions in North America, Europe and Asia. Under certain programs, the company provides resale value guarantees or buyback guarantees, enabling customers to sell their vehicles back to the company at certain points in time at pre-determined amounts.<ref name=":4" /> | |||
====== Regulatory credits ====== | |||
The company earns tradable credits in the operation of its business under various regulations related to zero-emission vehicles, greenhouse gas, fuel economy and clean fuel. It sells those credits to other regulated entities that can use the credits to comply with emission standards and other regulatory requirements.<ref name=":4" /> | |||
====== Other current offerings ====== | |||
'''Service and warranty''' | |||
<u>Service</u> | |||
Other offerings include the servicing of Tesla vehicles, at company-owned service locations and through Tesla Mobile Service technicians.<ref name=":4" /> | Other offerings include the servicing of Tesla vehicles, at company-owned service locations and through Tesla Mobile Service technicians.<ref name=":4" /> | ||
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'''Cybertruck''' | '''Cybertruck''' | ||
<u>What is the offering?</u> | |||
Cybertruck is a truck, a motor vehicle designed to transport cargo, carry specialised payloads, or perform other utilitarian work. | |||
[[File:Cybertruck-Hero-Desktop.jpg|600px]] | |||
<u>What’s unique about the offering?</u> | |||
Cybertruck will be the safest vehicle that Tesla provides. | |||
<u>What is the price of the offering?</u> | |||
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 Roadster''' | |||
<u>What is the offering?</u> | |||
The Tesla Roadster is a car. | |||
[[File:Tesla-roadster.jpg|600px]] | |||
<u>What’s unique about the offering?</u> | |||
Roadster will be the fastest accelerating and longest ranging car that Tesla provides. | |||
<u>What is the price of the offering?</u> | |||
The price of the offering is around $200,000.<ref>https://carbuzz.com/cars/tesla/roadster</ref> | |||
'''Tesla Semi''' | |||
<u>What is the offering?</u> | |||
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. | |||
[[File: | [[File:Tesla-semi.jpg|600px]] | ||
<u>What’s unique about the offering?</u> | |||
What makes the vehicle unique is that it will be the largest cargo capacity vehicle that Tesla provides. | |||
<u>What is the price of the offering?</u> | |||
The price of the offering is around $150,000. | |||
====== | ======Ride-hailing service====== | ||
<u>What is the offering?</u> | |||
Tesla has said that it intends to establish an autonomous Tesla ride-hailing network, enabling people to hail a ride.<ref name=":4" /> | |||
<u>What’s unique about the offering?</u> | |||
What's unique about the ride-hailing service is that it's expected to be faster and cheaper than the alternatives. | |||
<u>What is the price of the offering?</u> | |||
Information about the expected price of the service has yet to be disclosed. | |||
====Energy generation and storage ==== | |||
The energy generation and storage segment includes the design, manufacture, installation, sales and leasing of solar energy generation and energy storage products and related services and sales of solar energy systems incentives.<ref name=":4" /> | |||
=====Current offerings ===== | |||
=== | ======Energy generation and storage sales====== | ||
'''Powerwall''' | |||
<u>What is the offering?</u> | |||
Powerwall is a energy storage system (i.e. a type of battery).<ref name=":4" /> | |||
[[File:Powerwall2.jpg|600px]] | |||
<u>What’s unique about the offering?</u> | |||
Powerwall is the lowest priced energy storage system that Tesla provides. | |||
{| class="wikitable" | |||
|+Competition comparison | |||
|- | |||
! !!Powerwall!!'''Megapack''' | |||
|- | |||
|Is the source of energy solar?||style="background: green; color: white;" |Yes||style="background: green; color: white;" |Yes | |||
|- | |||
|Is it designed for houses (i.e. smaller electricity demand)?||style="background: green; color: white;" |Yes||style="background: red; color: white;" |No | |||
|- | |||
|Is it designed for commercial buildings (i.e. greater electricity demand)?||style="background: red; color: white;" |No|| style="background: green; color: white;" |Yes | |||
|} | |||
<u>What is the price of the offering?</u> | |||
A single Powerwall sells for $10,500. | |||
'''Megapack''' | |||
<u>What is the offering?</u> | |||
= | Megapack is an energy storage system.<ref name=":4" /> | ||
[[File:Megapack-CleanerGrid-D.jpg|600px]] | |||
<u>What’s unique about the offering?</u> | |||
Tesla | Megapack is the largest energy storage system that Tesla provides. | ||
<u>What is the price of the offering?</u> | |||
A single Megapack sells for $1,000,000. | |||
'''Solar Roof''' | |||
<u>What is the offering?</u> | |||
Solar Roof is a roof tile.<ref name=":4" /> | |||
[[File:5c603e0d86d2c7c005d1df44a jVVOsV8.jpg|600px]] | |||
<u>What’s unique about the offering?</u> | |||
What makes the tile unique is that it's the most aesthetically-beautiful, energy generation roof tile. In other words, it's the most beautiful roof tile that generates electricity. | |||
{| class="wikitable" | |||
|+Competition comparison | |||
|- | |||
! !!Solar Roof!!Traditional roof tile | |||
!Other solar-energy generation roof tile | |||
|- | |||
|Does it generate electricity?|| style="background: green; color: white;" |Yes|| style="background: red; color: white;" |No | |||
| style="background: green; color: white;" |Yes | |||
|- | |||
|Is it aesthetically beautiful?|| style="background: green; color: white;" |Yes|| style="background: green; color: white;" |Yes | |||
| style="background: red; color: white;" |No | |||
|} | |||
<u>What is the price of the offering?</u> | |||
There is no information on the price of the offering within the public domain. | |||
====== Other current offerings ====== | |||
'''Service and Warranty''' | |||
Other offerings include servicing and repairs, and extended limited warranties in certain regions.<ref name=":4" /> | |||
'''Financial services''' | |||
Tesla offers certain loan and power purchase agreement (PPA) options to residential or commercial customers who pair energy storage systems with solar energy systems.<ref name=":4" /> The company offers certain financing options to its solar customers, which enable the customer to purchase and own a solar energy system, Solar Roof or integrated solar and Powerwall system.<ref name=":4" /> Its solar PPAs, offered to commercial customers, charges a fee per kilowatt-hour based on the amount of electricity produced by its solar energy systems.<ref name=":4" /> | |||
Note: a PPA is a contract between two parties, one which generates electricity (the seller) and one which is looking to purchase electricity (the buyer). The agreement defines all of the commercial terms for the sale of electricity between the two parties, including when the project will begin commercial operation, schedule for delivery of electricity, penalties for under delivery, payment terms, and termination. | |||
=== | ===From which place(s) are the offerings able to be purchased?=== | ||
'' | The main places that the offerings are able to be purchased is through the company's website (at www.tesla.com) and company's stores, which is estimated at around 400 stores in more than 35 countries. | ||
===From which place(s) are the offerings promoted?=== | |||
The main way that Tesla promotes the offering is through media coverage and word of mouth. | |||
=== What's the strategy of the company? === | |||
According to a blog post in which the CEO of Tesla detailed the company's updated master plan, the strategy of Tesla consists of four main milestones: | |||
' | # Create stunning solar roofs with seamlessly integrated battery storage; | ||
# Expand the electric vehicle product line to address all major segments; | |||
# Develop a self-driving capability that is 10X safer than manual via massive fleet learning; and | |||
# Enable your car to make money for you when you aren't using it. | |||
== Market== | |||
===Total Addressable Market === | |||
Here, the total addressable market (TAM) is defined as the global automotive market, and based on a number of assumptions, it is estimated that the size of the market as of today (30th May 2022), in terms of revenue, is $3.0 trillion. | |||
===Serviceable Available Market=== | |||
Here, the serviceable available market (SAM) is defined as the global car market, and based on a number of assumptions, it is estimated that the size of the market as of today (30th May 2022), in terms of revenue, is $1.0 trillion. | |||
===Serviceable Obtainable Market=== | |||
Here, the serviceable obtainable market (SOM) is defined as the US car market, and based on a number of assumptions, it is estimated that the size of the market as of today (30th May 2022), in terms of revenue, is $262 billion. | |||
