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1Spatial and Tesla, Inc.: Difference between pages

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== Summary ==
{{Short description|On a mission to accelerate the world's transition to sustainable energy.}}


1Spatial (SPA) announced a three-year contract worth c $0.8m with the State of Montana for its Next Generation 911 solution. The Montana contract, along with recent large contract wins, the accelerating pace of new business, the transition to a higher-margin SaaS business, increased collaboration among data users and success with the ‘Land and Expand’ strategy should support a c 6% CAGR through FY23 and improved margins. We remain encouraged by the long-term potential of the geospatial industry and see scope for further acceleration. While it does trade at a sizable discount to its software peers in terms of price/revenue and EV/EBITDA multiples, we see opportunities for the gap to be reduced, and now is the time for SPA to capitalise on them.
{| class="wikitable"
|+ Key information
|-
| Risk/return|| [[Risk/return::High]]
|-
| Price per share|| [[Price per share::$303.35]]<ref name=":1">https://uk.finance.yahoo.com/quote/TSLA/profile?p=TSLA</ref>
|-
| Asset class|| [[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|| [[Industry::Consumer Cyclical]]<ref name=":1" />
|-
| Country of incorporation|| [[Country of incorporation::United States]]<ref name=":2" />
|-
| Minimum investment amount|| [[Minimum investment amount::$10]]<ref name=":10">https://www.business2community.com/stocks/buy-tesla-stock</ref>
|-
| Maximum investment amount|| [[Maximum investment amount::$950.54 billion]]<ref name=":1" />
|-
| Current valuation|| [[Current valuation::$950.54 billion]]<ref name=":1" />
|-
| Investor type|| [[Investor type::All]]
|-
| Bid/ask spread (%)|| [[Bid/ask spread::0.0015063%]]<ref name=":1" />
|-
| Commission amount|| [[Commission amount::Zero]]<ref name=":10" />
|-
| Market|| [[Market::Public]]<ref name=":1" />
|}


'''Recent contract wins and transition to SaaS model'''
==Summary==


1Spatial has announced a three-year contract worth c $0.8m with Montana to implement its Next Generation 911 solution. This Montana win, the seventh US state to choose the 911 solution, recent large multi-year contract wins and solid sales growth of 8% y-o-y in H122 point to SPA’s successful execution of its three-year transition plan. We forecast steady revenue growth of 5% to £25.8m in FY22e and 6% to £27.5m in FY23e. We see gross and EBITDA margins improving over FY22 and FY23 as SPA continues its transition to a SaaS model focused on high-margin recurring licence revenue.
*Tesla is on a mission to accelerate the world's transition to sustainable energy.<ref name=":3">https://www.tesla.com/about</ref>
*The company sells and leases high-performance fully electric vehicles and energy generation and storage systems, and offers services related to its products. 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>
* Assuming that Tesla increases its share of the automotive market to 10% (from 2%) and other assumptions, the expected return of an investment in the company over the next five years is negative 24%. In other words, an £1,000 investment in the company is expected to return £760 in five years time.
* The degree of risk associated with an investment in Tesla is 'high', with the shares having a beta that is 112% above the market (2.12 vs. 1).


'''LMDM: Opportunity in growing market'''
==Operations==


As technologies like smartphones and digital mapping continue to advance, their dependency on spatial information for physical assets, buildings and so on has increased the need for precise and correct location data. Combined with the trend of increased collaboration between firms, the rapidly transforming geospatial industry is expected by Markets and Markets to enjoy c 12% growth in the medium term, providing a significant opportunity for SPA’s Location Master Data Management (LMDM) business, where it is considered a market leader.
=== How did the idea of the company come about? ===
The idea of the company came about when the now founding team of the company realised that the current way that humankind is meeting its energy needs is unsustainable and bad for the planet.<ref name=":9">https://www.tesla.com/en_GB/blog/secret-tesla-motors-master-plan-just-between-you-and-me</ref>


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


1Spatial trades at 12.4x FY22e EV/EBITDA, a significant discount to its software peers, and using a peer multiple of 27.7x implies a share price of 99p, about 117% above the current price. While much of the discount reflects SPA’s current lower growth and margins, if the pace of contract wins is maintained and 1Spatial continues to execute on its land and expand strategy, we anticipate there could be a reduction in this valuation gap.
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" />


==Company description: Digitally mapping the world==
Accordingly, in the team's quest to accelerate the world’s transition to sustainable energy, the Tesla company was born.


1Spatial provides LMDM software, solutions and business applications to businesses and governments working with geospatial data – information on where people, buildings, pipes, roads and many other objects are located. As customers build digital maps of energy systems for electrical vehicle charging stations, map the piping for utilities to manage customers in real time, verify locations for 911 emergency services, record where assets can be found to reduce the risk of flooding and generate national maps to support green and COVID-19 related projects, more and more geospatial data are required and created. 1Spatial’s software tools improve the quality and accuracy of these location data and ensure they are efficiently deployed for use. Ultimately, 1Spatial’s LMDM products allow clients to unlock the value in their geospatial data, ‘enabling better decisions and greater insights.’ Note the term ‘geospatial’ data is often interchanged with ‘location’ or ‘spatial’ data and those terms will be used interchangeably throughout this report.
=== What's the mission of the company? ===


The 1Spatial Platform is a key element of SPA’s business model. It consists of a set of software components that are data and system agnostic, giving it the flexibility to work across a wide variety of data systems and system platforms. The goal is to ensure the location master data are current, complete, correct, consistent and compliant, thus giving customers the ability to use their geospatial data on any device, anywhere and anytime. That is, SPA’s technology allows users to capture large amounts of complex geospatial data in various formats, conduct error checks and integrate those data into third-party geographic information systems (GIS). It is based on an established, customisable rule set that performs the error check on geospatial data. Unlike traditional master data management, LMDM covers both spatial and non-spatial data and enables customers to better manage both types.
Tesla is a company that's on a mission to accelerate the world's transition to sustainable energy.<ref name=":3" /> In other words, the company's objective is to accelerate the world's transition to energy that meets the needs of the present without compromising the ability of future generations to meet their own needs.


1Spatial has made significant investments in its cloud infrastructure, as its platform can be deployed as a SaaS solution in the cloud, on-site or a combination of the two. With its solutions now running in the cloud, this makes them even more scalable. As customers generate more and more location data, 1Spatial’s platform scales up with the growing quantities of location data. For instance, the increasing number of mobile devices and IoTs are producing even larger spatial datasets, and as it operates in the cloud, 1Spatial’s platform’s ability to check, validate, correct and update all this information is not limited by on-site data resources. As it builds its elastic, multi-tenant cloud platform, this should support its increasing market penetration and scalable growth.
=== What are the main offerings of the company? ===


1Spatial’s ability to automate the error-checking process, its domain expertise, extensive experience with geospatial data and data agnostic approach all provide SPA a distinct competitive advantage over others in the LMDM space such as Esri and IQGeo. Furthermore, a key competitive advantage for 1Spatial is that it has one of the only platforms (1Integrate), to our knowledge, that can control, integrate and validate such large, complex amounts of geospatial data from multiple sources.
The company's main offerings fall into two main segments: (1) automotive and (2) energy generation and storage.<ref name=":4" />


As Exhibit 1 displays, 1Spatial segments itself by geographic locations, as it operates across the globe with most of its business originating in Europe, UK/Ireland and the United States. While it is headquartered in Cambridge, UK, its clients include a wide variety of enterprise customers around the world, including Ordnance Survey, the UK government’s Geospatial Commission, the city of Marseille, the Land and Property Services in Northern Ireland, several US states (California, Michigan, etc), Google, Northern Gas Networks and the Bureau of Meteorology in Australia. 1Spatial generates both recurring revenues (licences, support and maintenance) and one-time items such as services and perpetual licences as shown in Exhibit 2. Note that perpetual licences are a legacy source of revenue, and SPA has stopped actively selling perpetual licences, as its focus is on recurring term licences. Moreover, the emphasis is on developing pure cloud-SaaS revenue through its business apps.
==== Automotive ====


== A complete platform of LMDM software components ==
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 1Spatial platform is a complete set of LMDM software components, combining servers, portals, dashboards, software development kits, APIs, data connectors, business-focused applications and the patented 1Integrate rule engine. Its portfolio of products includes several items:
===== Current offerings =====


* 1Integrate: the patented rules engine that conducts automated data validation, cleansing, transformation, enhancement and integration of spatial and non-spatial enterprise data. It ensures the data are up to the required standards and remain consistent across workflows, removes data silos and integrates the siloed data into single datasets, creating a single source of truth for data. 1Integrate automates the correction of invalid data and fixes geometric and attribution errors. It works with different formats and datastores, offering clients flexibility as their requirements change, and is scalable, growing with the client’s needs without affecting workflows.
====== Automotive sales ======
As of 2nd June 2022, the company offers four main car models: Model S, Model 3, Model X and Model Y.


Ensuring that geospatial data meet required standards is crucial for business applications, which is where 1Integrate’s rules engine operates. For example, most location data fit in one of three categories: point (the tree is here), lines (roads or utility networks go from here to there) and polygons (this building is a shape with these dimensions). The standards for the data include no overlaps on boundary lines, that all polygons are closed and no gaps in the land or data. 1Integrate ensures that these standards are met. Facilities management projects such as those with a company like Google or IBM would run checks to ensure every room has a door, there are no desks in corridors or on top of walls and so on. Standards can be formal (eg NENA, a US 911 standard; MUDDI, used in the UK for projects like the National Underground Asset Register (NUAR) and the ‘Red Book’ for UK traffic management) or informal, set by companies based on their own operations. Whether it be formal or informal standards, 1Integrate ensures that they are met.
'''Model S'''


* 1Integrate for ArcGIS: designed for the ArcGIS platform (an Esri product that developers can use to build mapping and spatial analysis applications), it provides automated data validation and enhancement. 1Integrate for ArcGIS is available on tools such as ArcGIS Server and ArcGIS Desktop and it allows clients to assess their data, making sure they meet specifications and fit the intended purpose. Moreover, it can perform data re-engineering tasks, including cleaning, transforming and creating new data from existing data assets.
Model S is the fastest accelerating and longest ranging car that Tesla provides, with a zero-to-60 miles per hour acceleration of 3.1 seconds and a maximum distance range on a single battery charge of 405 miles, respectively.<ref>https://www.tesla.com/</ref> The price of the car in the US is $99,990.<ref name=":8" />


* 1Data Gateway: the self-service web portal for data validation, processing and analytics, applying 1Spatial’s rules-based approach for managing data. It is designed to be user friendly, as each process has defined and simple workflows that guide clients through project configuration or data delivery. As with 1Integrate, 1Data Gateway can scale up and achieve high performance, even under heavy client use, with the ability to add unlimited users.
[[File:Model S.jpg]]


* 1Edit: allows clients to quickly validate and edit 2D and 2.5D (using 2D data to create what appears to be 3D or data with heights) spatial data with high levels of quality assurance. 1Edit helps ensure data are correctly aligned and connected and can automatically edit shared geometry. Moreover, it integrates well with the 1Spatial Management Suite, conducting the data editing step that is part of the overall management of location data.
'''Model 3'''


* 1Generalise: using a rules-based, automated data generalisation service, it automatically creates multiple smaller-scale data sources from large-scale data sources. This provides time and cost savings for clients when producing smaller-scale data products and enables clients to rapidly generate new data products by automating the product generation.
Model 3 is the lowest priced car that Tesla provides, selling in the US at $46,990.


* 1Spatial Management Suite: supports efficient and consistent planning, maintaining and publishing of client data, while automating their production workflows. This is a full end-to-end management suite covering the data workflow process, from the planning stages through delivery. It has a flexible, component-based structure that allows clients to customise how they interact with their data and manage data product creation.
[[File:Rhd-model-3-social.png]]


* 1Spatial LMAP: SPA’s location mobile app platform (LMAP) gives companies the ability to collect, edit and validate data in the field, trimming the need for extensive quality control checks at the central office. LMAP also takes a data agnostic approach, fully integrating with a variety of data sources.
'''Model X'''


* FME: SPA is a Platinum Partner with Safe Software and reseller of the FME product portfolio, a data integration platform by Safe Software with products such as FME Desktop, FME Server, etc. The FME product is designed to translate and transform data between hundreds of different spatial and tabular formats, readying the data to be used, analysed, published and/or shared.
Model X is the largest cargo capacity car that Tesla provides, with a cargo capacity of 88 cubic feet. The price of the car in the US is $114,990.


'''3D market opportunity and 1Integrate 3D'''
[[File:MX-Hero-Desktop.jpg]]


Consider how geospatial data have changed over the last several decades. In the 1980s, most 3D planning was done via CAD systems and focused on building planning and development. Simply capturing data was the primary focus, making the data ‘look good’ on paper or a presentation, while validation and quality checks were usually only done visually. Jumping forward to 2021, 3D data is much more integrated, expanding to national cityscapes and volumetric analysis. Instead of 2D, flat buildings that are merely a shell, 3D geospatial data allow users to determine the volumes and topologies of actual objects. 1Integrate 3D enables companies to manage 3D data alongside 2D/2.5D data in a single data environment.
'''Model Y'''


The use of 3D geospatial data is increasing, as companies transition from 2D and 2.5D. No longer are 3D data only seen in construction projects; they are now used by many entities for various other purposes, such as with national mapping agencies. A key first step in this move to 3D involves companies cleaning up their 2D and 2.5D data so they can be prepared for transitioning into the 3D format. In many cases data has been gathered from different agencies, land registries and emergency services and it may not be consistent from data source to data source. For instance, one group may consider a five-bedroom house as being a single flat, while another may view it as five flats, each with one bedroom. So, when emergency services are called to the location, there can be confusion over where the actual incident is occurring, which could lead to a delay in providing emergency medical treatment or stopping a crime.
Model Y is the lowest price per cargo capacity and lowest price per seat car that Tesla provides, at $829 per cubic feet and $8,999 per seat, respectively. The price of the car in the US is $62,990.


1Spatial products can also help in situations where organisations are in the midst of developing 3D data. For instance, a firm may have 2D data and by estimating heights can infer what buildings that data goes with and then attempt to generate some initial 3D measurements. SPA can then come in and clean, validate and integrate that 3D information with existing data. In some countries, utilities are evaluating ways to charge rates based on the volume of the building and 3D data are needed to make this change.
[[File:Model y red.jpg]]


With its 1Integrate 3D platform, SPA is at the forefront of this expanding market. With the added complexity of 3D data, it is even more paramount that data quality and integration is ensured, which is where 1Integrate 3D comes into play. SPA’s 1Integrate 3D platform supports 3D data in its data stores, rules and actions, allowing automated inspection, validation and change detection. This enables customers to manage design facets such as sunlight available, noise propagation, heat loss, trench planning and building occupancy, whether it be in facilities, smart cities, or infrastructure planning. SPA can also help with creating some of the 3D data, such as implying building heights from aerial drones or photographs.
A detailed comparison of the Tesla vehicles is shown in the two tables below.


Overall, we see the 3D market as still in development with organisations gathering and converting their data, with much of the growth likely two or three years away. 3D-associated revenues are less than 5% of total revenues and we do not forecast them as being a significant source of revenue for SPA until after 2022/23. However, once 3D data likely become the standard in the future (as 2D and 2.5D are today), it could become a significant source and driver of SPA’s revenues.
{| class="wikitable"
|+All Tesla vehicles competition comparison
!Category
! colspan="2" |Model S
! colspan="2" |Model X
! colspan="3" |Model 3
! colspan="2" |Model Y
|-
!Type
!Standard<ref name=":8">https://www.tesla.com/models</ref>
!Plaid<ref name=":8">https://www.tesla.com/models</ref>
!Standard<ref name=":13">https://www.tesla.com/modelx</ref>
!Plaid<ref name=":13" />
!Rear-Wheel Drive<ref name=":14">https://www.tesla.com/model3</ref>
!Long Range<ref name=":14" />
!Performance<ref name=":14" />
!Long Range<ref name=":15">https://www.tesla.com/modely</ref>
!Performance<ref name=":15" />
|-
|Is the vehicle fully electric?
| style="background: orange; color: white;" |Yes
| style="background: orange; color: white;" | Yes
| style="background: orange; color: white;" |Yes
|style="background: orange; color: white;" | Yes
| style="background: orange; color: white;" |Yes
|style="background: orange; color: white;" |Yes
|style="background: orange; color: white;" |Yes
| style="background: orange; color: white;" |Yes
|style="background: orange; color: white;" |Yes
|-
|What's the top acceleration of the vehicle?
| style="background: orange; color: white;" |3.1 seconds
|style="background: green; color: white;" |1.99 seconds
| style="background: orange; color: white;" |3.8 seconds
|style="background: orange; color: white;" |2.5 seconds
| style="background: red; color: white;" |5.8 seconds
|style="background: orange; color: white;" |4.2 seconds
|style="background: orange; color: white;" |3.1 seconds
| style="background: orange; color: white;" |4.8 seconds
|style="background: orange; color: white;" |3.5 seconds
|-
|What's the maximum distance range of the vehicle on a single battery charge?
| style="background: green; color: white;" |405 miles
|style="background: orange; color: white;" |396 miles
| style="background: orange; color: white;" |348 miles
|style="background: orange; color: white;" |333 miles
| style="background: red; color: white;" |272 miles
|style="background: orange; color: white;" |358 miles
|style="background: orange; color: white;" |315 miles
| style="background: orange; color: white;" |330 miles
|style="background: orange; color: white;" |303 miles
|-
|What's the top speed of the vehicle?
| style="background: orange; color: white;" |155 miles per hour
|style="background: green; color: white;" |200 miles per hour
| style="background: orange; color: white;" |155 miles per hour
|style="background: orange; color: white;" |163 miles per hour
| style="background: orange; color: white;" |140 miles per hour
|style="background: orange; color: white;" |145 miles per hour
|style="background: orange; color: white;" |162 miles per hour
| style="background: red; color: white;" |135 miles per hour
|style="background: orange; color: white;" |155 miles per hour
|-
|Which design type is the vehicle?
| style="background: orange; color: white;" |Sedan (i.e. car)
|style="background: orange; color: white;" |Sedan (i.e. car)
| style="background: orange; color: white;" |SUV (i.e. car)
|style="background: orange; color: white;" |SUV (i.e. car)
| style="background: orange; color: white;" |Sedan (i.e. car)
|style="background: orange; color: white;" |Sedan (i.e. car)
|style="background: orange; color: white;" |Sedan (i.e. car)
| style="background: orange; color: white;" |SUV (i.e. car)
|style="background: orange; color: white;" |SUV (i.e. car)
|-
|What is the safety rating of the vehicle?
| style="background: orange; color: white;" |5 out of 5 stars
|style="background: orange; color: white;" |5 out of 5 stars
| style="background: orange; color: white;" |5 out of 5 stars
|style="background: orange; color: white;" |5 out of 5 stars
| style="background: orange; color: white;" |5 out of 5 stars
|style="background: orange; color: white;" |5 out of 5 stars
|style="background: orange; color: white;" |5 out of 5 stars
| style="background: orange; color: white;" |5 out of 5 stars
|style="background: orange; color: white;" |5 out of 5 stars
|-
|How many seats does the vehicle have?
| style="background: red; color: white;" |5 seats
|style="background: red; color: white;" |5 seats
| style="background: orange; color: white;" |7 seats
|style="background: red; color: white;" |6 seats
| style="background: red; color: white;" |5 seats
|style="background: red; color: white;" |5 seats
|style="background: red; color: white;" |5 seats
| style="background: orange; color: white;" |7 seats
|style="background: red; color: white;" |5 seats
|-
|What's the cargo capacity of the vehicle?
| style="background: red; color: white;" |28 cubic feet
|style="background: red; color: white;" |28 cubic feet
| style="background: orange; color: white;" |88 cubic feet
|style="background: orange; color: white;" |88 cubic feet
| style="background: red; color: white;" |23 cubic feet
|style="background: red; color: white;" |23 cubic feet
|style="background: red; color: white;" |23 cubic feet
| style="background: red; color: white;" |76 cubic feet
|style="background: red; color: white;" |76 cubic feet
|-
|Which drive wheel does the vehicle have?
| style="background: orange; color: white;" |All-wheel drive
|style="background: orange; color: white;" |All-wheel drive
| style="background: orange; color: white;" |All-wheel drive
|style="background: orange; color: white;" |All-wheel drive
| style="background: red; color: white;" |Rear-wheel drive
|style="background: orange; color: white;" |All-wheel drive
|style="background: orange; color: white;" |All-wheel drive
| style="background: orange; color: white;" |All-wheel drive
|style="background: orange; color: white;" |All-wheel drive
|-
|What's the price of the vehicle?
| style="background: orange; color: white;" |$99,990
|style="background: orange; color: white;" |$135,990
| style="background: orange; color: white;" |$114,990
|style="background: red; color: white;" |$138,990
| style="background: green; color: white;" |$46,990
|style="background: orange; color: white;" |$55,990
|style="background: orange; color: white;" |$62,990
| style="background: orange; color: white;" |$62,990
|style="background: orange; color: white;" |$67,990
|-
|What's the vehicle's price per cargo capacity?
| style="background: orange; color: white;" |$3,571 per cubic feet
|style="background: red; color: white;" |$4,857 per cubic feet
| style="background: orange; color: white;" |$1,307 per cubic feet
|style="background: orange; color: white;" |$1,579 per cubic feet
| style="background: orange; color: white;" |$2,043 per cubic feet
|style="background: orange; color: white;" |$2,434 per cubic feet
|style="background: orange; color: white;" |$2,739 per cubic feet
| style="background: green; color: white;" |$829 per cubic feet
|style="background: orange; color: white;" |$895 per cubic feet
|-
|What's the vehicle's price per seat?
| style="background: orange; color: white;" |$19,998 per seat
|style="background: red; color: white;" |$27,198 per seat
| style="background: orange; color: white;" |$16,427 per seat
|style="background: orange; color: white;" |$23,165 per seat
| style="background: orange; color: white;" |$9,398 per seat
|style="background: orange; color: white;" |$11,198 per seat
|style="background: orange; color: white;" |$12,598 per seat
| style="background: green; color: white;" |$8,999 per seat
|style="background: orange; color: white;" |$13,598 per seat
|}


== Transitioning to a SaaS model ==
{| class="wikitable"
|+Which car is the winner in the following categories?
!Category
!Winner
!Notes
|-
|Which Tesla car has the fastest acceleration?
|Model S Plaid
|The zero to 60 miles per hour acceleration of the car is 1.99 seconds.
|-
|Which Tesla car has the longest range?
|Model S
|The range of the car is 405 miles.
|-
|Which Tesla car has the highest top speed?
|Model S Plaid
|The top speed of the car is 200 miles per hour.
|-
|Which Tesla car has the largest cargo capacity?
|Model X and Model X Plaid
|The cargo capacity of the car is 88 cubic feet.
|-
|Which Tesla car has the most seats?
|Model X and Model Y Long Range
|The number of seats in the car is 7 seats.
|-
|Which Tesla car is the lowest priced?
|Model 3 Rear-Wheel Drive
|The price of the car is $46,990.
|-
|Which Tesla car has the lowest price per cargo capacity?
|Model Y Long Range
|The price per cargo capacity of the car is $829 per cubic feet.
|-
|Which Tesla car has the lowest price per seat?
|Model Y Long Range
|The price per seat of the car is $8,999 per seat.
|}


1Spatial was historically known as a geospatial software and services company. Part of its strategy includes transitioning into a SaaS company focused on growing its recurring, higher-margin licence revenue. Historically, most sales were from long-term contracts, which were lower margin and led to more volatile revenue. Transitioning to a SaaS-based delivery company is intended to lead to higher margins and produce more repeatable and predictable revenue. For instance, to support this transition, 1Spatial is building its SaaS multi-tenant and scalable cloud platform, which increases SPA’s addressable market (by addressing customers seeking cloud-based solutions), meets growing customer demand for web-based solutions and is scalable based on the size of the client’s dataset. The plan is to launch this platform by the end of FY22, which will provide more ‘pay as you go’ pricing schemes and lower the entry price point for new customers.
====== 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" />


Evidence of this transition to a SaaS model can be seen in recent results and contract wins. In early December 2021, SPA was awarded a £0.6m contract with the Rural Payments Agency (RPA, an executive agency of the UK’s Department for Environment, Food and Rural Affairs), £0.4m of which is software licences. RPA, a current customer, will use the 1Edit mobile application to enable the collection of accurate and correctly formatted location data by inspectors via mobile devices. As a result, this adds to SPA’s growing amounts of recurring, high-margin software revenue. Furthermore, in H122, 1Spatial grew its annualised recurring revenue (ARR) by 12% to £11.6m, with term licence ARR (the ARR of term licences) increasing by 63%. Moreover, its new £8m contract announced in September 2021 with a department of the UK government (which we believe is also the largest win in company history) is heavily weighted towards recurring software licence fees (75%). Altogether, this transition to a SaaS model has the potential to significantly enhance shareholder value, in our view, driving increases in higher-margin recurring revenue.
====== 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" />


== LMDM opportunity: A rapidly changing market ==
====== Other current offerings ======


Knowing where a physical asset, entity or building is located has become crucial and a key requirement for businesses and governments. The amount of location data generated has dramatically increased in recent years, with data generated from smartphones, IoT, automotive GPS, digital maps, Big Data etc. As a result, the market is rapidly transforming, with more companies using more location data from more sources in more formats for more use cases. One challenge facing companies today is that this wide and expanding variety and quantity of data is held in different data sets, in different silos, in different formats and different systems for different purposes. Some data are structured, some are not, and come from different technologies over different times. Efficiently managing and using this mix of location data can be complex, costly and difficult.
'''Service and warranty'''


This is where LMDM, specifically 1Spatial’s technology, comes into play. SPA’s platform is a set of software and components, including its 1Integrate rules engine, which allows clients to gather geospatial data from multiple sources across different systems. It helps check, cleanse, validate, update and analyse these data and provides the accurate location data that companies need. In fact, recent Harvard Business Review Analytic Services research showed that companies that implement master data management programs, which include location data, can ‘leverage their data as a ‘strategic asset’ to further their success – or even their survival – in a competitive business landscape.’ A primary cause of problems for companies today is inaccurate, incomplete, or inconsistent data. Managing data, whether it be location, customer or financial, and ensuring there is a single source of truth, is crucial to companies – a key theme driving demand for SPA’s solutions.
<u>Service</u>


'''Collaboration: Not just for an enterprise, but for the nation'''
Other offerings include the servicing of Tesla vehicles, at company-owned service locations and through Tesla Mobile Service technicians.<ref name=":4" />


One key theme in the LMDM market is that of collaboration – the building of an ecosystem where companies and public agencies begin to share data with each other. Rather than keeping data siloed within one enterprise, it is shared with the community and nation. Historically, much of SPA’s business involved integrated data from different sources, but only within one company. Now, it is combining data from different companies and working with open platforms where companies share information. Geospatial data from these multiple sources and types are run through 1Integrate and 1Data Gateway, ensuring the information is accurate and kept up to date as it changes. As customers collaborate with various firms and their data, SPA plays a key part in supporting the ecosystem as it makes the needed connections between entities with their 1Spatial platform.
<u>Extended service plans</u>


An example of the importance of collaboration is with the NUAR contract. Here, the NUAR is a platform for sharing data (including geospatial) from numerous groups, including underground asset owners, utilities, etc, with others who need that information. The platform will accomplish three tasks as these groups collaborate with each other. First, asset owners will make their data available for planning excavations and safe digging. Second, planners and excavators will be able to easily access underground asset data. And third, information observed on site will be fed back to asset owners to improve their asset records, such as when someone excavates and discovers something new or that was not where they thought it would be. For instance, there are c 60,000 utility strikes per year in the UK, costing about £2.4bn annually. The NUAR should reduce utility strikes and improve the productivity and efficiency of those working with the data, with 1Spatial’s solutions working to manage all the location master data, ensuring it is correct, verified and updated. This theme of collaboration bears watching, because as more companies build apps to connect with each other and more portals are developed to share data among the larger community, the now connected group will need SPA’s tools and solutions to validate, correct and integrate even greater amounts of data.
The company offers extended service plans, which provide coverage beyond the new vehicle limited warranties for certain models in specified regions.<ref name=":4" />


== GIS market and three growth pillars ==
'''Financial services'''


1Spatial operates in the growing global market for GIS or geospatial software and services. The market opportunity is significant and Allied Market Research estimates the global geospatial software market will reach $8bn by 2025, growing at a 12% CAGR. Key drivers of this growth include the development of smart cities, urban planning and the increased use of spatial data in utility and transportation markets. GIS technologies are being used in a growing number of applications too, including disaster planning, mining, satellite navigation and mobile devices, all of which expand the addressable market for GIS solutions. Furthermore, 1Spatial management estimates that 80% of all data collected have a location element or associated field. Unfortunately, much of these data are difficult to access and use, as they are stored in different systems, formats and repositories. Having a system that can compile, verify and integrate these data is critical, and 1Spatial’s competitive advantage over firms such as Hexagon, IQGeo and EBA Engineering is found in its knowledge, expertise and product solutions for GIS data. 1Spatial focuses on three target GIS segments, government, utilities and transportation and infrastructure, all of which are benefiting from the increased demand for spatial data.
<u>Purchase financing</u>


'''Government'''
The company offers loan financing arrangements for its vehicles in certain jurisdictions in North America, Europe and Asia.<ref name=":4" /> In certain situations, Tesla 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" />


The government segment includes government-sponsored initiatives in city master planning, state-wide location master databases, asset management, surveillance, sustainability, survey and mapping, emergency safety planning and so on. Looking forward, structural tailwinds include infrastructure spending (eg President Biden’s Job Plan), the UN’s call for sustainable development goals, several UK government initiatives (Net Zero Strategy, ‘Build Back Better’ initiative, and transition to a new Environmental Land Management Scheme), the Next Generation 911 systems (NextGen 911) in multiple US states and Northern Ireland’s digital transformation programme. There are multiple use cases for SPA’s products among these initiatives. For instance, when planning the location of electric vehicle charging stations and wind farms, the government’s designers need to know where spatial assets can be found. Are they above or below ground? Are there utility lines nearby or will more need to be added? Another example is with the Ordnance Survey in the UK. For it to effectively map the nation, it needs GIS data on where key geographical features, elevation, water and road networks are physically located. All these activities should grow the demand for ensuring the GIS data is clean, validated and integrated, thus potentially driving business to SPA and its GIS solutions.
<u>Insurance</u>


'''Utilities'''
As part of the company's ongoing effort to decrease the total cost of ownership, it offers insurance products on its vehicles.<ref name=":4" /> The products are currently available in five US states (Arizona, California, Illinois, Ohio and Texas), and the company plans to offer the products into new geographical markets.<ref name=":4" />


Utilities are also increasing their use of GIS data, with increased demand coming from power and gas distribution, green energy, water network management, etc. These include the digital mapping of the UK energy system to support NetZero and improved incident management initiatives for utilities. An interesting use case is with gas networks that are looking to connect with alternative energy sources, such as hydrogen gas. As these grids expand and maintain their piping networks, they require precise, correct GIS data, which is where SPA’s platforms come into play in creating a digital twin of the system. Another issue is that many of the historical utility systems worked with imperfect location data, but with the new systems, they need correct information and will not operate with incorrect data. Another example is NUAR, where the government is working to determine and map utility assets, pipes, cables, etc. Now companies are sharing data with NUAR and outside firms will start to use those data for key decisions, there is much less tolerance for errors in the GIS data.
=====Future offerings=====


'''Transportation and infrastructure'''
======Automotive sales======


Finally, transportation and infrastructure are also experiencing increased demand, with traffic management plans, highway/road data, electrical charging station planning, etc, all needing accurate, verified GIS data. Contract wins include Google’s use of 1Data Gateway and 1Integrate in managing its facilities and the US Highways Performance Management Systems.
'''Cybertruck'''


The automation of traffic management platforms is an example of where 1Spatial’s solutions are applied in the transportation sector. The ‘Red Book’ is a UK government document that includes the building codes, speeds, required signage, etc, needed when constructing roads, pedestrian lanes and carriageways. Historically, construction planners and designs had to manually consult and review the book to ensure compliance, which could add days or weeks to the timelines. 1Spatial’s solutions integrate data from numerous sources, including the Ordnance Survey, and automate the Red Book process in SPA’s rules-based engine. For instance, a customer who wanted to rebuild a highway could go to 1Spatial’s cloud-based platform, run their plans through it and in around 30 seconds determine the rules and regulations needed, a considerable time savings compared to the old, manual process. Furthermore, SPA’s platform keeps the Red Book rules up to date, so clients know they are referencing the latest regulations and provides an audit trail for use if any issues or concerns are raised by governmental authorities. SPA has taken the concept of the Red Book, automated it, put it on the cloud and made it accessible to many clients in seconds rather than days or weeks.
Cybertruck is a truck, a motor vehicle designed to transport cargo, carry specialised payloads, or perform other utilitarian work. What will be unique about the offering is that it will be the safest vehicle that Tesla provides. 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>


Another example involves the multi-tenancy platforms that provide SaaS solutions. In many countries, surveyors will gather data for buildings and properties and before they send it on, they need to ensure it complies with regulations and codes. 1Spatial created a cloud hub for surveyors to upload that data and within c 90 seconds they can receive a report on any issues or corrections needed. In other words, this is validation as a service, another potential business avenue for SPA.
[[File:Cybertruck-Hero-Desktop.jpg]]


'''Non-GIS data'''
'''Tesla Roadster'''


While GIS data are the primary focus of SPA’s business model, they do interact with non-GIS data. Non-GIS data often come packaged with GIS information, so 1Integrate would run its rules, checks and verifications against the non-GIS data too. For instance, data on an underground pipe would include GIS data (location, dimensions, etc) but also non-location data (age of pipe, construction material, etc) and so both types of data are evaluated by SPA’s solutions. Checks can be carried out on non-GIS data, but generally the focus is on the spatial element. 1Spatial does not market its solutions for non-GIS data and any business specifically for non-GIS solutions (without associated GIS data) would be small.
The Tesla Roadster is a car. What will be unique about the offering is that it will be the fastest accelerating and longest ranging car that Tesla provides. The price of the offering is around $200,000.<ref>https://carbuzz.com/cars/tesla/roadster</ref>


'''Three pillars of growth'''
[[File:Tesla-roadster.jpg]]


1Spatial’s growth strategy is based on three pillars: Innovation, Customer Relationships and Smart Partnerships. First, Innovation’s focus is to make continued investments in the two key areas of its 1Spatial Platform: Data Management Solutions (ensuring data are correct, consistent and compliant) and Business Applications (using data through business applications to solve specific business issues). As mentioned previously, SPA has also launched 1Data Gateway, a self-service portal to validate, process and analyse spatial data, which has led to contracts with Google and the states of Michigan and California.
'''Tesla Semi'''


The second pillar, Customer Relationships, has emphasised developing trusted partners in location data. This includes increasing the number of webinar opportunities, growing online content and increasing customer engagement. Key to this is its Land and Expand strategy (discussed below in the US market opportunity section), which focuses on starting small with new customers then growing into contracts once they become trusted partners. This has led to several customer expansion contracts with existing customers such as Northern Gas Networks, Google and a large French water utility.
Tesla Semi is a semi-trailer truck, a motor vehicle that is designed to transport large cargo, via one or more of its attached trailers. What will be unique about the offering is that it will be the largest cargo capacity vehicle that Tesla provides. The price of the offering is around $150,000.