== Competition== | |||
===Automotive=== | |||
Tesla believes that its vehicles compete in the market both based on their traditional segment classification as well as based on their propulsion technology. For example, Model S and Model X compete primarily with premium sedans and premium SUVs, and Model 3 and Model Y compete with small to medium-sized sedans and compact SUVs, which are extremely competitive markets. Competing products typically include internal combustion vehicles from more established automobile manufacturers; however, many established and new automobile manufacturers have entered or have announced plans to enter the market for electric and other alternative fuel vehicles. Many major automobile manufacturers have electric vehicles available today in major markets including the US, China and Europe, and other current and prospective automobile manufacturers are also developing electric vehicles. In addition, several manufacturers offer hybrid vehicles, including plug-in versions. | |||
Tesla also believes that there is increasing competition for its vehicle offerings as a platform for delivering self-driving technologies, charging offerings and other features and services, and it expects to compete in this developing market through continued progress on its autopilot, full self-driving and neural network capabilities, Supercharger network and its infotainment offerings. | |||
===Energy generation and storage=== | |||
====Energy Storage Systems==== | |||
' | The market for energy storage products is also highly competitive, and both established and emerging companies have introduced products that are similar to Tesla's product portfolio or that are alternatives to the elements of its systems. Tesla competes with these companies based on price, energy density and efficiency. Tesla believes that the things that give it a competitive advantage in its markets are: the specifications and features of its products, its strong brand and the modular, scalable nature of its energy storage products. | ||
====Solar Energy Systems==== | |||
The primary competitors to its solar energy business are the traditional local utility companies that supply energy to Tesla's potential customers. Tesla competes with these traditional utility companies primarily based on price and the ease by which customers can switch to electricity generated by Tesla's solar energy systems. Tesla also competes with solar energy companies that provide products and services similar to it. Many solar energy companies only install solar energy systems, while others only provide financing for these installations. | |||
==Team == | |||
===Leadership=== | |||
====Chief Executive Officer==== | |||
[[File:Elon Musk Royal Society (crop2).jpg|200px]] | |||
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. 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. | |||
====Chief Financial Officer==== | |||
[[File: | [[File:Zachary Kirkhorn.jpg|200px]] | ||
Zachary Kirkhorn is Chief Financial Officer of Tesla and served the position since March 2019. Previously, Zach served in various finance positions continuously since joining Tesla in March 2010, other than between August 2011 and June 2013 during which he attended business school, including most recently as Vice President, Finance, Financial Planning and Business Operations from December 2018 to March 2019. Zach holds dual B.S.E. degrees in economics and mechanical engineering and applied mechanics from the University of Pennsylvania and an M.B.A. from Harvard University. | |||
== | ====Senior Vice President==== | ||
[[File:Drew.jpg|200px]] | |||
=== | Andrew Baglino has served as Tesla's Senior Vice President, Powertrain and Energy Engineering since October 2019. Previously, Drew served in various engineering positions continuously since joining Tesla in March 2006. Drew holds a B.S. in electrical engineering from Stanford University. | ||
===Board of Directors=== | |||
For information about Elon Musk, see "Chief Executive Officer" section above. | |||
'''Robyn M. Denholm''' | |||
[[File:894px-2018-05-16-cebit-robyn-m-denholm-portrait.jpg|200px]] | |||
Robyn M. Denholm has served as a director since August 2014 and as Chair since November 2018. Since January 2021, Ms. Denholm has been an operating partner of Blackbird Ventures, a venture capital firm. From January 2017 through June 2019, Ms. Denholm was with Telstra Corporation Limited, a telecommunications company, as Chief Financial Officer and Head of Strategy from October 2018 through June 2019, and Chief Operations Officer from January 2017 to October 2018. Prior to Telstra, from August 2007 to February 2016, Ms. Denholm was with Juniper Networks, Inc., a manufacturer of networking equipment (“Juniper”), serving first as its Executive Vice President and Chief Financial Officer and then as its Executive Vice President and Chief Financial and Operations Officer. Prior to joining Juniper, Ms. Denholm served in various executive roles at Sun Microsystems, Inc. from January 1996 to August 2007. Ms. Denholm also served at Toyota Motor Corporation Australia for seven years and at Arthur Andersen & Company for five years in various finance assignments. Ms. Denholm is a Fellow of the Institute of Chartered Accountants of Australia/New Zealand, a member of the Australian Institute of Company Directors, and holds a Bachelor’s degree in Economics from the University of Sydney and a Master’s degree in Commerce and a Doctor of Business Administration (honoris causa) from the University of New South Wales. | |||
'''Ira Ehrenpreis''' | |||
[[File:1516155738122.jpg|200px]] | |||
Ira Ehrenpreis is Founder and Managing Partner of DBL Partners, a leading impact investing venture capital firm, currently managing more than $1 billion of capital. DBL invests in companies that can deliver top-tier financial returns, while simultaneously driving social or environmental change. | |||
Ira is a recognized leader in the venture capital industry, having served on the Board, Executive Committee, and as Annual Meeting Chairman of the National Venture Capital Association (NVCA). He currently serves as the President of the Western Association of Venture Capitalists (WAVC) and as the Chairman of the VCNetwork, the largest and most active California venture capital organization. | |||
Ira was awarded the 2018 NACD Directorship 100 for being “one of the most influential leaders in the boardroom and corporate governance community.” In 2007, he was named one of the “Top 50 Most Influential Men Under 45" and in 2014 was inducted into the International Green Industry Hall of Fame. | |||
Ira has served for several years as the Chairman of the Silicon Valley Technology Innovation & Entrepreneurship Forum (SVIEF). He is the Founder and Chairman of one of the most prominent annual energy innovation industry events, the World Energy Innovation Forum (WEIF), which has convened the who's-who in the industry to discuss the important energy issues and opportunities of our time. In addition, Ira has served on several industry Boards, including the Department of Energy’s (DOE) Energy Efficiency and Renewable Energy Advisory Committee (ERAC), the National Renewable Energy Laboratory (NREL) Advisory Council, the Clean-Tech Investor Summit (Chairman), the Renewable Energy Finance Forum (REFF) West (Co-Chairman), the Renewable Energy Finance Forum (REFF) Wall Street (Co-Chairman), the Cleantech Venture Network (Past Chairman of Advisory Board), and ACORE (American Council on Renewable Energy). | |||
Ira has served as the Chairman of the Silicon Valley Technology Innovation & Entrepreneurship Forum (SVIEF) for many years. He is also an active leader at Stanford University, where he has served on the Board of Visitors of Stanford Law School and is currently an advisory board member of the Stanford Global Climate and Energy Project (GCEP) and the Stanford Precourt Institute for Energy (PIE) Advisory Council. Ira has also been a guest lecturer, including helping to teach a course on Venture Capital. In addition, Ira served for many years on the Advisory Board of the Forum for Women Entrepreneurs (FWE). | |||
Ira received his JD/MBA from Stanford Graduate School of Business and Stanford Law School, where he was an Associate Editor of Stanford Law Review. He holds a B.A. from the University of California, Los Angeles, graduating Phi Beta Kappa and Summa Cum Laude. | |||
'''Larry Ellison''' | |||
[[File:1029px-Larry Ellison picture.png|200px]] | |||
Lawrence J. Ellison has been a member of the Board since December 2018. Mr. Ellison is the founder of Oracle Corporation, a software and technology company, has served as its Chief Technical Officer since September 2014 and previously served as its Chief Executive Officer from June 1977 to September 2014. Mr. Ellison has also served on Oracle’s board of directors since June 1977, including as its Chairman since September 2014 and previously from May 1995 to January 2004. | |||