The last pillar, Smart Partnerships, emphasises developing partnerships with major technology consultants, software platform providers and businesses in adjacent industries. This includes collaborating with select partners in bidding on large contracts, often in competitive tenders, where 1Spatial’s role is to be the data integrity provider, providing its domain expertise in handling geolocation data. SPA may not have the size to be the prime on these large tenders, but it does perform a key role for partners. For instance, SPA recently won what we believe are the two largest contracts in company history (£8m with a department of the UK government and £6.5m with the Geospatial Commission) and both were in collaboration with strategic partners. According to management, choosing the right partner to join was a critical factor in the wins and it expects to continue this trend of bidding alongside select partners. 1Spatial has also developed a close strategic partnership with Esri, a global market leader in GIS database software. Notably, 1Spatial has also won an award from location intelligence industry leader Esri for its product integration within Esri’s ArcGIS Enterprise. It also entered into a new partnership agreement with Ordnance Survey, which resulted in securing the pilot for the Energy Networks Association.
[[File:Tesla-semi.jpg]]


'''UK/Ireland market opportunity'''
======Ride-hailing service======
Tesla has said that it intends to establish an autonomous Tesla ride-hailing network, enabling people to hail a ride.<ref name=":4" /> What's unique about the ride-hailing service is that it's expected to be faster and cheaper than the alternatives. Information about the expected price of the service has yet to be disclosed.


The UK/Ireland region has historically provided about 34–40% of SPA’s revenues (34% in FY21) and, after growing at 27% in FY19, decelerated in FY20 to 3% and then fell 4% in FY21 to £8.4m. However, much of the FY21 result was due to the timing of closing out some contracts, and total sales orders did grow across the year. ARR also continues to grow, rising 17% to £3.9m in FY21, as newer contracts increasingly contain higher levels of recurring revenue. Overall, much of SPA’s UK/Ireland business has been governmental or agency related, such as contracts with the UK Environment Agency, Geospatial Commission and NUAR, Ordnance Survey, Defra and the RPA. Utility wins include Northern Gas Networks’ migration to a new Esri model, while the Traffic Management Plan Automation (TMPA) initiative is an example of transportation and infrastructure wins.
====Energy generation and storage ====


Looking forward, we see revenues growing by 3% in FY22e and then accelerating to 6% in FY23e as more entities (especially governmental departments and agencies) digitise their data and move to data-driven businesses where accurate location data are a key component. We expect UK/Ireland to produce 34% of SPA’s revenue, reaching about £9.4m by FY23e. We see growth in the UK/Ireland business driven by increased government spending on infrastructure, investments derived from projects related to the UN’s sustainable development goals, extended business with current clients from the Land and Expand strategy (described further below), digital mapping of the UK’s energy system, increased business from facilities management projects, smart partnerships with large consulting firms and software platforms, the growing ecosystem of collaboration across entities and the expansion of shared location data, which requires solutions like SPA’s platform, such as with the NUAR contract, the TMPA app’s move towards minimum viable project and beta testing, the UK government’s Net Zero Strategy and SPA’s partnerships, which continue to generate new opportunities in the geospatial and LMDM markets.
The energy generation and storage segment includes the sales and leasing of solar energy generation and energy storage products and related services and sales of solar energy systems incentives.<ref name=":4" />


'''EU market opportunity'''
=====Current offerings =====


Over the last few years, the portion of 1Spatial revenues from Europe has fluctuated between 36% and 48%, with FY21 coming in at 45% of total revenues or £11m. Furthermore, Europe’s growth has also shown wide variations, moving between a 12% decline in FY19 to 76% growth in FY20 (mostly due to the GI purchase, as described below). In FY21, growth settled at 9%, although flat on a like-for-like basis as 1Spatial’s results benefited from nine additional months of acquired revenues. Much of the European business was utility related (a large water utility in France, Nantes’ Water Department), transportation and land related (Seine Grand Lacs, Strasbourg Eurométropole) and/or comprising solutions from the Esri partnership.
======Energy generation and storage sales======


Earlier in 2021, SPA also announced the final stage of integration of Geomap-Imagis (GI), which was acquired in May 2019. GI provides solutions across transportation, utilities, government and facilities, primarily based on Esri’s ArcGIS platform. Aside from adding technical capability, market presence and scale, the acquisition was intended to address the challenges SPA had faced in France and Belgium, where its Elyx solution struggled to compete with ArcGIS, as the EU market is very competitive. With the GI acquisition, SPA’s European customers now have access to Esri’s global GIS platform and the opportunity for cross-selling should also drive further business. As a result of the integration, European operations are now consolidated under one management structure, with a focus on maximising the Esri relationship.
'''Powerwall'''


Over the next two years, we forecast European revenues growing at 1% per year, or about 41–44% of overall SPA revenue. Sales growth should be driven by further Esri partnership deals, increased EU government funding for infrastructure, telecom business and water and utility deals. We also see the focus shifting towards higher-value private and commercial contracts, as the current business has been weighted more towards metropolitan and government contracts.
Powerwall is a energy storage system (i.e. a type of battery).<ref name=":4" /> What’s unique about the offering is that it's the lowest priced energy storage system that Tesla provides, selling at $10,500. The energy capacity of the product is 13.5 kilowatt hour (kWh). To help put the capacity into perspective, in 2020, the average household in the United States consumed 29 kWh per day.<ref>https://www.eia.gov/tools/faqs/faq.php?id=97&t=3#:~:text=How%20much%20electricity%20does%20an,about%20893%20kWh%20per%20month.</ref> So, if the average household is powered from Powerwalls only, then it will require around two Powerwalls to power the whole house, at an average annual cost of $2,247.


'''US market opportunity'''
[[File:Powerwall2.jpg]]


While much of SPA’s business is in the UK and EU, the US is a growing market at 12% of FY21 revenues, having grown a total of 48% since FY19 to £2.9m. Overall, the US business is about one-third government, one-third transportation and one-third consumer (the majority of which is Google). Over the last 5.5 years, SPA has expanded its client base from two to c 30 in the US and is now seeing multiple contracts per year from the same clients.
'''Megapack'''


1SPA’s contract win with Montana is also evidence of its continued expansion across the US market. Montana is the seventh US state (and eight jurisdiction) to choose this 911 solution, which incorporates SPA’s 1Integrate and 1DataGateway products and enables emergency entities across the state to upload and validate their location and 911 data to comply with Next Generation 911 Act requirements. Moreover, this 911 solution has a rapid implementation time, usually only a few months from contract inception, and management believes it is much quicker than other solutions in the market.
Megapack is an energy storage system.<ref name=":4" /> What’s unique about the offering is that it's the largest energy storage system that Tesla provides, at 3.5 megawatt hour. To help put the energy capacity into perspective, each unit has enough energy to power an average of 3,600 homes for one hour. A single Megapack sells for $1,000,000.


Several key themes are responsible for the growing US GIS market. First, the overall awareness of the importance of GIS data has increased. For instance, seven to 10 years ago, many 911 systems did not have location-related data available. Now, GIS data are a part of most emergency service programmes, including NextGen 911, as well as many other applications.
[[File:Megapack-CleanerGrid-D.jpg]]


Another theme is how the GIS industry is looking for tools that will solve geospatial issues across a spectrum of business needs (such as the 911 service, highway planning and pipeline location). Companies want solutions that can used over and over in different situations and management believes that SPA has a reputation for providing versatile solutions.
'''Solar Roof'''


One notable catalyst for the US market is the recently passed Infrastructure and Jobs Act of about US$1.2tn in spending for transportation, broadband and utilities. These funds will likely include spending on Department of Transportation projects, highway improvements, etc, all of which have GIS components and would require services such as 1Integrate.
Solar Roof is a roof tile.<ref name=":4" /> 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.  


From a macro view, the US provides a significant opportunity set. For instance, while there may be one government and one department of transportation in the UK, the US has 50 states and a multitude of counties and cities that are each a potential market for 1Spatial. Each state, county or city could have 911 emergency services, a department of transportation, environmental agency and utility services, each of which relies on GIS information and would likely need a service such as 1Integrate to check, validate and cleanse their data. Whether it be utility location data, transportation and road design, city planning or 911 emergency services, the US has a significant opportunity set at the national, state, city and county government levels.
[[File:5c603e0d86d2c7c005d1df44a jVVOsV8.jpg]]


The US customer base has increased over FY21 and FY22, as shown in Exhibits 7 and 8, both in number of customers and the geographic spread. The named clients are the key wins for each year, such as the city of Los Angeles, Kansas Data Access and Support Center (DASC), Maryland Department of Transportation (DOT) and the State of Georgia in FY22. The circles represent the revenue value, with the larger ones indicating higher revenue values. Moreover, the shaded area in Exhibit 8 depicts the region covered by a letter of intent received by the Eastern Transportation Coalition to award SPA a funding/purchasing contract, with two of the states already interested in having 1Spatial do work for them once the contract is in place.
For the average house in the US, the total cost of having the solar roof is $59,700, or around $3,078 per year over the expected lifetime of the roof (the key assumptions used to determine the expected cost can be found in the table below). To help put the cost into perspective, the average energy bill in the United States is $1,380 per year, so, at the moment, meeting the energy needs of the average US household using the Tesla Solar Roof is 2x more expensive than the alternative.
{| class="wikitable"
|+Solar Roof estimated cost calculation
!Description
!Price
!Commentary
|-
|4.98 kW Solar Roof
|$40,600
|The average house in the US is 2,261 square feet in size and 2 stories in height. The warranty period of the solar roof is 25 years. Assuming that the replacement period of the solar roof is the same as the warranty period, then that equates to an annual cost of $1,624. The installation cost is included in the cost.
|-
|Roof Tear Off
|$7,600
|Roof tear off refers to the action of 'tearing' off (or removing) the existing roof, something that is required to put on the Tesla tiles. Assuming that the cost is depreciated over the same period as the Tesla tiles (i.e. 25 years), then that equates to an annual cost of $304.
|-
|1 Powerwall Battery
|$11,500
|The warranty period of the battery is 10 years. Assuming that the battery needs to be replaced at the end of the warranty period, then that equates to an annual cost of $1,150. Installation cost included.
|-
|Total price
|$59,700
|Combining all the above costs together, that equates to a total annual cost of $3,078
|}


The competition is limited in the US, as SPA’s business is in a niche industry. While this is discussed below, there are three primary sources of competition in the US. First would be potential clients who want to develop their own GIS strategies, but soon discover that SPA’s solutions are quicker and more cost-efficient with much greater accuracy. Second would be offshore firms that will use ‘eyeballing’ and basic, often generic, data cleansing tools to correct the data. Key issues with this approach are that organisations can lose control over the quality of their data and there is often no process in place to keep data quality up to date as location information, such as spatial data, can frequently change. Third would be engineering companies that may have some specific domain expertise that could score well in competitive tenders (eg around infrastructure and 911), but the data quality, integration and data compliance aspects of their tender may not score as highly as 1Spatial’s, which is very important in most tenders, in our view. We believe each 911 tender that 1Spatial wins demonstrates its domain expertise around 911.
====== Other current offerings ======
'''Service and Warranty'''


'''Land and expand: Driving US success'''
Other offerings include servicing and repairs, and extended limited warranties in certain regions.<ref name=":4" />


The Land and Expand strategy continues to propel much of SPA’s success in the US. In this strategy, SPA wins an initial contract and, once a client sees the benefits of SPA’s solutions and a successful execution of the initial contract, it awards SPA contracts in related services such as transportation and utilities. For instance, in California (CA) one of the earliest customers was Los Angeles (LA) county, which started with NextGen 911 and has now expanded to public works. Furthermore, SPA has expanded its business throughout the state, selling to DOT agencies such as Cal Trans.
'''Financial services'''


The networking among governments across state, county and local agencies must not be overlooked. Once 1Spatial wins a contract with a state or large city, it serves as a reference case for others in the same area. Many of these state, county and local government staff attend the same industry events, share success stories and discuss solutions to issues like GIS data, which has increased 1Spatial’s business. NextGen 911 highlights this strategy, where SPA began with one state and now has spread into seven states, including Georgia, California and Michigan. Evidence of this can be found in Georgia (GA), a key state where NextGen 911 uses SPA’s solutions. Remarkably, the state even created a flier for other states to show what SPA was doing – essentially advertising 1Spatial’s business to other regions. Georgia even spoke at a recent conference about the solution and the state is viewed by management as one that is invested in SPA’s success.
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" />


'''Overcoming challenges: Tech hiring and business transition'''
===From which place(s) are the offerings able to be purchased?===


One issue facing the US is the lack of sales staff with specialised knowledge of the GIS industry. A salesperson must have the right technical acumen in GIS to act as a trusted partner to customers in finding solutions. The US sales infrastructure is now in place to support growth, but sufficient, qualified sales staff must be found. SPA has added a managing account executive and management believes it is gradually overcoming this issue.
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.


In the US, SPA is also transitioning to more of a software sales corporation. The goal is to continue selling repeatable term licences in the US, with software as the majority of contract values and services as no more than 50%. To this end, it has implemented several key initiatives, such as ISO 9001, various quality management system and continuous improvement projects. Ensuring the quality of business processes is essential, especially when one is working with data and focusing on verifying, correcting and managing customer geolocation information.
===From which place(s) are the offerings promoted?===


As SPA wins more and more business with influential and reference clients, is seen as a provider of faster and more versatile solutions and expands its business with existing customers, we anticipate that the US business should continue to increase its portion of company sales. While the US-specific margins have not been disclosed, the ongoing growth in higher-margin repeatable term licences business should also contribute to SPA’s overall profitability. Overall, we forecast US revenues growing at about 23-28% over FY22e and FY23e and reaching £4.6m by FY23.
The main way that Tesla promotes the offerings is through media coverage and word of mouth.


'''Leader of a niche market'''
=== What's the current strategy of the company? ===


As discussed earlier, 1Spatial operates in a niche market. While there are many firms that provide software for using GIS data, gathering location data, or levering GIS information to generate insights, there are few direct competitors that specialise in auditing, cleaning, verifying and integrating location and geospatial data of such volumes and complexity as 1Spatial, which can ensure true data governance across the enterprise or, as with recent contract wins, nationally. Exhibit 9 provides a snapshot of comparable firms in that they are in the same sector (eg geospatial industry) or are mainstream data software management providers that do not specialise in the niche of location/spatial data like 1Spatial.
According to a blog post in 2016 in which the CEO of Tesla detailed the company's master plan<ref>https://www.tesla.com/blog/master-plan-part-deux</ref>, the current strategy of Tesla consists of four milestones:


Another group of competitors is consultants who are leading a large project and try to do the LMDM work themselves. While it was more common in the past, the trend of carrying out LMDM work internally has changed over the past few years, as now SPA is being brought in as a subject-matter expert on many projects. With the quantity and complexity of location data expanding, some consulting firms are choosing to use GIS specialists like SPA as part of the deal team. In fact, some customers are mandating that the ‘best-in-breed’ strategy be used for tasks like cleaning and validating location data, which we believe is again driving business to SPA.
#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.
It's worth noting that 10 years earlier than the publication of the 2016 blog post, Elon detailed the company's first master plan<ref name=":9" />, and the company has managed to achieve all of the milestones, which were as follows:


We must also consider how some companies would manage their own location data without using a firm like SPA. For instance, some government entities still use Excel and landlines to manage GIS data, which results in higher rates of errors, a much slower process, and key person risks surrounding the manual, complex spreadsheets and models. To clean such data requires substantial effort, errors may still remain and the process depends largely on the programmers who developed the model. In contrast, SPA’s platforms can run high volumes of data through its rules engine and in under a minute can provide an output report. Furthermore, unlike manual processes with complex coding, SPA provides an audit trail for use with government agencies and is designed for ease of use.
#Build a sports car (i.e. the Tesla Model S);
#Use that money to build an affordable car (i.e. the Tesla Model 3);
#Use that money to build an even more affordable car (i.e. a cheaper version of the Tesla Model 3); and
#Provide zero emission electric power generation options (i.e. Tesla Solar Roof and Powerwall and Megapack).


== ESG: Focus on sustainability ==
== Market==


1Spatial’s strategy includes supporting sustainability and ESG initiatives. As mentioned throughout the report, many of its contracts assist clients in achieving green agenda goals associated with UN sustainable development objectives and the UK’s Net Zero Strategy and ‘Build Back Better’ and ‘Build Back Greener’ projects. Increasing carbon capture and storage of carbon is another initiative, where it supports the Woodland Trust, the UK’s largest woodland conservation charity. 1Spatial’s company website is certified by ClimatePartner as being climate neutral, whereby emissions caused by the use of the website are offset by a hydropower project in Virunga, DR Congo. Finally, the company supports the Missing Map project with the Guinea Red Cross, where it runs events for volunteers to map the Mamou Region in Guinea, with the goal of improving the lives of some of the planet’s most vulnerable people.
===Total Addressable Market ===


== Financials: Increasing revenues and margins ==
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.


In FY20, SPA delivered £23.4m in revenue, growing by 33% y-o-y. However, growth was flat on an organic basis after considering the GI acquisition. Overall, gross and EBITDA margins improved and SPA achieved profitability at the EBIT and EBITDA levels.
It can be strongly argued that given the company's mission, the total addressable market is actually the global energy market; and research suggests that the estimated size of that market is $6.1 trillion.<ref name=":16" />


Despite the COVID-19 outbreak, SPA generated 5% revenue growth to £24.6m in FY21. After an H121 fall in organic revenue (8% y-o-y), H221 marked a return to growth with total sales up 3%, led by the US, up 45% (12% of FY21 revenue) and Europe rising by 5% (45% of FY21 revenue). ARR also grew 10% to £11.2m. Lastly, in H221 gross and EBITDA margins reached record levels of 55% and 15%, respectively with free cash flow turning positive.
===Serviceable Available Market===


H122’s results were encouraging, with headline revenue up 8% y-o-y and growth in all regions, driven by the US up 34% to £1.6m. Adjusted EBITDA rose 10% to £1.8m with relatively steady margins, although free cash flow (FCF) (including leases) turned negative to a £1.4m outflow, primarily due to investments in sales and delivery capacity.
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.


Overall, SPA’s prospects going into FY22e and FY23e appear promising. As can be seen in Exhibit 10, the trend of significant contract wins has accelerated this year, with c £15.3m in contract wins in H222, the largest since 2019. The pipelines should continue to grow in both the US and UK, and we assume a 6% revenue CAGR during our forecast period (through FY23e).
===Serviceable Obtainable Market===


Our forecast assumes that SPA grows revenues by 5.1% to £25.8m in FY22e and then 6.3% in FY23e to £27.5m, with growth led by the United States and UK/Ireland where revenue rises by 28% and 6% in FY23e, respectively. We forecast that SPA’s revenue growth will come primarily from two geographic segments (see Exhibit 11):
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.


* UK/Ireland (34% of FY21 sales). Revenues grow 3% in FY22e, accelerating to 6% in FY23e, driven by growth in governmental and transportation revenues as part of the Net Zero Strategy and the UK’s ‘Build Back Better’ and ‘Build Back Greener’ initiatives.
== Competition==


* US (12% of FY21 sales). Revenues rise 23% in FY22e and 28% in FY23e as the Land and Expand strategy continues to bear fruit, with growth in government business, including NextGen 911, transportation initiatives with various DOT and federal highway contracts and the recent $1tn infrastructure bill.
===Automotive===


* Europe (45% of FY21 sales). Revenues increase 1% in both FY22e and FY23e, supported by renewed growth in French operations, as demonstrated by contracts with Strasbourg, the Nantes Water Department and a large French water utility company, as well as increased business from Esri-based business applications.
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.  


* Australia (9% of FY21 sales). Revenues stay relatively flat across FY22e and FY23e, coming in at about £2 per year.
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.


Customer concentration also appears not to be an issue for SPA, as no one customer makes up more than 5% of total revenues. Furthermore, no single geography has all of the largest clients, and they are spread across the US, UK and EU.
===Energy generation and storage===


The transition to a SaaS model should continue to drive the increase in recurring revenue, which we anticipate growing at a 7% CAGR in FY22e–23e. Related services revenues will also benefit from contract growth, albeit at a slightly lower CAGR of 5% (FY22e–23e). We also forecast the shift away from perpetual licences towards a SaaS model will result in a slower growth in perpetual licences of 2% CAGR across FY22e–23e.
====Energy Storage Systems====


As recurring, high-margin revenue continues to make up more of contract wins, both gross and EBITDA margins should benefit, as well as free cash flow. The US tends to see the highest gross margins, as most solutions have a high element of licensing revenues and are relatively standard ‘cookie cutter’ solutions that can be applied in many situations (eg 911 contracts). The UK/Ireland should also see margins improve, as contracts have higher elements of recurring revenues. The EU region has below average margins, as it mostly sells third-party software at lower margins, and the EU market is more competitive than the US or UK/Ireland.
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.  


Altogether, our forecast implies gross margins improving 50bp in FY22e to 54% and 100bp in FY23e to 55%. As Exhibit 12 indicates, we see adjusted EBITDA margins growing to 14.9% in FY22e, delivering adjusted EBITDA of £3.8m, and further improvement in FY23e, with margins rising to 15.7% with £4.3m of adjusted EBITDA. Adjusted earnings remain positive, while IFRS earnings continue marching towards profitability, moving from a loss of £0.98/share in FY21 to losses of £0.73/share and £0.38/share over FY22e and FY23e, respectively. The difference between adjusted and IFRS results is primarily due to amortising acquired intangibles and share-based payments.
====Solar Energy Systems====


'''Cash flows and balance sheet'''
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.


We have adjusted our working capital and the resulting cash balance estimates as much of SPA’s deal flow was weighted to the back end of FY22, especially some of the larger projects. As a result, not all of the cash has yet been received for those deals by the end of FY22 so we have adjusted our working capital, which affected operating cash flows, etc.
==Team ==


SPA’s operating cash flows (before cash interest and taxes) of £4.0m in FY21 fall to £1.0m in FY22e as a result of the cash timing discussed above, but recover to £4.3m in FY23e as cash from the larger deals is received at the end of FY22. We forecast investing cash outflows will decrease slightly in FY22 to £2.4m, due to the £0.6m of deferred consideration (on the acquisition of GI) from FY21 not repeating, before increasing slightly to £2.5m in FY23e.
===Leadership===


We estimate that the net cash position falls from £2.8m H122 to £1.8m in FY22 and then back to £2.3m in FY23. Having turned positive to £0.9m in FY21, free cash flows (FCF, including lease payments) are forecast to fall, leading to a £2.6m outflow in H222 due to the aforementioned cash timing from new contracts. FCF is then projected to return to positive levels at £0.6m in FY23.
====Chief Executive Officer====


In addition to working capital, much of the asset growth comes from intangibles increasing due to capitalised development costs of £2.2–2.3m per year over FY22e and FY23e. We also forecast that SPA’s gearing remains minor, with a small amount of debt (£3.0m) in FY22 and FY23, primarily in bank borrowings and most of which is due in two to five years.
[[File:Elon Musk Royal Society (crop2).jpg|200px]]


== Valuation: Gradually closing discount to peer group ==
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.


At the recent 45.5p price, SPA trades at 1.9x FY22e revenue, a 66% discount to its software peers (see Exhibit 13). Much of SPA’s discount could reflect its relatively lower projected growth (5% in FY22e versus peers at 13%, see Exhibit 9). Furthermore, its margins are below its peers (15% EBITDA FY22e versus 23% for peers, see Exhibit 9). As displayed in Exhibit 14, SPA trades at 12.4x FY22e EV/EBITDA, a 56% discount to peers such as IQGeo and Hexagon.
====Chief Financial Officer====


Closing the revenue multiple could take time, although our forecast for growth in FY23e (6% versus 11.9% consensus for peers) may bode well for SPA’s efforts to begin reducing the disparity in growth. Furthermore, achieving our expected margin improvements in FY23e should provide confidence that margins can move closer to its peers.
[[File:Zachary Kirkhorn.jpg|200px]]


Achieving a sector average price/revenue multiple of 5.7x would imply a share price of 133p, a 193% premium to the current price. Reaching a peer EV/EBITDA multiple of 27.7x suggests a share price of 99p, a 117% premium to the current price. If US sales can ramp up faster than we project due to the recent infrastructure bill and the UK’s Net Zero Strategy and NUAR programmes generate more business, then a further re-rating is possible.
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.


== Sensitivities ==
====Senior Vice President====


Timing and size of long-term opportunities. In this outlook note, we have evaluated several themes in the GIS space and explored initiatives driving SPA’s growth. Generating sales based on these themes and successfully executing on initiatives such as Land and Expand have the potential to boost the company’s finances, in our opinion. However, as many of these are still in the early stages and will have a long-term impact, it is challenging to determine the timing and size of these opportunities. Therefore, our forecasts reflect modest growth rates compared to historical performance; realised growth could be faster or slower depending on actual timing and quantities of the various items.
[[File:Drew.jpg|200px]]


Short-term deal-flow visibility. Although deal flow and signed contracts have drastically accelerated in the most recent quarter, predicting whether this increased pace will continue or merely revert to the longer-term trend is challenging. Moreover, estimating the timing and quantity of contracts with large upfront revenues and optional extensions on the back end is difficult. Note also that the UK contracts seem to receive more attention due to their size, as many of the US contracts fall below a reportable level, so even if the actual quantities of US deals become greater than in the UK, it may not be as apparent when one merely looks at the largest contract wins, making it challenging to forecast US versus UK sales based on reported contract announcements. Overall, a shortfall or boost in sales of only £1m in either FY22e or FY23e, all other things being equal, would affect EBITDA by £0.15–0.16m.
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===
 
'''Elon Musk'''
 
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).
 
<noglossary>‎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.</noglossary> 
 
'''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==
 
'''Tesla revenues over the lifetime of the company'''
 
[[File:Tesla revenues over the lifetime of the company.png]]
=== Historic ===
 
==== Most recent quarter ====
During the three months ended 31st March 2022, net income increased to $3.32 billion on revenues of $18.76 billion, representing a respective increase of 7x and 81% compared to the prior year, and equating to a net income margin of 18%. The company ended the quarter with cash of $18.01 billion, representing an increase of 2% from the end of 2021.
 
==== Most recent year ====
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" />
 
==== All periods ====
{| class="wikitable"
|+Historic financials<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'''
|-
|'''Year end date'''||'''31/12/2005'''||'''31/12/2006<ref name=":12">{{cite web|url=https://www.mercurynews.com/2014/07/14/2006-san-carlos-start-up-tesla-seeks-sexier-electric-car/|title=2006: San Carlos start-up Tesla seeks sexier electric car|date=July 14, 2014}}</ref><ref name="SEC">{{cite web | url=https://www.sec.gov/edgar/browse/?CIK=1318605 | title=Tesla, Inc. TSLA on Nasdaq | publisher=[[U.S. Securities and Exchange Commission]]}}</ref>'''||'''31/12/2007'''||'''31/12/2008'''||'''31/12/2009'''
|'''31/12/2010<ref name="SEC" />'''
|'''31/12/2011<ref name="SEC" />'''
|'''31/12/2012<ref name="SEC" />'''
|'''31/12/2013<ref name="SEC" />'''
|'''31/12/2014<ref name="SEC" />'''
|'''31/12/2015<ref name="SEC" />'''
|'''31/12/2016<ref name="SEC" />'''
|'''31/12/2017<ref name="SEC" />'''
|'''31/12/2018<ref name="SEC" />'''
|'''31/12/2019<ref name="SEC" />'''
|'''31/12/2020<ref name="SEC" />'''
|'''31/12/2021<ref name="SEC" />'''
|-
| colspan="18" |<div style="text-align: center;">'''Income statement'''</div>
|-
|Revenues ($'million)|| 0||0||0.073||15||112
|117
|204
|413
|2,013
|3,198
|4,046
|7,000
|11,759
|21,461
|24,578
|31,536
|53,823
|-
|Net profits ($'million)||style="color: red;" |-12||style="color: red;" |-30||style="color: red;" |-78||style="color: red;" |-83|| style="color: red;" |−56
|style="color: red;" |−154
|style="color: red;" |−254
|style="color: red;" |−396
|style="color: red;" |−74
|style="color: red;" |−294
|style="color: red;" |−889
|style="color: red;" |−675
|style="color: red;" |−1,962
|style="color: red;" |−976
|style="color: red;" |−862
|721
|5,519
|-
| colspan="18" |<div style="text-align: center;">'''Balance sheet'''</div>
|-
|Total assets<br />($'million)
|8
|44
|34
|52
|130
|386
|713
|1,114
|2,417
|5,831
|8,068
|22,664
|28,655
|29,740
|34,309
|52,148
|62,131
|-
| colspan="18" |<div style="text-align: center;">'''Other'''</div>
|-
|Employees
|NA
|70
|268
|252
|514
|899
|1,417
|2,914
|5,859
|10,161
|13,058
|17,782
|37,543
|48,817
|48,016
|70,757
|99,290
|}
 
=== Forward ===
 
====What are the financial forecasts?====
{| class="wikitable"
|+Forward financials<ref>Source: Stockhub Limited</ref><ref group="Note" name="Note04" />
|-
!Year
!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
!43
!44
!45
!46
!47
!48
!49
!50
!51
!52
!53
!54
!55
!56
!57
!58
!59
|-
|'''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'''
|-
| colspan="43" |<div style="text-align: center;">'''Income statement'''</div>
|-
|Revenues ($'million)|| $78,935||$112,257||$154,816||$207,049||$268,527
|$337,721
|$411,894
|$487,157
|$558,739
|$621,448
|$670,282
|$701,078
|$711,102
|$699,445
|$667,163
|$617,116
|$553,551
|$481,510
|$406,171
|$332,253
|$263,564
|$202,749
|$151,247
|$109,414
|$76,757
|$52,217
|$34,448
|$22,038
|$13,673
|$8,226
|$4,799
|$2,715
|$1,490
|$793
|$409
|$205
|$99
|$47
|$21
|$9
|$4
|$2
|-
|Gross profits ($'million)||$23,680||$33,677||$46,445||$62,115||$80,558
|$101,316
|$185,352
|$219,221
|$251,432
|$279,652
|$301,627
|$315,485
|$319,996
|$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
|$1,137
|$643
|$353
|$188
|$97
|$48
|$24
|$11
|$5
|$2
|$1
|$0
|}
 
==== What are the assumptions used to estimate the financial forecasts?====
 
{| class="wikitable"
|+Key inputs
!Description
!Value
!Commentary
|-
| colspan="3" | <div style="text-align: center;">'''Revenue'''</div>
|-
|What's the estimated current size of the total addressable market?
|$2,975,000,000
|Here, the total addressable market (TAM) is defined as the global automotive market, and based on a number of assumptions<ref group="Note" name="Note01" />, it is estimated that the size of the market as of today (30th May 2022), in terms of revenue, is $2.975 trillion.
 
 
If the TAM is defined as the global energy market, then research suggests that the estimated size of the market is $6.777 trillion.<ref name=":16">https://www.ucl.ac.uk/bartlett/sustainable/sites/bartlett/files/an_exploration_of_energy_cost_ranges_limits_and_adjustment_process.pdf</ref>
|-
|What is the estimated company lifespan?
|60 years
|Tesla employs around 110,000, making the company a large organisation (more than 10,000 employees), and research shows that the average lifespan of a large corporation is around 50 years.<ref>Stadler, Enduring Success, 3–5.</ref>
|-
|What's the estimated annual growth rate of the total addressable market over the lifecycle of the company?
|3%
|Research shows that the growth rate of the global automotive market (i.e. the total addressable market) is similar to the growth rate of global gross domestic product<ref>http://www.robertpicard.net/files/econgrowthandadvertising.pdf</ref>, which has averaged (medium) around 3% per year in the last 20 years (2001 to 2022)<ref>https://www.macrotrends.net/countries/WLD/world/gdp-growth-rate</ref>.
|-
|What's the estimated company peak market share?
|10%
|Stockhub estimates that especially given the leadership of the company, the peak market share of Tesla is around 10%, and, therefore, suggests using the share amount here. As of 31st December 2021, Tesla's current share of the market is estimated at around 1.8%.
|-
|Which distribution function do you want to use to estimate company revenue?
|Gaussian
|Research suggests that the revenue pattern of companies is similar to the pattern produced by the Gaussian distribution function  (i.e. the revenue distribution is bell shaped)<ref>http://escml.umd.edu/Papers/ObsCPMT.pdf</ref>, so Stockhub suggests using that function here.
|-
|What's the estimated standard deviation of company revenue?
| 6 years
|Another way of asking this question is this way: within how many years either side of the mean does 68% of revenue occur? Based on Tesla's current revenue amount (i.e. $54 billion) and Tesla's estimated lifespan (i.e. 60 years) and Tesla's estimated current stage of its lifecycle (i.e. growth stage), the Stockhub 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>'''
|-
|How many main stages of growth is the company expected to go through?
| 4 stages
|Research suggests that a company typically goes through four distinct stages of cash flow growth.<ref>Levie J, Lichtenstein BB (2010) A terminal assessment of stages theory: Introducing a dynamic approach to entrepreneurship. Entrepreneurship: Theory & Practice 34(2): 317–350. <nowiki>https://doi.org/10.1111/j.1540-6520.2010.00377.x</nowiki></ref> Research also shows that incorporating those stages into the discounted cash flow model improves the quality of the model and, ultimately, the quality of the value estimation.<ref>Stef Hinfelaar et al.:, 2019.</ref>
 
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. Note, to account for one-off events, the three-year average (median) amount was used to calculate the cash flows.
 