'''Hiro Mizuno''' | |||
[[File:9H 8h7tW40QNtdH1Y ZsVOj-lnmRMD4R2MAuxy1ajM.jpg|200px]] | |||
Hiromichi Mizuno has been a member of Board since April 2020. Since January 2021, Mr. Mizuno has served as the United Nations Special Envoy on Innovative Finance and Sustainable Investments. From January 2015 to March 2020, Mr. Mizuno served as Executive Managing Director and Chief Investment Officer of Japan’s Government Pension Investment Fund, the largest pension fund in the world. Previously, Mr. Mizuno was a partner at Coller Capital, a private equity firm, from 2003. In addition to being a career-long finance and investment professional, Mr. Mizuno has served as a board member of numerous business, government and other organizations, currently including the Mission Committee of Danone S.A., a global food products company, and the World Economic Forum’s Global Future Council. Mr. Mizuno is also involved in academia, having been named to leadership or advisory roles at Harvard University, Oxford University, University of Cambridge, Northwestern University and Osaka University. Mr. Mizuno holds a B.A. in Law from Osaka City University and an M.B.A. from the Kellogg Graduate School of Management at Northwestern University. | |||
'''James Murdoch''' | |||
[[File:James Murdoch 2008- NRKbeta.jpg|200px]] | |||
James Murdoch has been a member of the Board since July 2017. Since March 2019, Mr. Murdoch has been the Chief Executive Officer of Lupa Systems, a private investment company that he founded. Previously, Mr. Murdoch held a number of leadership roles at Twenty-First Century Fox, Inc. (“21CF”), a media company, over two decades, including its Chief Executive Officer from 2015 to March 2019, its Co-Chief Operating Officer from 2014 to 2015, its Deputy Chief Operating Officer and Chairman and Chief Executive Officer, International from 2011 to 2014 and its Chairman and Chief Executive, Europe and Asia from 2007 to 2011. Previously, he served as the Chief Executive Officer of Sky plc from 2003 to 2007, and as the Chairman and Chief Executive Officer of STAR Group Limited, a subsidiary of 21CF, from 2000 to 2003. Mr. Murdoch also formerly served on the boards of News Corporation from 2013 to July 2020, of 21CF from 2017 to 2019, of Sky plc from 2016 to 2018, of GlaxoSmithKline plc from 2009 to 2012 and of Sotheby’s from 2010 to 2012. | |||
'''Kimbal Musk''' | |||
[[File:771px-KIMBAL MUSK OFFICIAL HEADSHOT.jpg|200px]] | |||
Kimbal Musk is Co-Founder of The Kitchen, a growing family of businesses that pursues an America where everyone has access to real food. Kimbal is a 2017 Social Entrepreneur by the Schwab Foundation, a sister organization to the World Economic Forum, for his impactful, scalable work to bring Real Food to Everyone. | |||
His family of restaurant concepts serve real food at every price point. They source food from American farmers, stimulating the local farm economy to the tune of millions of dollars a year. His non-profit organization builds permanent, outdoor Learning Garden classrooms in underserved schools around the U.S. reaching over 125,000 students everyday. His urban, indoor vertical farming accelerator, seeks to empower thousands of young entrepreneurs to become real food farmers. | |||
Kimbal is on the board for Chipotle, Tesla, and SpaceX. | |||
'''Kathleen Wilson-Thompson''' | |||
[[File:Kathleen-Wilson-Thompson-Most-Influential-HR-Leader.jpg|200px]] | |||
Kathleen Wilson-Thompson has been a member of the Board since December 2018. Ms. Wilson-Thompson previously served as Executive Vice President and Global Chief Human Resources Officer of Walgreens Boots Alliance, Inc., a global pharmacy and wellbeing company, from December 2014 to January 2021, and as Senior Vice President and Chief Human Resources Officer from January 2010 to December 2014. Prior to Walgreens, Ms. Wilson-Thompson held various legal and operational roles at The Kellogg Company, a food manufacturing company, from July 2005 to December 2009, including most recently as its Senior Vice President, Global Human Resources. Ms. Wilson-Thompson also serves on the boards of directors of Wolverine World Wide, Inc. Ms. Wilson-Thompson holds an A.B. in English Literature from the University of Michigan and a J.D. and L.L.M. (Corporate and Finance Law) from Wayne State University. | |||
==Financials== | |||
=== Historic === | |||
For the fiscal (and calendar) year 2021, Tesla reported a net income of $5.52 billion.<ref name="Tesla4Q2021final" /> The annual revenue was $53.8 billion, an increase of 71% over the previous fiscal year.<ref name="Tesla4Q2021final" /> | |||
Tesla ended 2020 with over $19 billion of cash on hand after having raised approximately $12 billion in stock sales.<ref name=bb20210208 /> At the end of 2019 it had $6.3 billion cash on hand.<ref name=ars20210128 /> | |||
Of the revenue number in 2021, $314 million came from selling regulatory credits to other automakers to meet government pollution standards. That number has been a smaller percentage of revenue for multiple quarters.<ref name=Tesla4Q2021final /> In Q1 2022, Tesla sold $679 million of regulatory carbon credits.<ref>{{Cite news |date= |title=Tesla Carbon Credit Sales Jump by 116% |work=CarbonCredits.com |url=https://carboncredits.com/tesla-regulatory-carbon-credit-sales-jumps-116/}}</ref> | |||
In February 2021, a 10-K filing revealed that Tesla had invested some $1.5 billion in the cryptocurrency Bitcoin, and the company indicated it would soon accept Bitcoin as a form of payment.<ref name="bb20210208">{{cite news |title=Tesla Bets on Bitcoin in Blue-Chip Boost to Cryptocurrency |url=https://www.bloomberg.com/news/articles/2021-02-08/tesla-bets-1-5-billion-on-bitcoin-in-new-policy-crypto-surges |work=[[Bloomberg News|Bloomberg]] |date=February 8, 2021 |access-date=February 8, 2021 }}</ref> Tesla made more profit from the 2021 investment than the profit from selling cars in 2020, due to the Bitcoin price increase after the investment was announced.<ref>{{Cite news|last=Correspondent|first=James Dean, Chief Business|title=Tesla made more profit from bitcoin in a month than from selling cars last year|newspaper=[[The Times]]|language=en|url=https://www.thetimes.co.uk/article/tesla-made-more-profit-from-bitcoin-in-a-month-than-from-selling-cars-last-year-5sfl6qd0h|access-date=February 19, 2021|issn=0140-0460}}</ref><ref>{{cite web|title=Tesla May Have Already Made More In Profits From Bitcoin Than Electric Vehicles|url=https://finance.yahoo.com/news/tesla-may-already-made-more-224537165.html|access-date=February 19, 2021|website=finance.yahoo.com|language=en-US}}</ref> | |||
The quarter ending June 2021 was the first time Tesla made a profit independent of Bitcoin and regulatory credits.<ref>{{cite web|last=O'Kane|first=Sean|date=July 26, 2021|title=Tesla finally made a profit without the help of emission credits|url=https://www.theverge.com/2021/7/26/22594778/tesla-q2-2021-earnings-revenue-profit-credits-emissions-bitcoin|access-date=October 22, 2021|website=The Verge|language=en}}</ref> | |||
{| class="wikitable" style="text-align:right;" | |||
|- | |||
!Year | |||
!Revenue<br />(mil. USD) | |||
!Net income<br />(mil. USD) | |||
!Total assets<br />(mil. USD) | |||
!Employees | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
|' | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
|- | |||
|- | |- | ||
| | |align=left|2005 | ||
| 0 | |||
| -12 | |||
| 8 | |||
| | | | ||
|- | |- | ||
| | |align=left|2006<ref>{{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 /> | ||
| | | 0 | ||
| | | -30 | ||
| | | 44 | ||
| | | 70 | ||
| | |- | ||
| | |align=left|2007 | ||
| | |0.073 | ||
| | | -78 | ||
| | | 34 | ||
| | | 268 | ||
| | |- | ||
| | |align=left|2008 | ||
| | | 15 | ||
| | | -83 | ||
| | | 52 | ||
| | | 252 | ||
| | |- | ||
| | |align=left|2009 | ||
| | | 112 | ||
| | | −56 | ||
| | | 130 | ||
| | | 514 | ||
| | |- | ||
| | |align=left|2010<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> | ||
| | | 117 | ||
| | | −154 | ||
| | | 386 | ||
| | | 899 | ||
| | |- | ||
| | |align=left|2011<ref name=SEC /> | ||
| | | 204 | ||
| | | −254 | ||
| | | 713 | ||
| | |1,417 | ||
| | |- | ||
| | |align=left|2012<ref name=SEC /> | ||
| | |413 | ||
| | | −396 | ||
| | |1,114 | ||
| | |2,914 | ||
| | |- | ||
| | |align=left|2013<ref name=SEC /> | ||
| | |2,013 | ||
| | | −74 | ||
| | |2,417 | ||
| | |5,859 | ||
| | |- | ||
| | |align=left|2014<ref name=SEC /> | ||
| | |3,198 | ||
| | | −294 | ||
| | |5,831 | ||
| | |10,161 | ||
| | |- | ||
| | |align=left|2015<ref name=SEC /> | ||