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.
|-
|What proportion of the company lifecycle is represented by growth stage 1?
|30%
|Research suggests 30%.<ref name=":6">http://escml.umd.edu/Papers/ObsCPMT.pdf</ref>
|-
|What proportion of the company lifecycle is represented by growth stage 2?
|10%
|Research suggests 10%.<ref name=":6" />
|-
| What proportion of the company lifecycle is represented by growth stage 3?
|20%
| Research suggests 20%.<ref name=":6" />
|-
|What proportion of the company lifecycle is represented by growth stage 4?
|40%
|Research suggests 40%.<ref name=":6" />
|-
| colspan="3" |'''<div style="text-align: center;">Growth stage 2</div>'''
|-
|Cost of goods sold as a proportion of revenue (%)
|79%
|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7">http://people.stern.nyu.edu/adamodar/pdfiles/papers/younggrowth.pdf</ref>, and the margin for its peers is 79%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|-
|Operating expenses as a proportion of revenue (%)
|15%
|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />, and the margin for its peers is 15%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|-
|Tax rate (%)
|11%
|Research suggests that it's best to use a similar rate as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />, and the rate for its peers is 11%.
|-
|Depreciation and amortisation as a proportion of revenue (%)
|7%
|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />, and the margin for its peers is 7%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|-
|Fixed capital as a proportion of revenue (%)
|10%
|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />, and the amount for its peers is 10%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|-
|Working capital as a proportion of revenue (%)
|15%
|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />, and the amount for its peers is 15%.
|-
|Net borrowing ($000)
|Zero
|Stockhub suggests that for simplicity, the net borrowing figure is zero.
|-
|Interest amount ($000)
|Zero
|Stockhub suggests that for simplicity, the interest amount figure is zero.
|-
| colspan="3" |'''<div style="text-align: center;">Growth stage 3</div>'''
|-
|Cost of goods sold as a proportion of revenue (%)
|62%
|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />, and the margin for its peers is 62%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|-
|Operating expenses as a proportion of revenue (%)
|13%
|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />, and the margin for its peers is 13%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|-
|Tax rate (%)
|14%
|Research suggests that it's best to use a similar rate as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />, and the rate for its peers is 14%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|-
|Depreciation and amortisation as a proportion of revenue (%)
|4%
|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />, and the amount for its peers is 4%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|-
|Fixed capital as a proportion of revenue (%)
|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%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|-
|Working capital as a proportion of revenue (%)
|10%
|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the amount for its peers is 10%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|-
|Net borrowing ($000)
|Zero
|Stockhub suggests that for simplicity, the net borrowing figure is zero.
|-
|Interest amount ($000)
|Zero
|Stockhub suggests that for simplicity, the interest amount figure is zero.
|-
| colspan="3" |'''<div style="text-align: center;">Growth stage 4</div>'''
|-
|Cost of goods sold as a proportion of revenue (%)
|99%
|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the margin for its peers is 99%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|-
|Operating expenses as a proportion of revenue (%)
|15%
|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the margin for its peers is 15%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|-
|Tax rate (%)
|0%
|Research suggests that it's best to use a similar rate as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the rate for its peers is 0%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|-
|Depreciation and amortisation as a proportion of revenue (%)
|37%
|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the amount for its peers is 37%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|-
|Fixed capital as a proportion of revenue (%)
| 1%
|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the amount for its peers is 1%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|-
|Working capital as a proportion of revenue (%)
| 10%
|Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the amount for its peers is 10%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
|-
|Net borrowing ($000)
|Zero
|Stockhub suggests that for simplicity, the net borrowing figure is zero.
|-
|Interest amount ($000)
|Zero
|Stockhub suggests that for simplicity, the interest amount figure is zero.
|}
 
==Risks==
 
As with any investment, investing in Tesla carries a level of risk. Overall, based on the key risks highlighted below, the degree of risk associated with an investment in Tesla is high.
 
===Risks related to the ability to grow the business===
 
*Tesla may be impacted by macroeconomic conditions resulting from the global COVID-19 pandemic.
*Tesla may experience delays in launching and ramping the production of its products and features, or Tesla may be unable to control its manufacturing costs.
*Tesla may be unable to grow its global product sales, delivery and installation capabilities and its servicing and vehicle charging networks, or Tesla may be unable to accurately project and effectively manage its growth.
*Tesla's future growth and success is dependent upon consumers’ demand for electric vehicles and specifically its vehicles in an automotive industry that is generally competitive, cyclical and volatile.
*Tesla's suppliers may fail to deliver components according to schedules, prices, quality and volumes that are acceptable to us, or Tesla may be unable to manage these components effectively.
*Tesla may be unable to meet its projected construction timelines, costs and production ramps at new factories, or Tesla may experience difficulties in generating and maintaining demand for products manufactured there.
* Tesla will need to maintain and significantly grow its access to battery cells, including through the development and manufacture of its own cells, and control its related costs.
*Tesla faces strong competition for its products and services from a growing list of established and new competitors.
 
===Risks related to the company's operations===
 
*Tesla may experience issues with lithium-ion cells or other components manufactured at Gigafactory Nevada and Gigafactory Shanghai, which may harm the production and profitability of its vehicle and energy storage products.
*Tesla faces risks associated with maintaining and expanding its international operations, including unfavourable and uncertain regulatory, political, economic, tax and labour conditions.
*Tesla's business may suffer if its products or features contain defects, fail to perform as expected or take longer than expected to become fully functional.
*Tesla may be required to defend or insure against product liability claims.
*Tesla will need to maintain public credibility and confidence in its long-term business prospects in order to succeed.
*Tesla may be unable to effectively grow, or manage the compliance, residual value, financing and credit risks related to, its various financing programs.
*Tesla must manage ongoing obligations under its agreement with the Research Foundation for the State University of New York relating to its Gigafactory New York.
*If Tesla is unable to attract, hire and retain key employees and qualified personnel, its ability to compete may be harmed.
*Tesla is highly dependent on the services of Elon Musk, its Chief Executive Officer.
*Tesla's information technology systems or data, or those of its service providers or customers or users could be subject to cyber-attacks or other security incidents, which could result in data breaches, intellectual property theft, claims, litigation, regulatory investigations, significant liability, reputational damage and other adverse consequences.
*Any unauthorized control or manipulation of Tesla's products’ systems could result in loss of confidence in it and its products.
*Tesla's business may be adversely affected by any disruptions caused by union activities.
*Tesla may choose to or be compelled to undertake product recalls or take other similar actions.
*Tesla's current and future warranty reserves may be insufficient to cover future warranty claims.
*Tesla's insurance coverage strategy may not be adequate to protect it from all business risks.
*Tesla's debt agreements contain covenant restrictions that may limit its ability to operate its business.
*Additional funds may not be available to Tesla when it needs or want them.
*Tesla may be negatively impacted by any early obsolescence of its manufacturing equipment.
*Tesla holds and may acquire digital assets that may be subject to volatile market prices, impairment and unique risks of loss.
*There is no guarantee that Tesla will have sufficient cash flow from its business to pay its indebtedness or that it will not incur additional indebtedness.
*Tesla is exposed to fluctuations in currency exchange rates.
*Tesla may need to defend itself against intellectual property infringement claims, which may be time-consuming and expensive.
*Increased scrutiny and changing expectations from stakeholders with respect to the company's ESG practices may result in additional costs or risks.
* Tesla's operations could be adversely affected by events outside of its control, such as natural disasters, wars or health epidemics.
 
===Risks related to government laws and regulations=== 
 
* Demand for Tesla's products and services may be impacted by the status of government and economic incentives supporting the development and adoption of such products.
*Tesla is subject to evolving laws and regulations that could impose substantial costs, legal prohibitions or unfavourable changes upon its operations or products.
*Any failure by Tesla to comply with a variety of United States and international privacy and consumer protection laws may harm the company.
*Tesla could be subject to liability, penalties and other restrictive sanctions and adverse consequences arising out of certain governmental investigations and proceedings.
*Tesla may face regulatory challenges to or limitations on its ability to sell vehicles directly.
 
===Risks related to the ownership of the company's common stock=== 
 
*The trading price of Tesla's common stock is likely to continue to be volatile.
* Tesla's financial results may vary significantly from period to period due to fluctuations in its operating costs and other factors.
*Tesla may fail to meet its publicly announced guidance or other expectations about its business, which could cause its stock price to decline.
*Transactions relating to Tesla's convertible senior notes may dilute the ownership interest of existing stockholders, or may otherwise depress the price of its common stock.
*If Elon Musk were forced to sell shares of Tesla's common stock that he has pledged to secure certain personal loan obligations, such sales could cause its stock price to decline.
* Anti-takeover provisions contained in Tesla's governing documents, applicable laws and its convertible senior notes could impair a takeover attempt.
 
==Valuation==
 
===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 negative 24%. In other words, an £1,000 investment in the company is expected to return £760 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 negative 24%), then an investment in the company is considered to be an 'unsuitable' one.
 
===What are the assumptions used to estimate the return?===
 
{| class="wikitable"
|+ Key inputs
!Description
!Value
!Commentary
|-
| Which valuation model do you want to use?
|Discounted cash flow
| There are two main approaches to estimate the value of an investment:
# By calculating the present value of the investment's expected future cash flows (i.e. discounted cash flow valuation); and
#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 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, Stockhub suggests using the free cash flow valuation method (rather than the dividend discount model).
|-
|Which financial forecasts to use?
| 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>'''
|-
|Discount rate (%)
| 15%
|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 is 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 (%)
| 90%
| Research suggests that a suitable rate for a company in this growth stage (i.e. stage 2) is 90%.
 
|-
| colspan="3" |'''<div style="text-align: center;">Growth stage 3</div>'''
|-
|Discount rate (%)
| 10%
|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 is 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 (%)
|100%
|Research suggests that a suitable rate for a company in this growth stage (i.e. stage 3) is 100%.
 
|-
| colspan="3" |'''<div style="text-align: center;">Growth stage 4</div>'''
|-
|Discount rate (%)
| 10%
|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 is 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 (%)
| 100%
|Research suggests that a suitable rate for a company in this growth stage (i.e. stage 4) is 100%.
 
|-
| colspan="3" |'''<div style="text-align: center;">Other key inputs</div>'''
|-
|What's the current value of the company?
|$950.54 billion
|As at 5th June 2022, the current value of the Tesla company is $950.54 billion.
|-
|Which time period do you want to use to estimate the expected return?
| Between now and five years time
|Research suggests that following a market crash, the average amount of time it takes for the price of a stock market to return to its pre-crash level (i.e. the recovery period) is at least three years.<ref>https://www.newyorkfed.org/mediabrary/media/medialibrary/media/research/staff_reports/research_papers/9809.pdf</ref> Accordingly, 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.
|}
 
===Sensitive analysis===
 
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 size is $3.0 trillion);
#Tesla peak market share (the default share is 10%); and
#The discount rate (the default time-weighted average rate is 10%).
 
The impact of a 50% change in those main inputs to the expected return of the Tesla investment is shown in the table below.
 
{| class="wikitable sortable"
|+Tesla investment expected return sensitive analysis
!Main input
!50% worse
!Unchanged
!50% better
|-
|The size of the total addressable market
|N/A
|(24%)
|N/A
|-
|Tesla peak market share
|N/A
| (24%)
| N/A
|-
|The discount rate
 
|N/A
|(24%)
| N/A
 
|}
 
==Appendix==
 
=== Competition ===
==== Automotive ====
{| class="wikitable"
|+Model S competition comparison
!Category
!Model S<ref name=":8">https://www.porsche.com/usa/models/taycan/taycan-models/taycan/</ref>
!Porsche Taycan<ref name=":8" />
|-
|Is the vehicle fully electric?
| style="background: orange; color: white;" |Yes
| style="background: orange; color: white;" |Yes
|-
|What's the top acceleration of the vehicle?
| style="background: green; color: white;" |3.1 seconds
| style="background: red; color: white;" |5.1 seconds
|-
|What's the maximum distance range of the vehicle on a single battery charge?
| style="background: green; color: white;" |405 miles
| style="background: red; color: white;" |200 miles
|-
|What's the top speed of the vehicle?
| style="background: green; color: white;" |155 miles per hour
| style="background: red; color: white;" |143 miles per hour
|-
|Which design type is the vehicle?
| style="background: orange; color: white;" |Sedan (i.e. car)
| style="background: orange; color: white;" |Sedan (i.e. car)
|-
|What is the safety rating of the vehicle?
| style="background: orange; color: white;" |5 out of 5 stars
| style="background: orange; color: white;" |5 out of 5 stars
|-
|How many seats does the vehicle have?
| style="background: green; color: white;" |5 seats
| style="background: red; color: white;" |4 seats
|-
|What's the cargo capacity of the vehicle?
| style="background: green; color: white;" |28 cubic feet
| style="background: red; color: white;" |17.2 cubic feet
|-
|Which drive wheel does the vehicle have?
| style="background: green; color: white;" |All-wheel drive
| style="background: red; color: white;" |Rear-wheel drive
|-
|What's the price of the vehicle?
| style="background: red; color: white;" |$99,990
| style="background: green; color: white;" |$86,700
|-
|What's the vehicle's price per cargo capacity?
| style="background: green; color: white;" |$3,571 per cubic feet
| style="background: red; color: white;" |$5,041 per cubic feet
|-
|What's the vehicle's price per seat?
| style="background: green; color: white;" |$19,998 per seat
| style="background: red; color: white;" |$21,675 per seat
|}
 
{| class="wikitable"
|+Model 3 competition comparison
!Category
!Model 3<ref>https://www.tesla.com/model3</ref>
!Mustang Mach-E<ref>https://www.ford.com/suvs/mach-e/?gnav=header-electrified-vhp</ref>
|-
|Is the vehicle fully electric?
| style="background: orange; color: white;" |Yes
| style="background: orange; color: white;" |Yes
|-
|What's the top acceleration of the vehicle?
| style="background: red; color: white;" |5.8 seconds
| style="background: green; color: white;" |5.2 seconds
|-
|What's the maximum distance range of the vehicle on a single battery charge?
| style="background: green; color: white;" |272 miles
| style="background: red; color: white;" |247 miles
|-
|What's the top speed of the vehicle?
| style="background: green; color: white;" |140 miles per hour
| style="background: red; color: white;" |124 miles per hour
|-
|Which design type is the vehicle?
| style="background: orange; color: white;" |Sedan (i.e. car)
| style="background: orange; color: white;" |SUV (i.e. car)
|-
|What is the safety rating of the vehicle?
| style="background: orange; color: white;" |5 out of 5 stars
| style="background: orange; color: white;" |5 out of 5 stars
|-
|How many seats does the vehicle have?
| style="background: orange; color: white;" |5 seats
| style="background: orange; color: white;" |5 seats
|-
|What's the cargo capacity of the vehicle?
| style="background: red; color: white;" |23 cubic feet
| style="background: green; color: white;" |59.7 cubic feet
|-
|Which drive wheel does the vehicle have?
| style="background: orange; color: white;" |Rear-wheel drive
| style="background: orange; color: white;" |Rear-wheel drive
|-
|What's the price of the vehicle?
| style="background: red; color: white;" |$46,990
| style="background: green; color: white;" |$43,895
|-
|What's the vehicle's price per cargo capacity?
| style="background: red; color: white;" |$2,043 per cubic feet
| style="background: green; color: white;" |$735 per cubic feet
|-
|What's the vehicle's price per seat?
| style="background: red; color: white;" |$9,398 per seat
| style="background: green; color: white;" |$8,779 per seat
|}
 
{| class="wikitable"
|+Model X competition comparison
!Category
!Model X<ref name=":13" />
!Audi e-tron<ref>https://www.audiusa.com/us/web/en/models/e-tron/e-tron/2022/overview.html#2022-Audi-e-tron%C2%AE</ref>
|-
|Is the vehicle fully electric?
| style="background: orange; color: white;" |Yes
| style="background: orange; color: white;" |Yes
|-
|What's the top acceleration of the vehicle?
| style="background: green; color: white;" |3.8 seconds
| style="background: red; color: white;" |5.5 seconds
|-
|What's the maximum distance range of the vehicle on a single battery charge?
| style="background: green; color: white;" |348 miles
| style="background: red; color: white;" |222 miles
|-
|What's the top speed of the vehicle?
| style="background: green; color: white;" |155 miles per hour
| style="background: red; color: white;" |124 miles per hour
|-
|Which design type is the vehicle?
| style="background: orange; color: white;" |SUV (i.e. car)
| style="background: orange; color: white;" |SUV (i.e. car)
|-
|What is the safety rating of the vehicle?
| style="background: orange; color: white;" |5 out of 5 stars
| style="background: orange; color: white;" |5 out of 5 stars
|-
|How many seats does the vehicle have?
| style="background: green; color: white;" |7 seats
| style="background: red; color: white;" |5 seats
|-
|What's the cargo capacity of the vehicle?
| style="background: green; color: white;" |88 cubic feet
| style="background: red; color: white;" |56 cubic feet
|-
|Which drive wheel does the vehicle have?
| style="background: orange; color: white;" |All-wheel drive
| style="background: orange; color: white;" |All-wheel drive
|-
|What's the price of the vehicle?
| style="background: red; color: white;" |$114,990
| style="background: green; color: white;" |$65,900
|-
|What's the vehicle's price per cargo capacity?
| style="background: red; color: white;" |$1,307 per cubic feet
| style="background: green; color: white;" |$1,168 per cubic feet
|-
|What's the vehicle's price per seat?
| style="background: red; color: white;" |$16,427 per seat
| style="background: green; color: white;" |$13,180 per seat
|}
 
{| class="wikitable"
|+Model Y competition comparison
!Category
!Model Y<ref name=":13" />
!Volkswagen ID.4
|-
|Is the vehicle fully electric?
| style="background: orange; color: white;" |Yes
| style="background: orange; color: white;" |Yes
|-
|What's the top acceleration of the vehicle?
| style="background: green; color: white;" |4.8 seconds
| style="background: red; color: white;" |8.5 seconds
|-
|What's the maximum distance range of the vehicle on a single battery charge?
| style="background: green; color: white;" |330 miles
| style="background: red; color: white;" |275 miles
|-
|What's the top speed of the vehicle?
| style="background: green; color: white;" |135 miles per hour
| style="background: red; color: white;" |100 miles per hour
|-
|Which design type is the vehicle?
| style="background: orange; color: white;" |SUV (i.e. car)
| style="background: orange; color: white;" |SUV (i.e. car)
|-
|What is the safety rating of the vehicle?
| style="background: orange; color: white;" |5 out of 5 stars
| style="background: orange; color: white;" |5 out of 5 stars
|-
|How many seats does the vehicle have?
| style="background: green; color: white;" |7 seats
| style="background: red; color: white;" |5 seats
|-
|What's the cargo capacity of the vehicle?
| style="background: green; color: white;" |76 cubic feet
| style="background: red; color: white;" |55.6 cubic feet
|-
|Which drive wheel does the vehicle have?
| style="background: green; color: white;" |All-wheel drive
| style="background: red; color: white;" |Rear-wheel drive
|-
|What's the price of the vehicle?
| style="background: red; color: white;" |$62,990
| style="background: green; color: white;" |$41,230
|-
|What's the vehicle's price per cargo capacity?
| style="background: red; color: white;" |$829 per cubic feet
| style="background: green; color: white;" |$742 per cubic feat
|-
|What's the vehicle's price per seat?
| style="background: red; color: white;" |$8,999 per seat
| style="background: green; color: white;" |$8,248 per seat
|}
 
==== Energy generation and storage ====
 
{| class="wikitable"
|+All Tesla energy storage competition comparison
|-
! !!Powerwall!!'''Megapack'''
|-
|Is the source of energy solar?||style="background: orange; color: white;" |Yes||style="background: orange; 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
|-
|What's the energy capacity of the product?
|style="background: red; color: white;" |13.5 kilowatt hour
|style="background: green; color: white;" |3.5 megawatt hour
|-
|What’s the power of the product?
|style="background: red; color: white;" |5 kilowatts
|style="background: green; color: white;" |1.54 megawatts
|-
|How long does it take to charge the battery if there’s sufficient solar energy?
|style="background: red; color: white;" |2.7 hours
|style="background: green; color: white;" |2.3 hours
|-
|What's the price of the product?
|style="background: green; color: white;" |$10,500
|style="background: red; color: white;" |$1,000,000
|-
|What's the price per energy capacity?
|style="background: red; color: white;" |$593 per kilowatt hour
|style="background: green; color: white;" |$286 per kilowatt hour
|}
Note: 1 megawatt is equivalent to 1,000 kilowatts.
{| class="wikitable"
|+Powerwall competition comparison
!What's the name of the product?
!Powerwall
!LG Chem
!SonnenCore
|-
|Is the source of energy solar?
|style="background: orange; color: white;" |Yes
|style="background: orange; color: white;" |Yes
|style="background: orange; color: white;" |Yes
|-
|What's the energy capacity of the product?
|style="background: green; color: white;" |13.5 kilowatt hour
|style="background: red; color: white;" |9.3 kilowatt hour
|style="background: orange; color: white;" |10 kilowatt hour
|-
|What's the price of the product?
|style="background: red; color: white;" |$10,500
|style="background: green; color: white;" |$7,000
|style="background: orange; color: white;" |$9,500
|-
|What's the price per energy capacity?
|style="background: green; color: white;" |$593 per kilowatt hour
|style="background: orange; color: white;" |$753 per kilowatt hour
|style="background: red; color: white;" |$950 per kilowatt hour
|}
 
{| class="wikitable"
|+Solar Roof 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
|}
 
=== Financial statements ===
{| 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)
|$331
| 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
|$10,249
|-
|Other Equity ($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"
|+Cash flow
!Year end date
!31/12/2021
!31/12/2020
!31/12/2019
!31/12/2018
|-
|Net Income ($million)
|$5,519
|$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="color: red;" |-$130
| style="color: red;" |-$652
| style="color: red;" |-$367
| style="color: red;" |-$497
|-
|Changes in Inventories ($million)
| style="color: red;" |-$1,709
| style="color: red;" |-$422
| style="color: red;" |-$429
| style="color: red;" |-$1,023
|-
|Other Operating Activities ($million)
| style="color: red;" |-$3,676
| 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="color: red;" |-$1,222
|$100
| style="color: red;" |-$4
| style="color: red;" |-$18
|-
|Net Cash Flows-Investing ($million)
| style="color: red;" |-$7,868
| 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="color: red;" |-$5,732
| style="color: red;" |-$2,488
|$798
|$89
|-
|Other Financing Activities ($million)
| --
| --
| --
| --
|-
|Net Cash Flows-Financing ($million)
| style="color: red;" |-$5,203
|$9,973
|$1,529
|$574
|-
|Effect of Exchange Rate ($million)
| style="color: red;" |-$183
|$334
|$8
| style="color: red;" |-$23
|-
|Net Cash Flow ($million)
| style="color: red;" |-$1,757
|$13,118
|$2,506
|$312
|}
 
{{Tesla income statement}}
 
{| 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===
As noted earlier in this report, 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, so that's the approach that Stockhub suggests using to determine the estimated value of the company (the valuation based on the discounted cash flow approach can be found in the valuation section of this report); nevertheless, for completeness purposes, separately, the valuation of the company is also estimated using the relative valuation approach.
 
====What's the expected return of an investment in Tesla using the relative valuation approach?====
 
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, Inc.|Apple, Inc]]. [[Apple, Inc.|Apple, Inc]] 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, Inc.|Apple, Inc]]||Internet content & communication||7.27x<ref name=":0">Morningstar, Inc.</ref>||8.20%<ref name=":0" />|| style="background: blue; color: white;" |89x
|}
{| class="wikitable"
|+Tesla peers
!Peer
!Three-year average COGS margin (%)
!Three-year average SG&A margin (%)
!Three-year average tax margin (%)
!Three-year average depreciation rate (%)
!Three-year average fixed capital margin (%)
!Three-year average change in working capital ($000)
!Three-year average growth stage
!Discount rate
|-
|Rivian Automotive, Inc.
|945%
|6827%
|0%
|358%
|3262%
|7,569,000
|1
|NA
|-
|Tesla, Inc.
|79%
|15%
|11%
|7%
|10%
|3,121,828
|2
|14.96%
|-
|Apple, Inc
|62%
|13%
|14%
|4%
|3%
| -18,780,000
|3
|9.91%
|-
|Workhorse Group
|938%
| -6077%
|0%
|58%
|411%
| -2,978
|4
|18.75%
|-
|Cenntro Electric Group Limited
|90%
|209%
|0%
|37%
|0%
|138,382
|4
|10.44%
|-
|Liaoning SG Automotive Group Co
|99%
|15%
|18%
|8%
|1%
|154,153
|4
|6.39%
|}
{| class="wikitable"
|+Growth stage
!Growth stage
!Three-year average COGS margin (%)
!Three-year average SG&A margin (%)
!Three-year average tax margin (%)
!Three-year average depreciation rate (%)
!Three-year average fixed capital margin (%)
!Three-year average change in working capital ($000)
!Discount rate
|-
|One
|945%
|6827%
|0%
|358%
|3262%
|7,569,000
|NA
|-
|Two
|79%
|15%
|11%
|7%
|10%
|3,121,828
|14.96%
|-
|Three
|62%
|13%
|14%
|4%
|3%
| -18,780,000
|9.91%
|-
|Four
|99%
|15%
|0%
|37%
|1%
|138,382
|10.44%
|}
 
==== Apple Inc. ====
{| class="wikitable"
|+Cost of equity (%)
!Input
!Input value
!Additional information
|-
|Risk-free rate (%)
|3.44%
|Here, the risk free rate is the US 30 year treasury bond, and is calculated as at 15th September 2022.
|-
|Beta
|1.23
|The asset’s beta measures its market or systematic risk, which in theory is the sensitivity of its returns to the returns on the “market portfolio” of risky assets. Concretely, beta equals the covariance of returns with the returns on the market portfolio divided by the market portfolio’s variance of returns. In typical practice for equity valuation, the market portfolio is represented by a broad value-weighted equity market index. The asset’s beta is estimated by a least squares regression of the asset’s returns on the index’s returns.
 
In the typical case in which the equity risk premium is based on a national equity market index and estimated beta is based on sensitivity to that index, the assumption is being made implicitly that equity prices are largely determined by local investors. When equities markets are segmented in that sense (i.e., local market prices are largely determined by local investors rather than by investors worldwide), two issues with the same risk characteristics can have different required returns if they trade in different markets.
 
The opposite assumption is that all investors worldwide participate equally in set- ting prices (perfectly integrated markets). That assumption results in the international CAPM (or world CAPM) in which the risk premium is relative to a world market portfolio. In practice, the international CAPM is not commonly relied on for required return on equity estimation.
 
For estimating the required return on the equity using the Capital Asset Pricing Model, in terms of time period, and frequency of observations, the most common choice is five years of monthly data, yielding 60 observations. One study of U.S. stocks found support for five years of monthly data over alternatives. An argument can be made that the 2 years, weekly data can be especially appropriate in fast growing markets.
 
The beta value in a future period has been found to be on average closer to the mean value of 1.0, the beta of an average-systematic-risk security, than to the value of the raw beta. Because valuation is forward looking, it is logical to adjust the raw beta so it more accurately predicts a future beta.
 
The figure here is taken from Yahoo Finance (https://uk.finance.yahoo.com/quote/AAPL?p=AAPL&.tsrc=fin-srch), on 16th September 2022.
|-
|Equity risk premium (%)
|{{#lst:Template:Regional weighted average equity risk premium|Global weighted average equity risk premium}}
|The equity risk premium is the incremental return (premium) that investors require for holding equities rather than a risk-free asset (e.g., government bills or government bonds). Thus, it is the difference between the required return on equities and a specified expected risk-free rate of return. The equity risk premium, like the required return, depends strictly on expectations for the future because the investor’s returns depend only on the investment’s future cash flows.
Note: the definition of risk-free asset used in estimating the equity risk premium should correspond to the one used in specifying the current expected risk-free return.
 
Typically, analysts estimate the equity risk premium for the national equity market of the issues being analyzed (but if a global CAPM is being used, a world equity premium is estimated that takes into account the totality of equity markets).
 
'''Historical estimates'''
 
A historical equity risk premium estimate is usually calculated as the mean value of the differences between broad-based equity-market-index returns and government debt returns over some selected sample period. When reliable long-term records of equity returns are available, historical estimates have been a familiar and popular choice of estimation. If investors do not make systematic errors in forming expectations, then, over the long term, average returns should be an unbiased estimate of what investors expected. The fact that historical estimates are based on data also gives them an objective quality.
 
In using a historical estimate to represent the equity risk premium going forward, the analyst is assuming that returns are stationary—that is, the parameters that describe the return-generating process are constant over the past and into the future.
 
'''Forward-looking estimates'''
 
Because the equity risk premium is based only on expectations for economic and financial variables from the present going forward, it is logical to estimate the premium directly based on current information and expectations concerning such variables. Such estimates are often called forward-looking or ex ante estimates. In principle, such estimates may agree with, be higher, or be lower than historical equity risk premium estimates. Ex ante estimates are likely to be less subject to an issue such as non-stationarity or data biases than historical estimates. However, such estimates are often subject to other potential errors related to financial and economic models and potential behavioural biases in forecasting.
 
Here, the equity risk premium is in relation to the global region, and is calculated as at 1st January 2022 (<nowiki>https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/ctryprem.html</nowiki>).
|-
|Cost of equity (%)
|9.91%
|Cost of equity = Risk-free rate + Beta x Equity risk premium.
|}
{| class="wikitable"
|+Key financials
!Description
!Value
!Commentary
|-
|Cost of goods sold as a proportion of revenue (%)
|62%
|Stockhub suggests that to account for one-off events, it's best to take the three-year average (median) amount.
|-
|Operating expenses as a proportion of revenue (%)
|13%
|Stockhub suggests that to account for one-off events, it's best to take the three-year average (median) amount.
|-
|Tax rate (%)
|14%
|Stockhub suggests that to account for one-off events, it's best to take the three-year average (median) amount.
|-
|Depreciation and amortisation as a proportion of revenue (%)
|4%
|Stockhub suggests that to account for one-off events, it's best to take the three-year average (median) amount.
|-
|Fixed capital as a proportion of revenue (%)
|{{#expr:trunc(11085000/365817000*100)}}% 
|Stockhub suggests that to account for one-off events, it's best to take the three-year average (median) amount.
|-
|Working capital as a proportion of revenue (%)
|{{#expr:trunc((134836000-125481000)/365817000*100)}}% 
|Stockhub suggests that to account for one-off events, it's best to take the three-year average (median) amount.
|-
|Net borrowing ($000)
|${{formatnum:{{#expr:trunc(15613000+109106000-62639000)}}}}
|Stockhub suggests that to account for one-off events, it's best to take the three-year average (median) amount.
|-
|Interest amount ($000)
|$2,645,000
|Stockhub suggests that to account for one-off events, it's best to take the three-year average (median) amount.
|}
 
==== Cenntro Electric Group Limited ====
 
{{Cenntro Electric Group Limited cost of equity calculation}}
{{Cenntro Electric Group Limited key financials}}
 
===Economic links to cash flow patterns ===
{| class="wikitable"
|+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;" |-
|-
|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;" |+/-
|}
 