| | |4,046 | ||
| | | −889 | ||
| | |8,068 | ||
| | |13,058 | ||
| | |- | ||
| | |align=left|2016<ref name=SEC /> | ||
|7,000 | |||
| −675 | |||
|22,664 | |||
|17,782 | |||
|- | |||
|align=left|2017<ref name=SEC /> | |||
|11,759 | |||
| −1,962 | |||
|28,655 | |||
|37,543 | |||
|- | |||
|align=left|2018<ref name=SEC /> | |||
|21,461 | |||
| −976 | |||
|29,740 | |||
|48,817 | |||
|- | |||
|align=left|2019<ref name=SEC /> | |||
|24,578 | |||
| −862 | |||
|34,309 | |||
|48,016 | |||
|- | |||
|align=left|2020<ref name=SEC /> | |||
|31,536 | |||
|721 | |||
|52,148 | |||
|70,757 | |||
|- | |||
|align=left|2021<ref name=SEC /> | |||
|53,823 | |||
|5,519 | |||
|62,131 | |||
|99,290 | |||
|} | |||
=== Forward === | |||
====What are the financial forecasts?==== | |||
=====Income statement===== | |||
{| class="wikitable" | |||
|+Income statement<ref>Source: Stockhub Limited</ref><ref group="Note" name="Note04" /> | |||
|- | |||
!Year | |||
!'''1''' !!'''2'''!!'''3'''!!'''4'''!!'''5''' | |||
!'''6''' | |||
!'''7''' | |||
!'''8''' | |||
!'''9''' | |||
!'''10''' | |||
!'''11''' | |||
!'''12''' | |||
!'''13''' | |||
!'''14''' | |||
!'''15''' | |||
!'''16''' | |||
!'''17''' | |||
!'''18''' | |||
!'''19''' | |||
!'''20''' | |||
!'''21''' | |||
!'''22''' | |||
!'''23''' | |||
!'''24''' | |||
!'''25''' | |||
!'''26''' | |||
!'''27''' | |||
!'''28''' | |||
!'''29''' | |||
!'''30''' | |||
!'''31''' | |||
!'''32''' | |||
!'''33''' | |||
!'''34''' | |||
!'''35''' | |||
!'''36''' | |||
!'''37''' | |||
!'''38''' | |||
!'''39''' | |||
!'''40''' | |||
!'''41''' | |||
!'''42''' | |||
|- | |||
|Year end date||31/12/2022||31/12/2023||31/12/2024||31/12/2025 ||31/12/2026 | |||
|31/12/2027 | |||
|31/12/2028 | |||
|31/12/2029 | |||
|31/12/2030 | |||
|31/12/2031 | |||
|31/12/2032 | |||
|31/12/2033 | |||
|31/12/2034 | |||
|31/12/2035 | |||
|31/12/2036 | |||
|31/12/2037 | |||
|31/12/2038 | |||
|31/12/2039 | |||
|31/12/2040 | |||
|31/12/2041 | |||
|31/12/2042 | |||
|31/12/2043 | |||
|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 | |||
|31/12/2058 | |||
|31/12/2059 | |||
|31/12/2060 | |||
|31/12/2061 | |||
|31/12/2062 | |||
|31/12/2063 | |||
|- | |- | ||
| | |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 | |||
| | |$481,510 | ||
|$ | |$406,171 | ||
|$ | |$332,253 | ||
|$ | |$263,564 | ||
|$ | |$202,749 | ||
|$ | |$151,247 | ||
|$ | |$109,414 | ||
|$ | |$76,757 | ||
|$ | |$52,217 | ||
|$ | |$34,448 | ||
|$ | |$22,038 | ||
|$ | |$13,673 | ||
|$ | |$8,226 | ||
|$ | |$4,799 | ||
|$ | |$2,715 | ||
|$ | |$1,490 | ||
|$ | |$793 | ||
|$ | |$409 | ||
|$ | |$205 | ||
|$ | |$99 | ||
|$ | |$47 | ||
|$ | |$21 | ||
|$ | |$9 | ||
|$ | |$4 | ||
|$ | |||
|$ | |||
|$ | |||
|$8, | |||
|$ | |||
|$ | |||
|$1, | |||
|$ | |||
|$ | |||
|$ | |||
|$ | |||
|$ | |||
|$ | |||
|$ | |||
|$ | |||
|$2 | |$2 | ||
|- | |- | ||
| | |Gross profits ($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 | ||
| | |$314,750 | ||
| | |$300,223 | ||
| | |$277,702 | ||
| | |$249,098 | ||
| | |$216,679 | ||
| | |$182,777 | ||
| | |$149,514 | ||
| | |$118,604 | ||
| | |$91,237 | ||
| | |$68,061 | ||
| | |$49,236 | ||
| | |$34,541 | ||
|$23,498 | |||
|$15,502 | |||
|$9,917 | |||
|$6,153 | |||
|$3,702 | |||
|$2,160 | |||
|$1,222 | |||
|$670 | |||
|$357 | |||
|$184 | |||
|$92 | |||
|$45 | |||
|$21 | |||
|$10 | |||
| | |$4 | ||
| | |$2 | ||
| | |$1 | ||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
|- | |- | ||
| | |Operating profits ($million)||$11,840||$16,839||$23,222||$31,057||$40,279 | ||
| | |$50,658 | ||
| | |$123,568 | ||
| | |$146,147 | ||
| | |$167,622 | ||
| | |$186,434 | ||
| | |$201,085 | ||
| | |$210,323 | ||
| | |$213,331 | ||
| | |$209,834 | ||
| | |$200,149 | ||
| | |$185,135 | ||
| | |$166,065 | ||
| | |$144,453 | ||
| | |$121,851 | ||
| | |$99,676 | ||
| | |$79,069 | ||
| | |$60,825 | ||
| | |$45,374 | ||
| | |$32,824 | ||
| | |$23,027 | ||
| | |$15,665 | ||
| | |$10,335 | ||
| | |$6,612 | ||
| | |$4,102 | ||
| | |$2,468 | ||
| | |$1,440 | ||
| | |$815 | ||
| | |$447 | ||
| | |$238 | ||
| | |$123 | ||
| | |$61 | ||
| | |$30 | ||
| | |$14 | ||
| | |$6 | ||
| | |$3 | ||
| | |$1 | ||
| | |$1 | ||
| | |- | ||
| | |Net profits ($million)||$9,354||$13,302||$18,346||$24,535|| $31,820 | ||
| | |$40,020 | ||
| | |$97,619 | ||
| | |$115,456 | ||
| | |$132,421 | ||
| | |$147,283 | ||
| | |$158,857 | ||
| | |$166,156 | ||
| | |$168,531 | ||
| | |$165,769 | ||
| | |$158,118 | ||
| | |$146,256 | ||
| | |$131,192 | ||
| | |$114,118 | ||
| | |$96,263 | ||
| | |$78,744 | ||
| | |$62,465 | ||
| | |$48,052 | ||
| | |$35,846 | ||
| | |$25,931 | ||
| | |$18,191 | ||
| | |$12,376 | ||
| | |$8,164 | ||
| | |$5,223 | ||
|} | |$3,240 | ||
|$1,949 | |||
=== What are the assumptions used to estimate the financial forecasts? === | |$1,137 | ||
|$643 | |||
{| class="wikitable" | |$353 | ||
|+Key inputs | |$188 | ||
!Description | |$97 | ||
!Value | |$48 | ||
|$24 | |||
|$11 | |||
|$5 | |||
|$2 | |||
|$1 | |||
|$0 | |||
|} | |||
===== Balance sheet===== | |||
=====Cash flow statement===== | |||
====What are the assumptions used to estimate the financial forecasts?==== | |||
{| class="wikitable" | |||
|+Key inputs | |||
!Description | |||
!Value | |||
!Commentary | !Commentary | ||
|- | |- | ||
Line 1,160: | Line 910: | ||
|What's the estimated current size of the total addressable market? | |What's the estimated current size of the total addressable market? | ||
|$2,975,000,000 | |$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 | |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 billion. | ||
|- | |- | ||
|What's the estimated annual growth rate of the total addressable market | |What's the estimated terminal annual growth rate of the total addressable market? | ||
|3% | |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>. | |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>. | ||
Line 1,175: | Line 918: | ||
|What's the estimated company peak market share? | |What's the estimated company peak market share? | ||
|10% | |10% | ||
| | |Stockhub estimates that 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 around 1.8%. | ||
|- | |- | ||
|Which distribution function do you want to use to estimate company revenue? | |Which distribution function do you want to use to estimate company revenue? | ||
|Gaussian | |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 | |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 Stockhub suggests using that function here. | ||
|- | |||
|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 standard deviation of company revenue? | |What's the estimated standard deviation of company revenue? | ||
| 6 years | | 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 | |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 company suggests 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>''' | | colspan="3" |'''<div style="text-align: center;">Growth stages</div>''' | ||
Line 1,191: | Line 938: | ||
|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> | |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> | ||
In addition, research shows that a key way to determine the stage which a company is in is by examining the cash flow patterns of the company.<ref>Dickinson, 2010.</ref> A summary of the economic links to cash flow patterns can be found in the appendix of this report. | |||
In addition, research shows that a key way to determine the stage which a company is in is by examining the cash flow patterns of the company.<ref>Dickinson, 2010.</ref> A summary of the economic links to cash flow patterns can be found in the appendix of this report. Stockhub estimates that with Tesla's operating cash flows positive (+), investing cash flows negative (-) and its financing cash flows positive (+), the company is in the second stage of growth (i.e. the 'growth' stage), and, therefore, it has a total of three main stages of growth. | |||
On 7th February 2022, Tesla said it currently expects: to continue to generate net positive operating cash flow as it has done in the last four fiscal years; its capital expenditures to be between $5.00 to $7.00 billion in 2022 and each of the next two fiscal years; and its ability to be self-funding to continue as long as macroeconomic factors support current trends in its sales. Accordingly, based on forward looking statements, it appears that the company is in stage two of the business lifecycle (i.e. the 'growth' stage), and, therefore, it has a total of three main stages of growth remaining. | On 7th February 2022, Tesla said it currently expects: to continue to generate net positive operating cash flow as it has done in the last four fiscal years; its capital expenditures to be between $5.00 to $7.00 billion in 2022 and each of the next two fiscal years; and its ability to be self-funding to continue as long as macroeconomic factors support current trends in its sales. Accordingly, based on forward looking statements, it appears that the company is in stage two of the business lifecycle (i.e. the 'growth' stage), and, therefore, it has a total of three main stages of growth remaining. | ||