=== Timeline of production and sales ===
 
In 2020, Tesla ranked as the world's best-selling plug-in and battery electric passenger car manufacturer, with a market share of 16% of the plug-in segment and 23% of the battery electric segment 2020 sales.<ref>{{cite web|last=Kane|first=Mark |date=February 6, 2020|title=World's Top 5 EV Automotive Groups Ranked By Sales: Q1-Q4 2020|url=https://insideevs.com/news/486325/world-top-ev-automotive-groups-2020/|access-date=February 7, 2021|website=InsideEVs|language=en}}</ref> Tesla reported 2021 vehicle deliveries of 936,222 units, up 87% from 2020.<ref name=Tesla4Q2021final>{{cite web| title=Tesla Fourth Quarter & Full Year 2021 Update | url=https://tesla-cdn.thron.com/static/WIIG2L_TSLA_Q4_2021_Update_O7MYNE.pdf?xseo=&response-content-disposition=inline%3Bfilename%3D%22tsla-q4-and-fy-2021-update.pdf%22 |publisher=Tesla |location=[[Palo Alto]] | date=January 26, 2022 | access-date=January 27, 2022}} See table "Operational Summary" pp. 7 and 8 for revised and final production and sales numbers.</ref>  At the end of 2021, Tesla's global sales since 2012 totalled 2.3&nbsp;million units.<ref name=Tesla2021>{{cite web|url=https://insideevs.com/news/563407/tesla-2021q4-final-delivery-numbers/ |title=Tesla Q4 2021 Final EV Delivery Numbers And Outlook |first=Mark |last=Kane |work=InsideEVs |date=January 27, 2022 |access-date=January 27, 2022 |quote=Cumulatively, Tesla sold over 2.3 million electric cars.}}</ref>
{| class="wikitable"<!-- display data as diagram too -->
|- style="text-align:center;"
! Quarter !! Cumulative<br />production !! Total<br />production !! Model S<br />sales !! Model X<br />sales !! Model 3<br />sales
! Model Y<br />sales!! Total<br />sales !! In transit || Source
|- style="text-align:center;"
| Q3 2012 || N/A || 350 || 250+ || style="background:#f1f5fa;" | || style="background:#f1f5fa;" | || style="background:#f1f5fa;" | || 250+ || ||<ref>{{cite web |url=https://tesla-cdn.thron.com/static/ZRLLWN_Q2_2012_Shareholder_Letter_Final_FN3CKV.pdf |title=Tesla Motors, Inc. – Third Quarter 2012 Shareholder Letter  |author=Tesla Motors |publisher=Tesla Motors |date=November 5, 2012 |access-date=November 21, 2020}} ''Over 250 Model S deliveries in Q3, exceeding target upper bound ''</ref>
|- style="text-align:center;"
| Q4 2012 || N/A || 2,750+ || 2,400 || style="background:#f1f5fa;" | || style="background:#f1f5fa;" | || style="background:#f1f5fa;" | || 2,400 || ||<ref>{{cite web |url=https://tesla-cdn.thron.com/static/P8DUMV_Q4_12_SHL_022013_final_QUVRKE.pdf|title=Tesla Motors, Inc. – Fourth Quarter & Full Year 2012 Shareholder Letter |author=Tesla Motors |publisher=Tesla Motors |date=February 20, 2013 |access-date=November 21, 2020}} ''Achieved 20,000 annualized production rate''</ref>
|- style="text-align:center;"
| Q1 2013 || N/A || 5,000+ || 4,900 || style="background:#f1f5fa;" | || style="background:#f1f5fa;" | || style="background:#f1f5fa;" | || 4,900 || ||<ref>{{cite web |url=https://ir.tesla.com/static-files/26b677b6-a22c-4222-a3c6-4bb516bfdac8 |title=Tesla Motors – First Quarter 2013 Shareholder Letter |author=Tesla Motors |publisher=Tesla Motors |date=May 8, 2013 |access-date=September 23, 2019}} ''Record sales of $562 million, up 83% from last quarter''</ref>
|- style="text-align:center;"
| Q2 2013 || N/A || N/A || 5,150 || style="background:#f1f5fa;" | || style="background:#f1f5fa;" | || style="background:#f1f5fa;" | || 5,150 || ||<ref>{{cite web |url=https://ir.tesla.com/static-files/8a80aee7-ca20-4ff2-9d5b-e25aae776331 |title=Tesla Motors – Second Quarter 2013 Shareholder Letter |author=Tesla Motors |publisher=Tesla Motors |date=August 7, 2013 |access-date=September 23, 2019}} ''Record Q2 Model S deliveries of 7,579 vehicles.''</ref>
|- style="text-align:center;"
| Q3 2013 || N/A || N/A || 5,500+ || style="background:#f1f5fa;" | || style="background:#f1f5fa;" | || style="background:#f1f5fa;" | || 5,500+ || ||<ref>{{cite web |url=https://ir.tesla.com/static-files/6496fc94-630f-41c7-96c6-94d4cafe4e86 |title=Tesla Motors – Third Quarter 2013 Shareholder Letter |author=Tesla Motors |publisher=Tesla Motors |location=Palo Alto, California |date=November 5, 2013 |access-date=September 23, 2019}} ''Record 5,500 Model S deliveries''</ref>
|- style="text-align:center;"
| Q4 2013 || ~34,851 || 6,587 || 6,892 || style="background:#f1f5fa;" | || style="background:#f1f5fa;" | || style="background:#f1f5fa;" | || 6,892 || ||<ref>{{cite web |url=https://ir.tesla.com/static-files/dcbd65a8-c7aa-4538-8a81-49b1b1971a14 |title=Tesla Motors - Fourth Quarter & Full Year 2013 Shareholder Letter |date=February 19, 2014 |publisher=Tesla Motors |access-date=September 23, 2019}} ''Record 6,892 Model S vehicles sold and delivered in Q4''</ref>
|- style="text-align:center;"
| Q1 2014 || ~41,438 || 7,535 || 6,457 || style="background:#f1f5fa;" | || style="background:#f1f5fa;" | || style="background:#f1f5fa;" | || 6,457 || ||<ref>{{cite web |url=https://ir.tesla.com/static-files/a6276682-8422-4150-bb10-c9d701220537 |title=Tesla Motors – First Quarter 2014 Shareholder Letter |author=Tesla Motors |publisher=Tesla Motors |date=May 7, 2014 |access-date=September 20, 2019}} ''Record Q1 Model S production of 7,535 vehicles.''</ref>
|- style="text-align:center;"
| Q2 2014 || ~48,973 || 8,763 || 7,579 || style="background:#f1f5fa;" | || style="background:#f1f5fa;" | || style="background:#f1f5fa;" | || 7,579 || ||<ref>{{cite web |url=https://ir.tesla.com/static-files/b818e6ca-a8ba-4189-8b5d-a64b90307917 |title=Tesla Motors – Second Quarter 2014 Shareholder Letter |author=Tesla Motors |publisher=Tesla Motors |date=July 31, 2014 |access-date=September 20, 2019}} ''Record Q2 Model S deliveries of 7,579 vehicles.''</ref>
|- style="text-align:center;"
| Q3 2014 || ~57,736 || ~7,075 || 7,785 || style="background:#f1f5fa;" | || style="background:#f1f5fa;" | || style="background:#f1f5fa;" | || 7,785 || ||<ref>{{cite web |url=https://ir.tesla.com/static-files/53e161cf-e04f-495c-9fa5-60dcd79231fd |title=Tesla Motors – Third Quarter 2014 Shareholder Letter |author=Tesla Motors |publisher=Tesla Motors |location=Palo Alto, California |date=November 5, 2014 |access-date=September 20, 2019}} ''Highest ever quarterly deliveries at 7,785 vehicles, despite factory shutdown in July''</ref>
|- style="text-align:center;"
| Q4 2014 || 64,811 || 11,627 || 9,834 || style="background:#f1f5fa;" | || style="background:#f1f5fa;" | || style="background:#f1f5fa;" | || 9,834 || ||<ref>{{cite web |url=https://ir.tesla.com/static-files/be63b49e-c7ff-4c02-a5ea-2545f60e5b79 |title=Tesla Motors - Fourth Quarter & Full Year 2014 Shareholder Letter |date=February 11, 2015 |publisher=Tesla Motors |access-date=September 20, 2019}}</ref>
|- style="text-align:center;"
| Q1 2015 || 76,438 || 11,160 || 10,045 || style="background:#f1f5fa;" | || style="background:#f1f5fa;" | || style="background:#f1f5fa;" | || 10,045 || ||<ref>{{cite web |url=http://files.shareholder.com/downloads/ABEA-4CW8X0/202903254x0x827135/90332B15-F6AE-4F44-B634-624BE548291E/Tesla_Motors_Q1_15_Shareholder_Letter.pdf |title=Tesla Motors – First Quarter 2015 Shareholder Letter |author=Tesla Motors |publisher=Tesla Motors |date=May 6, 2015 |access-date=August 4, 2016}} ''A total of 10,045 Model S cars were delivered globaly during the first quarter of 2015.''</ref>
|- style="text-align:center;"
| Q2 2015 || 89,245 || 12,807 || 11,532 || style="background:#f1f5fa;" | || style="background:#f1f5fa;" | || style="background:#f1f5fa;" | || 11,532 || ||<ref>{{cite web |url=http://files.shareholder.com/downloads/ABEA-4CW8X0/380261427x0x843991/DCDCCFDA-0709-405B-931A-B2F48A224CE8/Tesla_Q2_2015_Shareholder_Letter.pdf |title=Tesla Motors – Second Quarter 2015 Shareholder Letter |author=Tesla Motors |publisher=Tesla Motors |date=August 5, 2015 |access-date=August 4, 2016}} ''A total of 11,532 Model S cars were delivered globally during the second quarter of 2015.''</ref>
|- style="text-align:center;"
| Q3 2015 || 102,336 || 13,091 || 11,597 || 6 || style="background:#f1f5fa;" | || style="background:#f1f5fa;" | || 11,603 || ||<ref>{{cite press release |url=http://files.shareholder.com/downloads/ABEA-4CW8X0/380261427x0x858516/F50A9FAF-BA73-4263-8E16-DE1FAC0BABDF/Q3_15_Shareholder_Letter.pdf |title=Tesla Motors – Third Quarter 2015 Shareholder Letter |author=Tesla Motors |publisher=Tesla Motors |location=Palo Alto, California |date=August 4, 2016 |access-date=November 3, 2015}} ''Tesla global electric car sales totaled 11,603 units during the third quarter of 2015, including six Tesla Model X units.''</ref>
|- style="text-align:center;"
| Q4 2015 || 116,373 || 14,037 || 17,272 || 206 || style="background:#f1f5fa;" | || style="background:#f1f5fa;" | || 17,478 || ||<ref>{{cite web |url=http://files.shareholder.com/downloads/ABEA-4CW8X0/456867397x0x874449/945B9CF5-86DA-4C35-B03C-4892824F058D/Q4_15_Tesla_Update_Letter.pdf |title=Tesla Fourth Quarter & Full Year 2015 Update |date=February 10, 2016 |publisher=Tesla Motors |access-date=February 10, 2016}}</ref>
|- style="text-align:center;"
| Q1 2016 || 131,883 || 15,510 || 12,420 || 2,400 || style="background:#f1f5fa;" | || style="background:#f1f5fa;" | || 14,820 || 2,615 ||<ref name="Tesla1Q2016">{{cite web |url=http://files.shareholder.com/downloads/ABEA-4CW8X0/2007076272x0x889927/27EE2FDA-9C77-4D6A-8CEE-E8DFE45227BA/Q1_2016_Tesla_Shareholder_Letter.pdf |title=Tesla shareholders letter:Tesla First Quarter 2016 Update |author=Tesla Motors |publisher=Tesla Motors |date=May 4, 2016 |access-date=August 4, 2016 |archive-url= https://web.archive.org/web/20160601053039/http://files.shareholder.com/downloads/ABEA-4CW8X0/2007076272x0x889927/27EE2FDA-9C77-4D6A-8CEE-E8DFE45227BA/Q1_2016_Tesla_Shareholder_Letter.pdf |archive-date=June 1, 2016 |url-status=dead}}</ref>
|- style="text-align:center;"
| Q2 2016 || 150,228 || 18,345 || 9,764 || 4,638|| style="background:#f1f5fa;" | || style="background:#f1f5fa;" | || 14,402 || 5,150 ||<ref>{{cite press release |url=http://files.shareholder.com/downloads/ABEA-4CW8X0/2563692152x0x903036/562D56A1-5426-4D79-8B99-3408D1B60226/Q2_16_Update_Letter_-_final.pdf |title=Tesla Second Quarter 2016 Update |publisher=Tesla Motors |location=[[Palo Alto]] |date=August 3, 2016 |access-date=August 3, 2016}} ''During the second quarter of 2016 Tesla Motors delivered 14,402 new vehicles consisting of 9,764 Model S and 4,638 Model X. Production during 2Q 2016 totaled 18,345 vehicles.''</ref><ref>{{cite press release |url=http://ir.tesla.com/releasedetail.cfm?ReleaseID=978031 |title=Tesla Q2 2016 Vehicle Production and Deliveries |publisher=Tesla Motors |location=[[Palo Alto]] |date=July 3, 2016 |access-date=August 3, 2016}}</ref>
|- style="text-align:center;"
| Q3 2016 || 175,413 || 25,185 || 16,047 || 8,774 || style="background:#f1f5fa;" | || style="background:#f1f5fa;" | || 24,821 || 5,065 ||<ref>{{cite web |url=http://files.shareholder.com/downloads/ABEA-4CW8X0/3100729770x0x913801/F9E5C36A-AFDD-4FF2-A375-ED9B0F912622/Q3_16_Update_Letter_-_final.pdf |title=Tesla Third Quarter 2016 Update |work=Tesla Motors |location=[[Palo Alto]] |date=October 26, 2016 |access-date=October 27, 2016}}</ref>
|- style="text-align:center;"
| Q4 2016 || 200,295 || 24,882 || 12,700 || 9,500 || style="background:#f1f5fa;" | || style="background:#f1f5fa;" | || 22,254 || 6,450 ||<ref>{{cite web |url=http://ir.tesla.com/releasedetail.cfm?ReleaseID=1006161 |title=Tesla Q4 2016 Production and Deliveries |work=Tesla Motors |location=[[Palo Alto]] |date=January 3, 2017 |access-date=January 3, 2017}}</ref><ref name="Tesla4Q2016final">{{cite web |url=http://files.shareholder.com/downloads/ABEA-4CW8X0/3853068125x0x929284/22C29259-6C19-41AC-9CAB-899D148F323D/TSLA_Update_Letter_2016_4Q.pdf |title=Tesla Fourth Quarter & Full Year 2016 Update |work=Tesla Inc. |location=[[Palo Alto]] |date=February 22, 2017 |access-date=February 22, 2017 |archive-url= https://web.archive.org/web/20170223212145/http://files.shareholder.com/downloads/ABEA-4CW8X0/3853068125x0x929284/22C29259-6C19-41AC-9CAB-899D148F323D/TSLA_Update_Letter_2016_4Q.pdf |archive-date=February 23, 2017 |url-status=dead |df=mdy-all}} ''Production totaled 24,882 vehicles in 4Q 2016 and vehicle deliveries totaled 22,252 units. No breakdown by model was provided.''</ref>
|- style="text-align:center;"
| Q1 2017 || 225,713 || 25,418 || ~13,450 || ~11,550 || style="background:#f1f5fa;" | || style="background:#f1f5fa;" | || 25,051 || ~4,650 ||<ref name="Tesla1Q2017">{{cite press release |title=Tesla Q1 2017 Vehicle Production and Deliveries |date=April 2, 2017 |publisher=Market Wired |location=[[Palo Alto]] |url=http://ir.tesla.com/releasedetail.cfm?ReleaseID=1019685 |quote=Tesla (NASDAQ: TSLA) delivered just over 25,000 vehicles in Q1, of which approx 13,450 were Model S and approx 11,550 were Model X. |access-date=April 4, 2017 |work=Tesla Motors}}</ref>
|- style="text-align:center;"
| Q2 2017 || 251,421 || 25,708 || ~12,000 || ~10,000 || style="background:#f1f5fa;" | || style="background:#f1f5fa;" | || 22,026 || ~3,500 ||<ref name="Tesla2Q2017">{{cite web |url=http://ir.tesla.com/releasedetail.cfm?ReleaseID=1032479 |title=UPDATE – Tesla Q2 2017 Vehicle Production and Deliveries |publisher=Tesla |date=July 7, 2017 |access-date=July 10, 2017}}</ref><ref>{{cite web |url=http://files.shareholder.com/downloads/ABEA-4CW8X0/4934165653x0x952053/F302D22F-FC9B-41A3-9534-60D0032673CC/TSLA_Update_Letter_2017-2Q.pdf |title=Tesla Second Quarter 2017 Update (Letter to shareholders) |publisher=Tesla |date=August 2, 2017 |access-date=August 5, 2017 |quote=We delivered 22,026 Model S and Model X vehicles in Q2, for a total of 47,077 in the first half of the year. |archive-url= https://web.archive.org/web/20170805101731/http://files.shareholder.com/downloads/ABEA-4CW8X0/4934165653x0x952053/F302D22F-FC9B-41A3-9534-60D0032673CC/TSLA_Update_Letter_2017-2Q.pdf |archive-date=August 5, 2017 |url-status=dead}}</ref>
|- style="text-align:center;"
| Q3 2017 || 276,757 || 25,336 || 14,065 || 11,865 || 222 || style="background:#f1f5fa;" | || 26,137 || 4,820 ||<ref name="Tesla3Q2017">{{cite web |url=http://ir.tesla.com/releasedetail.cfm?ReleaseID=1042449 |title=Tesla Q3 2017 Vehicle Deliveries and Production |publisher=Tesla |date=October 2, 2017}}</ref><ref name="3Q2017Tesla250K">{{cite web |url=http://files.shareholder.com/downloads/ABEA-4CW8X0/5846881552x0x962149/00F6EB90-2695-44E6-8C03-7EC4E06DF840/TSLA |title=_Update_Letter_2017-3Q.pdf Tesla Third Quarter 2017 Update |publisher=Tesla |date=November 1, 2017 |access-date=January 10, 2018 |archive-url= https://web.archive.org/web/20180111165022/http://files.shareholder.com/downloads/ABEA-4CW8X0/5846881552x0x962149/00F6EB90-2695-44E6-8C03-7EC4E06DF840/TSLA |archive-date=January 11, 2018 |url-status=dead}}</ref>
|- style="text-align:center;"
| Q4 2017 || 301,322 || 24,565 || ~15,200 || ~13,120|| 1,542 || style="background:#f1f5fa;" | || 29,967 || 3,380 ||<ref name="Tesla4Q2017">{{cite web |url=http://ir.tesla.com/releasedetail.cfm?ReleaseID=1053245 |title=Tesla Q4 2017 Vehicle Production and Deliveries |publisher=Tesla |date=January 3, 2018}}</ref><ref name="Tesla4Q2017_AggProduction">{{cite web |url=https://electrek.co/2018/02/14/tesla-delivered-300000th-vehicle/ |title=Tesla confirms having produced its 300,000th electric car |publisher=Tesla |date=February 14, 2018}}</ref><ref name="Tesla4Q2017final">{{cite press release |url=http://files.shareholder.com/downloads/ABEA-4CW8X0/4934165653x0x970775/34923C55-6853-4223-ADDA-CB3CDC1B919F/TSLA_Update_Letter_2017-4Q.pdf |title=Tesla Fourth Quarter & Full Year 2017 Update |publisher=Tesla |work=Tesla |location=[[Palo Alto]] |date=February 7, 2017 |access-date=February 7, 2018 |quote=In Q4, we delivered 28,425 Model S and Model X vehicles and 1,542 Model 3 vehicles, totaling 29,967 deliveries. |archive-url= https://web.archive.org/web/20180208182745/http://files.shareholder.com/downloads/ABEA-4CW8X0/4934165653x0x970775/34923C55-6853-4223-ADDA-CB3CDC1B919F/TSLA_Update_Letter_2017-4Q.pdf |archive-date=February 8, 2018 |url-status=dead}}</ref>
|- style="text-align:center;"
| Q1 2018 || 335,816 || 34,494 || 11,730 || 10,070|| 8,182 || style="background:#f1f5fa;" | || 29,997 || 6,100 ||<ref name="Tesla1Q2018">{{cite web |url=http://files.shareholder.com/downloads/ABEA-4CW8X0/3853068125x0x979026/44C49236-1FC2-4FD9-80B1-495ED74E4194/TSLA_Update_Letter_2018-1Q.pdf |title=Tesla First Quarter 2018 Update |publisher=Tesla |access-date=May 27, 2018 |archive-url= https://web.archive.org/web/20180527202413/http://files.shareholder.com/downloads/ABEA-4CW8X0/3853068125x0x979026/44C49236-1FC2-4FD9-80B1-495ED74E4194/TSLA_Update_Letter_2018-1Q.pdf |archive-date=May 27, 2018 |url-status=dead}}</ref>
|- style="text-align:center;"
| Q2 2018 || 389,155 || 53,339 || 10,930 || 11,370|| 18,440 || style="background:#f1f5fa;" | || 40,740 || 15,058 || <ref name="Tesla2Q2018">{{cite web |url=http://ir.tesla.com/news-releases/news-release-details/tesla-q2-2018-vehicle-production-and-deliveries |title=Tesla Second Quarter 2018 Delivery |publisher=Tesla |access-date=July 22, 2018}}</ref><ref name="Tesla2Q2018final">{{cite report|url=http://ir.tesla.com/static-files/7235e525-db16-470c-8dce-9ecac0ad7712 |page=2|title=Automotive Products|work=Tesla Second Quarter 2018 Update|date=August 1, 2018|access-date=August 2, 2018|first=RR|last1=Donnelley|quote=We produced 53,339 vehicles in Q2 and delivered 22,319 Model S and Model X vehicles and 18,449 Model 3 vehicles, totaling 40,768 deliveries.}}</ref>
|- style="text-align:center;"
| Q3 2018 || 469,297 || 80,142 || 14,470 || 13,190|| 56,065 || style="background:#f1f5fa;" | || 83,725 || 11,824 || <ref name="Tesla3Q2018">{{cite web |url=http://ir.tesla.com/news-releases/news-release-details/tesla-q3-2018-vehicle-production-and-deliveries |title=Tesla Third Quarter 2018 Delivery |publisher=Tesla |access-date=October 2, 2018}}</ref><ref name="Tesla3Q2018final">{{cite web| title=Tesla Third Quarter 2018 Update | url=http://ir.tesla.com/static-files/725970e6-eda5-47ab-96e1-422d4045f799 |publisher=Tesla |location=[[Palo Alto]] | date=October 24, 2018 |access-date=October 24, 2018}}
</ref>
|- style="text-align:center;"
| Q4 2018 || 555,852 || 86,555 || 13,500 || 14,050 || 63,359 || style="background:#f1f5fa;" | || 90,700 || 2,907 || <ref name="Tesla4Q2018">{{cite web |url=http://ir.tesla.com/news-releases/news-release-details/tesla-q4-2018-vehicle-production-deliveries-also-announcing-2000 |title=Tesla Fourth Quarter 2018 Delivery |publisher=Tesla |access-date=January 2, 2019}}</ref><ref name="Tesla4Q2018final">{{cite web| title=Tesla Fourth Quarter & Full Year 2018 Update | url=http://ir.tesla.com/static-files/0b913415-467d-4c0d-be4c-9225c2cb0ae0 |publisher=Tesla |location=[[Palo Alto]] | date=January 30, 2019| access-date=January 30, 2019|quote=In Q4, we delivered 63,359 Model 3 vehicles to customers in North America. }}</ref>
|- style="text-align:center;"
| Q1 2019 || 632,952 || 77,100 || colspan="2" | 12,100 || 50,900 || style="background:#f1f5fa;" | || 63,000 || 10,600 || <ref name="Tesla1Q2019">{{cite press release|publisher=Tesla |url=http://ir.tesla.com/news-releases/news-release-details/tesla-q1-2019-vehicle-production-deliveries |title=Tesla Q1 2019 Vehicle Production & Deliveries |location=Palo Alto |date=April 4, 2019 |access-date=April 4, 2019}}</ref>
|- style="text-align:center;"
| Q2 2019 || 720,000 || 87,048 || colspan="2" | 17,650 || 77,550 || style="background:#f1f5fa;" | || 95,200 || 7,400 || <ref name="Tesla2Q2019">{{cite press release|publisher=Tesla |url=https://ir.tesla.com/news-releases/news-release-details/tesla-q2-2019-vehicle-production-deliveries |title=Tesla Q2 2019 Vehicle Production & Deliveries |location=Palo Alto |date=July 2, 2019 |access-date=July 2, 2019}}</ref><ref name="wired20190703">{{cite magazine |url=https://www.wired.com/story/tesla-model-3-can-survive-crash-avoid-one-too/ |title=Tesla Model 3 Can Survive a Crash—and Avoid One, Too |first=Alex |last=Davies |magazine=Wired |location=US |date=July 3, 2019 |access-date=July 9, 2019}}</ref>
|- style="text-align:center;"
| Q3 2019 || 816,155 || 96,155 || colspan="2" | 17,483 || 79,703 || style="background:#f1f5fa;" | || 97,186 || || <ref name="Tesla3Q2019">{{cite press release|publisher=Tesla |url=https://ir.tesla.com/static-files/47313d21-3cac-4f69-9497-d161bce15da4 |title=Q3 2019 Update|location=Palo Alto |date=Oct 23, 2019 |access-date=Jan 7, 2020}}</ref>
|- style="text-align:center;"
| Q4 2019 || 921,046 || 104,891 || colspan="2" | 19,475 || 92,620 || style="background:#f1f5fa;" | || 112,095 || || <ref name="Tesla4Q2020" />
|- style="text-align:center;"
|Q1 2020 || 1,023,718 || 102,672 || colspan="2" | 12,230 || colspan="2" | 76,266 || 88,496 || || |<ref name="Tesla4Q2020" />
|- style="text-align:center;"
|Q2 2020 || 1,105,990 || 82,272 || colspan="2" | 10,614 || colspan="2" | 80,277 || 90,891 || || <ref name="Tesla4Q2020" />
|- style="text-align:center;"
|Q3 2020 || 1,251,026 || 145,036 || colspan="2" | 15,275 || colspan="2" | 124,318 || 139,593 || || <ref name="Tesla4Q2020" />
|- style="text-align:center;"
|Q4 2020 || 1,430,783 || 179,757 || colspan="2" | 18,966 || colspan="2" | 161,701 || 180,667 || || <ref name="Tesla4Q2020">{{cite web| title=Tesla Fourth Quarter & Full Year 2020 Update | url=https://tesla-cdn.thron.com/static/1LRLZK_2020_Q4_Quarterly_Update_Deck_-_Searchable_LVA2GL.pdf |publisher=Tesla |location=[[Palo Alto]] | date=2021-01-27 | access-date=2021-02-07}}</ref>
|- style="text-align:center;"
|Q1 2021 || 1,611,121 || 180,338 || colspan="2" | 2,030  || colspan="2" | 182,847 || 184,877 || || <ref name="Tesla1Q2021">{{cite web| title=Tesla Q1 2021 Quarterly Update | url=https://tesla-cdn.thron.com/delivery/public/document/tesla/a1ab64e7-7c18-421c-a898-9b60397b017b/S1dbei4/WEB/TSLA-Q1-2021-Update |publisher=Tesla |location=[[Palo Alto]] | date=2021-04-26 | access-date=2021-04-26}}</ref>
|- style="text-align:center;"
|Q2 2021 || 1,817,542 || 206,421 || colspan="2" | 1,895 || colspan="2" | 199,409 || 201,304 || || <ref name="Tesla2Q2021">{{cite web| title=Tesla Q2 2021 Quarterly Update | url=https://tesla-cdn.thron.com/delivery/public/document/tesla/915a0dab-11c4-4d81-9526-52995afb67ee/S1dbei4/WEB/q2_2021 |publisher=Tesla |location=[[Palo Alto]] | date=2021-07-26 | access-date=2021-07-26}}</ref>
|- style="text-align:center;"
|Q3 2021 || 2,055,365 || 237,823 || colspan="2" | 9,289 || colspan="2" | 232,102 || 241,391 || || <ref name="Tesla3Q2021">{{cite web| title=Tesla Q3 2021 Quarterly Update | url=https://tesla-cdn.thron.com/delivery/public/document/tesla/c7f38479-c161-4ddb-8e09-31211aa8078d/S1dbei4/WEB/TSLA-Q3-2021-Quarterly-Update |publisher=Tesla |location= [[Austin]] | date=2021-10-20 | access-date=2021-10-21}}</ref>
|- style="text-align:center;"
|Q4 2021 || 2,361,205 || 305,840 || colspan="2" | 11,766 || colspan="2" | 296,884 || 308,650 || || <ref name="Tesla4Q2021">{{cite web| title=Tesla Fourth Quarter & Full Year 2021 Update | url=https://tesla-cdn.thron.com/delivery/public/document/tesla/99573663-409d-442d-b1f6-50bfc75cb41c/S1dbei4/WEB/tsla-q4-and-fy-2021-update |publisher=Tesla |location= [[Austin]] | date=2022-01-27 | access-date=2022-01-27}}</ref>
|- style="text-align:center;"
|Q1 2022 || 2,666,612 || 305,407 || colspan="2" | 14,724 || colspan="2" | 295,324 || 310,048 || || <ref name="Tesla1Q2022">{{cite web| title=Tesla Vehicle Production & Deliveries for First Quarter 2022 | url=https://ir.tesla.com/press-release/tesla-vehicle-production-deliveries-and-date-financial-results-webcast-first-quarter |publisher=Tesla |location= [[Austin]] | date=2022-04-02 | access-date=2022-04-03}}</ref>
|- style="text-align:center;"
|Q2 2022
|2,925,192
|258,580
| colspan="2" |16,162
| colspan="2" |238,533
|254,695
|
|
|}
 