Line 1,214: | Line 963: | ||
|- | |- | ||
|Cost of goods sold as a proportion of revenue (%) | |Cost of goods sold as a proportion of revenue (%) | ||
| | |70% | ||
|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 | |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 70%. | ||
|- | |- | ||
|Operating expenses as a proportion of revenue (%) | |Operating expenses as a proportion of revenue (%) | ||
|15% | |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% | |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%. | ||
|- | |- | ||
|Tax rate (%) | |Tax rate (%) | ||
| | |21% | ||
|Research suggests that it's best to use | |Research suggests that it's best to use the marginal tax rate of the country in which the company mainly operates. Tesla mainly operates in the United States, and the marginal tax rate there is 21%. | ||
|- | |- | ||
|Depreciation and amortisation as a proportion of revenue (%) | |Depreciation and amortisation as a proportion of revenue (%) | ||
| | |5% | ||
|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 | |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 5%. | ||
|- | |- | ||
|Fixed capital as a proportion of revenue (%) | |Fixed 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 | |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%. | ||
|- | |- | ||
|Working capital as a proportion of revenue (%) | |Working capital as a proportion of revenue (%) | ||
Line 1,248: | Line 997: | ||
|- | |- | ||
|Cost of goods sold as a proportion of revenue (%) | |Cost of goods sold as a proportion of revenue (%) | ||
| | |55% | ||
|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 | |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 55%. | ||
|- | |- | ||
|Operating expenses as a proportion of revenue (%) | |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 3)<ref name=":7" />, and the margin for its peers is | |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 15%. | ||
|- | |- | ||
|Tax rate (%) | |Tax rate (%) | ||
| | |21% | ||
|Research suggests that it's best to use | |Research suggests that it's best to use the marginal tax rate of the country in which the company mainly operates. Tesla mainly operates in the United States, and the marginal tax rate there is 21%. | ||
|- | |- | ||
|Depreciation and amortisation as a proportion of revenue (%) | |Depreciation and amortisation as a proportion of revenue (%) | ||
| | |5% | ||
|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 | |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 5%. | ||
|- | |- | ||
|Fixed capital as a proportion of revenue (%) | |Fixed capital as a proportion of revenue (%) | ||
|3% | |3% | ||
|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% | |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%. | ||
|- | |- | ||
|Working capital as a proportion of revenue (%) | |Working capital as a proportion of revenue (%) | ||
|10% | |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% | |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%. | ||
|- | |- | ||
|Net borrowing ($000) | |Net borrowing ($000) | ||
|Zero | |Zero | ||
| | |Stockhub suggests that for simplicity, the net borrowing figure is zero. | ||
|- | |- | ||
|Interest amount ($000) | |Interest amount ($000) | ||
|Zero | |Zero | ||
| | |Stockhub suggests that for simplicity, the interest amount figure is zero. | ||
|- | |- | ||
| colspan="3" |'''<div style="text-align: center;">Growth stage 4</div>''' | | colspan="3" |'''<div style="text-align: center;">Growth stage 4</div>''' | ||
|- | |- | ||
|Cost of goods sold as a proportion of revenue (%) | |Cost of goods sold as a proportion of revenue (%) | ||
| | |55% | ||
|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 | |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 55%. | ||
|- | |- | ||
|Operating expenses as a proportion of revenue (%) | |Operating expenses as a proportion of revenue (%) | ||
|15% | |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% | |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%. | ||
|- | |- | ||
|Tax rate (%) | |Tax rate (%) | ||
| | |21% | ||
|Research suggests that it's best to use | |Research suggests that it's best to use the marginal tax rate of the country in which the company mainly operates. Tesla mainly operates in the United States, and the marginal tax rate there is 21%. | ||
|- | |- | ||
|Depreciation and amortisation as a proportion of revenue (%) | |Depreciation and amortisation as a proportion of revenue (%) | ||
| | |5% | ||
|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 | |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 5%. | ||
|- | |- | ||
|Fixed capital as a proportion of revenue (%) | |Fixed capital as a proportion of revenue (%) | ||
| | | 3% | ||
|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 | |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 3%. | ||
|- | |- | ||
|Working capital as a proportion of revenue (%) | |Working capital as a proportion of revenue (%) | ||
| 10% | | 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% | |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%. | ||
|- | |- | ||
|Net borrowing ($000) | |Net borrowing ($000) | ||
|Zero | |Zero | ||
| | |Stockhub suggests that for simplicity, the net borrowing figure is zero. | ||
|- | |- | ||
|Interest amount ($000) | |Interest amount ($000) | ||
|Zero | |Zero | ||
| | |Stockhub suggests that for simplicity, the interest amount figure is zero. | ||
|} | |} | ||
==Risks== | ==Risks== | ||
As with any investment, investing in Tesla carries a level of risk. | 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. | ||
===Risks related to the ability to grow the business=== | ===Risks related to the ability to grow the business=== | ||
Line 1,381: | Line 1,126: | ||
===What's the expected return of an investment in the company?=== | ===What's the expected return of an investment in the company?=== | ||
Stockhub estimates that the expected return of an investment in the company over the next five years is 72%. In other words, an £1,000 investment in the company is expected to return £1,720 in five years time. The assumptions used to estimate the return figure can be found in the table below. | |||
Assuming that a suitable return level over five years is 10% per year and Tesla achieves its expected return level (of | Assuming that a suitable return level over five years is 10% per year and Tesla achieves its expected return level (of 72%), then an investment in the company is considered to be a 'suitable' one. | ||
===What are the assumptions used to estimate the return?=== | ===What are the assumptions used to estimate the return?=== | ||
Line 1,399: | Line 1,144: | ||
#By comparing the investment to other similar investments (i.e. relative valuation). | #By comparing the investment to other similar investments (i.e. relative valuation). | ||
Research suggests that in terms of estimating the expected return of an investment over a period of 12-months or more, the approach that is more accurate is the discounted cash flow approach<ref name=":5">Demirakos et al., 2010; Gleason et al., 2013</ref>, so that's the approach that | Research suggests that in terms of estimating the expected return of an investment over a period of 12-months or more, the approach that is more accurate is the discounted cash flow approach<ref name=":5">Demirakos et al., 2010; Gleason et al., 2013</ref>, so that's the approach that Stockhub suggests to use here; nevertheless, for completeness purposes, separately, the valuation of the company is also estimated using the using the relative valuation approach (the valuation based on the relative approach can be found in the appendix of this report). | ||
Tesla has never paid cash dividends, and on 7th February 2022, it said that it currently does not anticipate paying any cash dividends in the foreseeable future. Accordingly, | Tesla has never paid cash dividends, and on 7th February 2022, it said that it currently does not anticipate paying any cash dividends in the foreseeable future. Accordingly, Stockhub suggests using the free cash flow valuation method (rather than the dividend discount model). | ||
|- | |- | ||
|Which financial forecasts to use? | |Which financial forecasts to use? | ||
| Stockhub | | Stockhub | ||
|The only available long-term forecasts (i.e. >15 years) are the ones that are supplied by the Stockhub | |The only available long-term forecasts (i.e. >15 years) are the ones that are supplied by the Stockhub company (the forecasts can be found in the financials section of this report), so Stockhub suggests using those. | ||
|- | |- | ||
| colspan="3" |'''<div style="text-align: center;">Growth stage 2</div>''' | | colspan="3" |'''<div style="text-align: center;">Growth stage 2</div>''' | ||
|- | |- | ||
|Discount rate (%) | |Discount rate (%) | ||
| | | 8% | ||
|There are two key risk parameters for a firm that need to be estimated: its cost of equity and its cost of debt. A key way to estimate the cost of equity | |There are two key risk parameters for a firm that need to be estimated: its cost of equity and its cost of debt. A key way to estimate the cost of equity by looking at the beta (or betas) of the company in question, the cost of debt from a measure of default risk (an actual or synthetic rating) and apply the market value weights for debt and equity to come up with the cost of capital. | ||
|- | |- | ||
|Probability of success (%) | |Probability of success (%) | ||
| | | 100% | ||
| Research suggests that a suitable rate for a company in this growth stage (i.e. stage 2) is | | Research suggests that a suitable rate for a company in this growth stage (i.e. stage 2) is 100%. | ||
|- | |- | ||
Line 1,421: | Line 1,166: | ||
|- | |- | ||
|Discount rate (%) | |Discount rate (%) | ||
| | | 8% | ||
|There are two key risk parameters for a firm that need to be estimated: its cost of equity and its cost of debt. A key way to estimate the cost of equity | |There are two key risk parameters for a firm that need to be estimated: its cost of equity and its cost of debt. A key way to estimate the cost of equity by looking at the beta (or betas) of the company in question, the cost of debt from a measure of default risk (an actual or synthetic rating) and apply the market value weights for debt and equity to come up with the cost of capital. | ||
|- | |- | ||
|Probability of success (%) | |Probability of success (%) | ||
Line 1,432: | Line 1,177: | ||
|- | |- | ||
|Discount rate (%) | |Discount rate (%) | ||
| | | 8% | ||
|There are two key risk parameters for a firm that need to be estimated: its cost of equity and its cost of debt. A key way to estimate the cost of equity | |There are two key risk parameters for a firm that need to be estimated: its cost of equity and its cost of debt. A key way to estimate the cost of equity by looking at the beta (or betas) of the company in question, the cost of debt from a measure of default risk (an actual or synthetic rating) and apply the market value weights for debt and equity to come up with the cost of capital. | ||
|- | |- | ||
|Probability of success (%) | |Probability of success (%) | ||
Line 1,443: | Line 1,188: | ||
|- | |- | ||
|What's the current value of the company? | |What's the current value of the company? | ||
|$ | |$688 billion | ||
|As at | |As at 30th May 2022, the Stockhub company estimates the current value of its company at $688 billion. | ||
|- | |- | ||
|Which time period do you want to use to estimate the expected return? | |Which time period do you want to use to estimate the expected return? | ||
| Between now and five years time | | Between now and five years time | ||
| | |Stockhub suggests that to account for general market cyclicity, it's best to estimate the expected return of the company between now and five years time. | ||
|} | |} | ||
Line 1,455: | Line 1,200: | ||
The main inputs that result in the greatest change in the expected return of the Tesla investment are, in order of importance (from highest to lowest): | The main inputs that result in the greatest change in the expected return of the Tesla investment are, in order of importance (from highest to lowest): | ||
#The size of the total addressable market (the default | #The size of the total addressable market (the default time-weighted average rate is $3.0 trillion); | ||
#Tesla peak market share (the default share is 10%); and | #Tesla peak market share (the default share is 10%); and | ||
#The discount rate (the default time-weighted average rate is | #The discount rate (the default time-weighted average rate is 8%). | ||
The impact of a 50% change in those main inputs to the expected return of the Tesla investment is shown in the table below. | The impact of a 50% change in those main inputs to the expected return of the Tesla investment is shown in the table below. | ||
Line 1,469: | Line 1,214: | ||
|- | |- | ||
|The size of the total addressable market | |The size of the total addressable market | ||
| | |(14%) | ||
| | |72% | ||
| | |158% | ||
|- | |- | ||
|Tesla peak market share | |Tesla peak market share | ||
| | |(14%) | ||
| | | 72% | ||
| | | 158% | ||
|- | |- | ||
|The discount rate | |The discount rate | ||
| | |30% | ||
| | |72% | ||
| | | 136% | ||
|} | |} | ||
Line 1,488: | Line 1,233: | ||
==Appendix== | ==Appendix== | ||
=== | === Financial statements === | ||
{| class="wikitable" | {| class="wikitable" | ||
|+ | |+Balance sheet | ||
! | !Year end date | ||
! | !31/12/2021 | ||
! | !31/12/2020 | ||
!31/12/2019 | |||
!31/12/2018 | |||
|- | |- | ||
| | |'''Current Assets''' | ||
| | | | ||
| | | | ||
| | |||
| | |||
|- | |- | ||
| | |Cash and Cash Equivalents ($million) | ||
| | |$17,576 | ||
| | |$19,384 | ||
|$6,268 | |||
|$3,879 | |||
|- | |- | ||
| | |Short-Term Investments ($million) | ||
| | |$131 | ||
| | | -- | ||
| -- | |||
| -- | |||
|- | |- | ||
| | |Net Receivables ($million) | ||
| | |$1,913 | ||
| | |$1,886 | ||
|$1,324 | |||
|$949 | |||
|- | |- | ||
| | |Inventory ($million) | ||
|$5,757 | |||
| | |$4,101 | ||
| | |$3,552 | ||
| | |$3,113 | ||
| | |||
|- | |- | ||
| | |Other Current Assets ($million) | ||
| | |$1,723 | ||
| | |$1,346 | ||
|$959 | |||
|$366 | |||
|- | |- | ||
| | |Total Current Assets ($million) | ||
| | |$27,100 | ||
| | |$26,717 | ||
|$12,103 | |||
|$8,307 | |||
|- | |- | ||
| | |'''Long-Term Assets''' | ||
| | | | ||
| | | | ||
| | |||
| | |||
|- | |- | ||
| | |Long-Term Investments ($million) | ||
| | | -- | ||
| | | -- | ||
| -- | |||
|$422 | |||
|- | |- | ||
| | |Fixed Assets ($million) | ||
| | |$25,411 | ||
| | |$17,396 | ||
|$14,061 | |||
|$13,420 | |||
|- | |- | ||
| | |Goodwill ($million) | ||
|$200 | |||
|$207 | |||
| | |$198 | ||
|$68 | |||
|- | |- | ||
| | |Intangible Assets ($million) | ||
| | |$257 | ||
| | |$313 | ||
|$339 | |||
|$282 | |||
|- | |- | ||
| | |Other Assets ($million) | ||
| | |$9,163 | ||
| | |$7,515 | ||
|$7,608 | |||
|$7,241 | |||
|- | |- | ||
| | |Deferred Asset Charges ($million) | ||
| | | -- | ||
| | | -- | ||
| -- | |||
| -- | |||
|- | |- | ||
| | |Total Assets ($million) | ||
| | |$62,131 | ||
| | |$52,148 | ||
|$34,309 | |||
|$29,740 | |||
|- | |- | ||
| | |'''Current Liabilities''' | ||
| | | | ||
| | | | ||
| | |||
| | |||
|- | |- | ||
| | |Accounts Payable ($million) | ||
| | |$15,744 | ||
| | |$9,906 | ||
|$6,993 | |||
|$5,499 | |||
|- | |- | ||
| | |Short-Term Debt / Current Portion of Long-Term Debt ($million) | ||
| | |$1,589 | ||
| | |$2,132 | ||
| | |$1,785 | ||
| | |$2,568 | ||
|- | |- | ||
| | |Other Current Liabilities ($million) | ||
| | |$2,372 | ||
| | |$2,210 | ||
|$1,889 | |||
|$1,926 | |||
|- | |- | ||
| | |Total Current Liabilities ($million) | ||
| | |$19,705 | ||
| | |$14,248 | ||
|$10,667 | |||
|$9,993 | |||
|- | |- | ||
| | |Long-Term Debt ($million) | ||
| | |$5,245 | ||
| | |$9,556 | ||
|$11,634 | |||
|$9,404 | |||
|- | |- | ||
| | |Other Liabilities ($million) | ||
|$3,546 | |||
|$3,330 | |||
| | |$2,691 | ||
|$3,039 | |||
|- | |- | ||
| | |Deferred Liability Charges ($million) | ||
| | |$2,052 | ||
| | |$1,284 | ||
|$1,207 | |||
|$991 | |||
|- | |- | ||
| | |Misc. Stocks ($million) | ||
| | |$826 | ||
| | |$850 | ||
|$849 | |||
|$834 | |||
|- | |- | ||
| | |Minority Interest ($million) | ||
| | |$568 | ||
| | |$655 | ||
|$643 | |||
|$556 | |||
|- | |- | ||
| | |Total Liabilities ($million) | ||
| | |$31,374 | ||
| | |$29,268 | ||
|$27,048 | |||
|$24,261 | |||
|- | |- | ||
| | |'''Stock Holders Equity''' | ||
| | | | ||
| | | | ||
| | |||
| | |||
|- | |- | ||
| | |Common Stocks ($million) | ||
| | |$1 | ||
| | |$1 | ||
|$1 | |||
| -- | |||
|- | |- | ||
| | |Capital Surplus ($million) | ||
| style=" | |$331 | ||
| style=" | | style="color: red;" |-$5,399 | ||
| style="color: red;" |-$6,083 | |||
| style="color: red;" |-$5,318 | |||
|- | |- | ||
| | |Retained Earnings | ||
| | | -- | ||
| | | -- | ||
| -- | |||
| -- | |||
|- | |- | ||
| | |Treasury Stock ($million) | ||
| | |$29,803 | ||
| | |$27,260 | ||
| | |$12,736 | ||
| | |$10,249 | ||
| style=" | |- | ||
| style=" | |Other Equity ($million) | ||
|$54 | |||
|$363 | |||
| style="color: red;" |-$36 | |||
| style="color: red;" |-$8 | |||
|- | |- | ||
| | |Total Equity ($million) | ||
| | |$30,189 | ||
| | |$22,225 | ||
|$6,618 | |||
|$4,923 | |||
|- | |- | ||
| | |Total Liabilities & Equity ($million) | ||
| | |$62,131 | ||
| | |$52,148 | ||
|$34,309 | |||
|$29,740 | |||
|} | |} | ||
{| class="wikitable" | {| class="wikitable" | ||
|+ | |+Cash flow | ||
! | !Year end date | ||
! | !31/12/2021 | ||
! | !31/12/2020 | ||
!31/12/2019 | |||
!31/12/2018 | |||
|- | |- | ||
| | |Net Income ($million) | ||
| style=" | |$5,519 | ||
| style=" | |$721 | ||
| style="color: red;" |-$862 | |||
| style="color: red;" |-$976 | |||
|- | |- | ||
| | |'''Cash Flows-Operating Activities''' | ||
| | | | ||
| | | | ||
| | |||
| | |||
|- | |- | ||
| | |Depreciation ($million) | ||
| | |$2,911 | ||
| | |$2,322 | ||
|$2,154 | |||
|$2,060 | |||
|- | |- | ||
| | |Net Income Adjustments ($million) | ||
| | |$2,424 | ||
| | | $2,575 | ||
| $1,375 | |||
| $1,043 | |||
|- | |- | ||
| | |'''Changes in Operating Activities''' | ||
| | | | ||
| | |||
| | |||
| | | | ||
| | |||
| | |||
|- | |- | ||
| | |Accounts Receivable ($million) | ||
| style=" | | style="color: red;" |-$130 | ||
| style=" | | style="color: red;" |-$652 | ||
| style="color: red;" |-$367 | |||
| style="color: red;" |-$497 | |||
|- | |- | ||
| | |Changes in Inventories ($million) | ||
| style=" | | style="color: red;" |-$1,709 | ||
| style=" | | style="color: red;" |-$422 | ||
| style="color: red;" |-$429 | |||
| style="color: red;" |-$1,023 | |||
|- | |- | ||
| | |Other Operating Activities ($million) | ||
| style=" | | style="color: red;" |-$3,676 | ||
| style=" | | style="color: red;" |-$1,667 | ||
| style="color: red;" |-$937 | |||
| style="color: red;" |-$504 | |||
|- | |- | ||
| | |Liabilities ($million) | ||
|$6,033 | |||
|$2,925 | |||
|$1,384 | |||
|$2,082 | |||
|- | |- | ||
| | |Net Cash Flow-Operating ($million) | ||
| $11,497 | |||
| $5,943 | |||
| | | $2,405 | ||
|$2,098 | |||
|- | |- | ||
|'''Cash Flows-Investing Activities''' | |||
| | |||
| | |||
| | |||
| | |||
|- | |- | ||
| | |Capital Expenditures ($million) | ||
| style="color: red;" |-$6,514 | |||
| style="color: red;" |-$3,232 | |||
| style="color: red;" |-$1,432 | |||
| style="color: red;" |-$2,319 | |||
|- | |- | ||
| | |Investments ($million) | ||
|- | | style="color: red;" |-$132 | ||
| | | -- | ||
| -- | |||
| -- | |||
|- | |- | ||
| | |Other Investing Activities ($million) | ||
|style=" | | style="color: red;" |-$1,222 | ||
|style=" | |$100 | ||
| style="color: red;" |-$4 | |||
| style="color: red;" |-$18 | |||
|- | |- | ||
| | |Net Cash Flows-Investing ($million) | ||
|style=" | | style="color: red;" |-$7,868 | ||
|style=" | | style="color: red;" |-$3,132 | ||
| style="color: red;" |-$1,436 | |||
| style="color: red;" |-$2,337 | |||
|- | |- | ||
| | |'''Cash Flows-Financing Activities''' | ||
| | | | ||
| | | | ||
| | |||
| | |||
|- | |- | ||
| | |Sale and Purchase of Stock ($million) | ||
| | |$699 | ||
|$12,675 | |||
|$1,555 | |||
|$727 | |||
|- | |- | ||
| | |Net Borrowings ($million) | ||
|style=" | | style="color: red;" |-$5,732 | ||
|style=" | | style="color: red;" |-$2,488 | ||
|$798 | |||
|$89 | |||
| | |||
|- | |- | ||
| | |Other Financing Activities ($million) | ||
| | | -- | ||
| | | -- | ||
| | | -- | ||
| -- | |||
|- | |- | ||
| | |Net Cash Flows-Financing ($million) | ||
|style=" | | style="color: red;" |-$5,203 | ||
| | |$9,973 | ||
|$1,529 | |||
|$574 | |||
|- | |- | ||
| | |Effect of Exchange Rate ($million) | ||
|style=" | | style="color: red;" |-$183 | ||
|style=" | |$334 | ||
|style=" | |$8 | ||
| style="color: red;" |-$23 | |||
|- | |||
|Net Cash Flow ($million) | |||
| style="color: red;" |-$1,757 | |||
|$13,118 | |||
|$2,506 | |||
|$312 | |||
|} | |} | ||
{| class="wikitable" | {| class="wikitable" | ||
|+ | |+Income statement | ||
!Year end date | |||
!31/12/2021 | |||
!31/12/2020 | |||
!31/12/2019 | |||
!31/12/2018 | |||
|- | |- | ||
|Total Revenue | |||
|$53,823 | |||
|$31,536 | |||
|$24,578 | |||
|$21,461 | |||
|- | |||
|Cost of Revenue | |||
|$40,217 | |||
|$24,906 | |||
|$20,509 | |||
|$17,419 | |||
|- | |- | ||
| | |'''Gross Profit''' | ||
| | |'''$13,606''' | ||
|'''$6,630''' | |||
|'''$4,069''' | |||
|'''$4,042''' | |||
|- | |- | ||
|'''Operating Expenses''' | |||
|''' | |||
| | | | ||
| | | | ||
Line 1,800: | Line 1,620: | ||
| | | | ||
|- | |- | ||
| | |Research and Development | ||
|$ | |$2,593 | ||
|$ | |$1,491 | ||
|$ | |$1,343 | ||
|$3, | |$1,460 | ||
|- | |||
|Sales, General and Admin. | |||
|$4,517 | |||
|$3,145 | |||
|$2,646 | |||
|$2,835 | |||
|- | |||
|Non-Recurring Items | |||
| style="color: red;" |-$27 | |||
| -- | |||
|$149 | |||
|$135 | |||
|- | |- | ||
| | |Other Operating Items | ||
| | | -- | ||
| -- | | -- | ||
| -- | | -- | ||
| -- | | -- | ||
|- | |- | ||
| | |'''Operating Income''' | ||
|$1, | |'''$6,523''' | ||
|$ | |'''$1,994''' | ||
|$ | |style="color: red;" |'''-$69''' | ||
|$ | |style="color: red;" |'''-$388''' | ||
|- | |||
|Add'l income/expense items | |||
| $191 | |||
| style="color: red;" |-$92 | |||
| $89 | |||
|$46 | |||
|- | |- | ||
| | |Earnings Before Interest and Tax | ||
|$ | |$6,714 | ||
|$ | |$1,902 | ||
|$ | |$20 | ||
|$ | | style="color: red;" |-$342 | ||
|- | |- | ||
| | |Interest Expense | ||
|$ | |$371 | ||
|$ | |$748 | ||
|$ | |$685 | ||
|$ | |$663 | ||
|- | |- | ||
| | |Earnings Before Tax | ||
|$ | |$6,343 | ||
|$ | |$1,154 | ||
|$ | | style="color: red;" |-$665 | ||
|$ | | style="color: red;" |-$1,005 | ||
|- | |- | ||
| | |Income Tax | ||
| | |$699 | ||
| | |$292 | ||
| | |$110 | ||
| | |$58 | ||
|- | |- | ||
| | |Minority Interest | ||
| -- | |||
| -- | | -- | ||
| -- | | -- | ||
| -- | | -- | ||
|- | |- | ||
| | |Equity Earnings/Loss Unconsolidated Subsidiary | ||
|$ | | style="color: red;" |-$125 | ||
|$ | | style="color: red;" |-$141 | ||
|$ | | style="color: red;" |-$87 | ||
|$ | |$87 | ||
|- | |- | ||
| | |Net Income-Cont. Operations | ||
|$ | |$5,519 | ||
|$ | |$721 | ||
|$ | | style="color: red;" |-$862 | ||
|$ | | style="color: red;" |-$976 | ||
|- | |- | ||
| | |'''Net Income''' | ||
|$ | |'''$5,519''' | ||
|$ | |'''$721''' | ||
|$ | | style="color: red;" |'''-$862''' | ||
|$ | | style="color: red;" |'''-$976''' | ||
|- | |- | ||
| | |'''Net Income Applicable to Common Shareholders''' | ||
|$ | |'''$5,519''' | ||
|$ | |'''$721''' | ||
|$ | | style="color: red;" |'''-$862''' | ||
|$ | | style="color: red;" |'''-$976''' | ||
|} | |||
{| class="wikitable" | |||
|+Financial ratios | |||
!Year end date | |||
!31/12/2021 | |||
!31/12/2020 | |||
!31/12/2019 | |||
!31/12/2018 | |||
|- | |- | ||
| | | colspan="5" |'''Liquidity Ratios''' | ||
| | |||
|- | |- | ||
| | |Current Ratio | ||
| | |138% | ||
| | | 188% | ||
| | | 113% | ||
| | | 83% | ||
|- | |- | ||
| | |Quick Ratio | ||
| | |108% | ||
| | |159% | ||
| | |80% | ||
| | |52% | ||
|- | |- | ||
| | |Cash Ratio | ||
| | |90% | ||
| | |136% | ||
| | |59% | ||
| | |39% | ||
|- | |- | ||
| | | colspan="5" |'''Profitability Ratios''' | ||
| | |||
|- | |- | ||
| | |Gross Margin | ||
| | |25% | ||
| | |21% | ||
| | |17% | ||
| | |19% | ||
|- | |- | ||
| | |Operating Margin | ||
| | |12% | ||
| | |6% | ||
| | |0% | ||
| | |0% | ||
|- | |- | ||
| | |Pre-Tax Margin | ||
| | | 12% | ||
| | | 4% | ||
| | | 0% | ||
| | |0% | ||
|- | |- | ||
| | |Profit Margin | ||
| | |10% | ||
| | |2% | ||
| | |0% | ||
| | |0% | ||
|- | |- | ||
| | |Pre-Tax ROE | ||
| | |21% | ||
| | |5% | ||
| | |0% | ||
| | |0% | ||
|- | |- | ||
| | |After Tax ROE | ||
| | |18% | ||
| | |3% | ||
| | |0% | ||
| | |0% | ||
| | |} | ||
| | ===Relative valuation approach=== | ||
| | |||
====What's the expected return of an investment in Tesla?==== | |||
Accordingly, Stockhub estimates that the expected return of an investment in Tesla Inc over the next five years is 4.4x. In other words, an £1,000 investment in the company is expected to return £4,400 in five years time. The assumptions used to estimate the return figure can be found in the table below. | |||
Assuming that a suitable return level over five years is 10% per year and Tesla achieves its expected return level (of 4.4x), then an investment in the company is considered to be a 'suitable' one. | |||
====What are the assumptions used to estimate the return figure?==== | |||
{| class="wikitable" | |||
|+Key inputs | |||
!Description | |||
!Value | |||
!Commentary | |||
|- | |- | ||
| | | Which type of multiple do you want to use? | ||
| | | Growth-adjusted EV/sales | ||
| | | For the numerator, Stockhub believes that to account for the different financial leverage levels of its peers, it's best to use enterprise value (EV), rather than price. For the denominator, Stockhub believes that because it expects Tesla to reinvest almost all of its revenue back into the business over the five year forecast period and therefore its earnings are expected to be abnormally low over the period, it's best to use sales. Accordingly, Stockhub suggests valuing its company using the EV/sales ratio. However, Stockhub feels that to take into account the different business lifecycle stages of its peers, the most suitable valuation multiple to use is the growth-adjusted EV/sales multiple<ref group="Note" name="Note15" />, rather than the EV/sales multiple. | ||
|- | |- | ||
| | |In regards to the growth-adjusted EV/sales multiple, for the sales figure, which year to you want to use? | ||
| | |||
| | |Year 5 | ||
|Stockhub suggests that with sales forecast to grow exponential over the five year forecast period, it's best to use forward-looking data, rather than historic data. | |||
In regards to the growth-adjusted EV/sales multiple, for the sales figure, Stockhub suggests that in order to account for the forecasted exponential growth of the business, it's best to use one at the end of the forecast period (i.e. Year 5). | |||
|- | |- | ||
| | |In regards to the growth-adjusted EV/sales multiple, for the sales growth figure, which year(s) do you want to use? | ||
| | |Year 6 to 8, from now | ||
|Stockhub suggests that for the sales growth figure, it's best to use Year 6 to 8. | |||
| | |||
|- | |- | ||
| | |In regards to the growth-adjusted EV/sales multiple, what multiple figure do you want to use? | ||
|89x | |||
|In Stockhub's view, Tesla closest peer is [[Apple]]. [[Apple]] trades on a multiple of 89x. | |||
| | |||
| | |||
|- | |- | ||
| | |Which financial forecasts to use? | ||
| | |Stockhub | ||
| | |The only available forecasts are the ones that are supplied by the Stockhub company (the forecasts can be found in the financials section of this report), so Stockhub suggests using those. | ||
|- | |- | ||
| | | What's the current value of the Stockhub company? | ||
|$688 billion | |||
|$ | |As at 21st May 2022, the current value of its company at $688 billion. | ||
| | |||
|- | |- | ||
| | |Which time period do you want to use to estimate the expected return? | ||
| | |Between now and five years time | ||
| | |Stockhub suggests that to account for general market cyclicity, it's best to estimate the expected return of the company between now and five years time. | ||
| | |} | ||
| | |||
===Tesla peer(s)=== | |||
{| class="wikitable sortable" | |||
|+Valuation table | |||
|- | |- | ||
!Investments!! Industry !!Enterprise value/sales!!1-year forward revenue growth rates (%)!!Growth-adjusted enterprise value/sales ratio | |||
|- | |- | ||
| | | [[Apple]]||Internet content & communication||7.27x<ref name=":0">Morningstar, Inc.</ref>||8.20%<ref name=":0" />|| style="background: blue; color: white;" |89x | ||
| | |||
| | |||
| | |||
| | |||
|} | |} | ||
===Economic links to cash flow patterns === | |||
{| class="wikitable" | {| class="wikitable" | ||
|+Cash flow | |+Economic links to cash flow patterns | ||
! | |- | ||
! | !Cash flow type!!Introduction!!Growth!!Shake out!!Mature!!Decline | ||
! | |||
! | |||
! | |||
|- | |- | ||
| | |Operating|| style="background: red; color: white;" |-|| style="background: green; color: white;" |+ | ||
| | | style="background: orange; color: white;" | +/-|| style="background: green; color: white;" |+|| style="background: red; color: white;" |- | ||
| | |||
| style="color: | |||
| style="color: red;" |- | |||
|- | |- | ||
| | |Investing|| style="background: red; color: white;" |-|| style="background: red; color: white;" |-|| style="background: orange; color: white;" |+/-|| style="background: red; color: white;" |- | ||
| | | style="background: green; color: white;" | + | ||
| | |||
| | |||
| | |||
|- | |- | ||
|Financing|| style="background: green; color: white;" |+|| style="background: green; color: white;" |+|| style="background: orange; color: white;" |+/-|| style="background: red; color: white;" |-|| style="background: orange; color: white;" |+/- | |||
|} | |||
|} | |} | ||
== Notes== | == Notes== | ||
Line 2,995: | Line 1,953: | ||
Research shows that an investment has two main types of risks: 1) non-systematic and 2) systematic. Systematic risk is the risk related to the overall market, and non-systematic risk is the risk that's specific to an individual investment. Evidence shows that taking on non-systematic risk is inefficient, and it's, therefore, best to eliminate it; and in most cases, elimination is fairy easy to do [by holding a diversified portfolio of investments (i.e. around 15 investments)]. Accordingly, when assessing the riskiness of an investment, it’s best to look at the systematic risk only (i.e. ignore the non-systematic risk). A key measure of systematic risk is beta, and a main way to determine the riskiness of an investment is to compare the beta of the investment with the beta of the market, which is 1. For example, Tesla's beta is 2.12, and is, accordingly, 112% above the market beta (of 1); assuming that a 'high' level of riskiness is 50% or more above the market beta, then the riskiness of investing in Tesla is considered to be 'high' (112%>50%). | Research shows that an investment has two main types of risks: 1) non-systematic and 2) systematic. Systematic risk is the risk related to the overall market, and non-systematic risk is the risk that's specific to an individual investment. Evidence shows that taking on non-systematic risk is inefficient, and it's, therefore, best to eliminate it; and in most cases, elimination is fairy easy to do [by holding a diversified portfolio of investments (i.e. around 15 investments)]. Accordingly, when assessing the riskiness of an investment, it’s best to look at the systematic risk only (i.e. ignore the non-systematic risk). A key measure of systematic risk is beta, and a main way to determine the riskiness of an investment is to compare the beta of the investment with the beta of the market, which is 1. For example, Tesla's beta is 2.12, and is, accordingly, 112% above the market beta (of 1); assuming that a 'high' level of riskiness is 50% or more above the market beta, then the riskiness of investing in Tesla is considered to be 'high' (112%>50%). | ||
'''Current | '''Current Ratio''' | ||
The current ratio is a liquidity ratio that measures whether a firm has enough resources to meet its short-term obligations. It compares a firm's current assets to its current liabilities, and is expressed as follows:- | The current ratio is a liquidity ratio that measures whether a firm has enough resources to meet its short-term obligations. It compares a firm's current assets to its current liabilities, and is expressed as follows:- | ||
Line 3,003: | Line 1,961: | ||
Acceptable current ratios vary from industry to industry and from business lifecycle stage. | Acceptable current ratios vary from industry to industry and from business lifecycle stage. | ||
'''Quick | '''Quick Ratio''' | ||
The quick ratio, also known as the acid-test ratio, is a type of liquidity ratio, which measures the ability of a company to use its near cash or quick assets to extinguish or retire its current liabilities immediately. It is defined as the ratio between quickly available or liquid assets and current liabilities. Quick assets are current assets that can presumably be quickly converted to cash at close to their book values. | The quick ratio, also known as the acid-test ratio, is a type of liquidity ratio, which measures the ability of a company to use its near cash or quick assets to extinguish or retire its current liabilities immediately. It is defined as the ratio between quickly available or liquid assets and current liabilities. Quick assets are current assets that can presumably be quickly converted to cash at close to their book values. | ||
Line 3,011: | Line 1,969: | ||
The quick ratio is similar to the current ratio, but provides a more conservative assessment of the liquidity position of firms as it excludes inventory, which it does not consider as sufficiently liquid. | The quick ratio is similar to the current ratio, but provides a more conservative assessment of the liquidity position of firms as it excludes inventory, which it does not consider as sufficiently liquid. | ||
'''Cash | '''Cash Ratio''' | ||
The cash ratio is a liquidity measure that shows a company's ability to cover its short-term obligations using only cash and cash equivalents. | The cash ratio is a liquidity measure that shows a company's ability to cover its short-term obligations using only cash and cash equivalents. | ||
Line 3,020: | Line 1,978: | ||
A calculation greater than 1 means a company has more cash on hand than current debts, while a calculation less than 1 means a company has more short-term debt than cash. | A calculation greater than 1 means a company has more cash on hand than current debts, while a calculation less than 1 means a company has more short-term debt than cash. | ||
{| class="wikitable" | {| class="wikitable" | ||
Line 3,094: | Line 1,999: | ||
==References== | ==References== | ||
<references /> | <references /> | ||