=== Global greenhouse gas emissions by sector<ref name=":11">https://ourworldindata.org/emissions-by-sector</ref> ===
 
The 'energy use in industry' category relates to the energy used to manufacture products connected to the industry sector, such as iron and steel (7.2%), chemicals & petrochemicals (3.6%) and tobacco products and food processing (1%).
 
The transport category relates to the emissions generated from the 'powering' of transport activities. Note, the transport category does not include emissions from the manufacturing of motor vehicles or other transport equipment (those emissions are included in the ‘energy use in industry’ category).
 
According to the Global Change Data Lab charity, to reach net-zero emissions, there is no single fix; innovations across many sectors are needed<ref name=":11" />. For example, even if we could fully decarbonize our electricity supply, we would also need to electrify all of our heating and road transport.<ref name=":11" />
 
{| class="wikitable sortable"
|+'''Global greenhouse gas emissions by sector'''
!Processes
!Contributions to global greenhouse gas emissions (%)
!Sector
|-
|Energy use in industry
|24.2%
|Energy
|-
|Transport
|16.2%
|Energy
|-
|Energy use in buildings
|17.5%
|Energy
|-
|Unallocated fuel combustion
|7.8%
|Energy
|-
|Fugitive emissions from energy production
|5.8%
|Energy
|-
|Energy use in agriculture and fishing
|1.7%
|Energy
|-
|Cement
|3.0%
|Industry
|-
|Chemicals & petrochemicals
|2.2%
|Industry
|-
|Wastewater
|1.3%
|Waste
|-
|Landfills
|1.9%
|Waste
|-
|Grassland
|0.1%
|Agriculture, Forestry and Land Use
|-
|Cropland
|1.4%
|Agriculture, Forestry and Land Use
|-
|Deforestation
|2.2%
|Agriculture, Forestry and Land Use
|-
|Crop burning
|3.5%
|Agriculture, Forestry and Land Use
|-
|Rice cultivation
|1.3%
|Agriculture, Forestry and Land Use
|-
|Agricultural soils
|4.1%
|Agriculture, Forestry and Land Use
|-
|Livestock & manure
|5.8%
|Agriculture, Forestry and Land Use
|}
 
== Notes==
 
'''Bid-ask spread'''
 
The bid–ask spread is the difference between the prices quoted for an immediate sale (ask) and an immediate purchase (bid) for the investment.
 
For example, if the price to buy an investment is $663.90 and the price to sell the investment is $663.89, the bid-ask spread of the investment is $0.01 (i.e.$663.90 minus $663.89). Converting the figure into percentage, the bid-ask spread is 0.0015063% (i.e. $0.01 divided by $663.90).
 
'''Investment risk'''
 
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 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:-
 
Current ratio = Current assets divided by current liabilities
 
Acceptable current ratios vary from industry to industry and from business lifecycle stage.
 
'''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.
 
A normal liquid ratio is considered to be 1:1. A company with a quick ratio of less than 1 cannot currently fully pay back its current liabilities.
 
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 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 derived by adding a company's total reserves of cash and near-cash securities and dividing that sum by its total current liabilities.
 
The cash ratio is more conservative than other liquidity ratios because it only considers a company's most liquid resources.
 
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.
 
'''Power purchase agreement'''
 
A power purchase agreement (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.
 
'''Energy capacity'''
 
The energy capacity is defined as the ability of a material to absorb and store energy.
 
'''Kilowatt-hour'''
 
The kilowatt-hour (kWh) is a unit of energy equal to one kilowatt of power sustained for one hour and is commonly used as a measure of electrical energy. One kilowatt-hour is equal to 3600 kilojoules (3.6 megajoules).
 
'''Powerwall annual cost calculation'''
{| class="wikitable"
|+'''Powerwall annual cost calculation'''
!Description
!Value
!Commentary
|-
|The cost of Powerall
|$10,500
|
|-
|The lifetime of Powewall
|10 years
|The warrant of the product is 10 years, so have assumed that the lifetime of Powerwall is the same (i.e. 10 years).
|-
|The energy capacity of Powerwall
|13.5 kilowatt hour
|
|-
|The average energy requirement of a household in the United States
|29 kWh per day
|
|}
The annual price of the product = the price of the product divided by the lifetime of the product
 
The annual price of the product = $10,500 / 10 years
 
The annual price of the product = $1,050
 
The number of Powerwalls that are required to power a household = the average energy requirement of a household in the United States divided by the energy capacity of Powerwall
 
The number of Powerwalls that are required to power a household =  29 kWh per day / 13.5 kWh
 
The number of Powerwalls that are required to power a household =  2.14
 
The cost for a household to be powered by Powerwalls only = The number of Powerwalls that are required to power a household multiplied by the annual price of the product
 
The cost for a household to be powered by Powerwalls only = 2.14 x  $1,050
 
The cost for a household to be powered by Powerwalls only = $2,247
 
{| class="wikitable"
|+ Risk rating
|-
! Rating !! Beta
|-
| style="background: green; color: white;" |Low || style="background: green; color: white;" |Equal to or below 0.5
|-
| style="background: orange; color: white;" |Medium || style="background: orange; color: white;" |Between 0.5 and 1.5
|-
| style="background: red; color: white;" |High || style="background: red; color: white;" |Equal to or above 1.5
|}
 
==Actions==
 
To invest in Tesla, click [https://www.hl.co.uk/shares/shares-search-results/t/tesla-inc-usd0.001/buy-and-sell-shares here].
 
To contact Tesla, click [mailto:ir@tesla.com here].
 
==References==
<references />
<references group="Note" />
[[Category:Thesis]]
[[Category:Thesis]]
[[Category:Equities]]
[[Category:Equities]]
[[Category:United States]]
__INDEX__
__INDEX__

Revision as of 10:11, 10 October 2022

On a mission to accelerate the world's transition to sustainable energy.

Key information
Risk/return Risk/return::High
Price per share Price per share::$303.35[1]
Asset class Asset class::Equities[2]
Industry Industry::Consumer Cyclical[1]
Country of incorporation Country of incorporation::United States[2]
Minimum investment amount Minimum investment amount::$10[3]
Maximum investment amount Maximum investment amount::$950.54 billion[1]
Current valuation Current valuation::$950.54 billion[1]
Investor type Investor type::All
Bid/ask spread (%) Bid/ask spread::0.0015063%[1]
Commission amount Commission amount::Zero[3]
Market Market::Public[1]

Summary

  • Tesla is on a mission to accelerate the world's transition to sustainable energy.[4]
  • The company 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.[5]
  • Assuming that Tesla increases its share of the automotive market to 10% (from 2%) and other assumptions, the expected return of an investment in the company over the next five years is negative 24%. In other words, an £1,000 investment in the company is expected to return £760 in five years time.
  • The degree of risk associated with an investment in Tesla is 'high', with the shares having a beta that is 112% above the market (2.12 vs. 1).

Operations

How did the idea of the company come about?

The idea of the company came about when the now founding team of the company realised that the current way that humankind is meeting its energy needs is unsustainable and bad for the planet.[6]

Currently, an estimated 85% of the world's energy needs are met by burning fossil fuels[7], and energy production and consumption are responsible for 76% of annual human-caused greenhouse gas emissions.[8][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.[6]

Accordingly, in the team's quest to accelerate the world’s transition to sustainable energy, the Tesla company was born.

What's the mission of the company?

Tesla is a company that's on a mission to accelerate the world's transition to sustainable energy.[4] In other words, the company's objective is to accelerate the world's transition to energy that meets the needs of the present without compromising the ability of future generations to meet their own needs.

What are the main offerings of the company?

The company's main offerings fall into two main segments: (1) automotive and (2) energy generation and storage.[5]

Automotive

The automotive segment includes the sales and leasing of electric vehicles as well as sales of automotive regulatory credits.[5] 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.[5]

Current offerings
Automotive sales

As of 2nd June 2022, the company offers four main car models: Model S, Model 3, Model X and Model Y.

Model S

Model S is the fastest accelerating and longest ranging car that Tesla provides, with a zero-to-60 miles per hour acceleration of 3.1 seconds and a maximum distance range on a single battery charge of 405 miles, respectively.[10] The price of the car in the US is $99,990.[11]

Model 3

Model 3 is the lowest priced car that Tesla provides, selling in the US at $46,990.

Model X

Model X is the largest cargo capacity car that Tesla provides, with a cargo capacity of 88 cubic feet. The price of the car in the US is $114,990.

Model Y

Model Y is the lowest price per cargo capacity and lowest price per seat car that Tesla provides, at $829 per cubic feet and $8,999 per seat, respectively. The price of the car in the US is $62,990.

A detailed comparison of the Tesla vehicles is shown in the two tables below.

All Tesla vehicles competition comparison
Category Model S Model X Model 3 Model Y
Type Standard[11] Plaid[11] Standard[12] Plaid[12] Rear-Wheel Drive[13] Long Range[13] Performance[13] Long Range[14] Performance[14]
Is the vehicle fully electric? Yes Yes Yes Yes Yes Yes Yes Yes Yes
What's the top acceleration of the vehicle? 3.1 seconds 1.99 seconds 3.8 seconds 2.5 seconds 5.8 seconds 4.2 seconds 3.1 seconds 4.8 seconds 3.5 seconds
What's the maximum distance range of the vehicle on a single battery charge? 405 miles 396 miles 348 miles 333 miles 272 miles 358 miles 315 miles 330 miles 303 miles
What's the top speed of the vehicle? 155 miles per hour 200 miles per hour 155 miles per hour 163 miles per hour 140 miles per hour 145 miles per hour 162 miles per hour 135 miles per hour 155 miles per hour
Which design type is the vehicle? Sedan (i.e. car) Sedan (i.e. car) SUV (i.e. car) SUV (i.e. car) Sedan (i.e. car) Sedan (i.e. car) Sedan (i.e. car) SUV (i.e. car) SUV (i.e. car)
What is the safety rating of the vehicle? 5 out of 5 stars 5 out of 5 stars 5 out of 5 stars 5 out of 5 stars 5 out of 5 stars 5 out of 5 stars 5 out of 5 stars 5 out of 5 stars 5 out of 5 stars
How many seats does the vehicle have? 5 seats 5 seats 7 seats 6 seats 5 seats 5 seats 5 seats 7 seats 5 seats
What's the cargo capacity of the vehicle? 28 cubic feet 28 cubic feet 88 cubic feet 88 cubic feet 23 cubic feet 23 cubic feet 23 cubic feet 76 cubic feet 76 cubic feet
Which drive wheel does the vehicle have? All-wheel drive All-wheel drive All-wheel drive All-wheel drive Rear-wheel drive All-wheel drive All-wheel drive All-wheel drive All-wheel drive
What's the price of the vehicle? $99,990 $135,990 $114,990 $138,990 $46,990 $55,990 $62,990 $62,990 $67,990
What's the vehicle's price per cargo capacity? $3,571 per cubic feet $4,857 per cubic feet $1,307 per cubic feet $1,579 per cubic feet $2,043 per cubic feet $2,434 per cubic feet $2,739 per cubic feet $829 per cubic feet $895 per cubic feet
What's the vehicle's price per seat? $19,998 per seat $27,198 per seat $16,427 per seat $23,165 per seat $9,398 per seat $11,198 per seat $12,598 per seat $8,999 per seat $13,598 per seat
Which car is the winner in the following categories?
Category Winner Notes
Which Tesla car has the fastest acceleration? Model S Plaid The zero to 60 miles per hour acceleration of the car is 1.99 seconds.
Which Tesla car has the longest range? Model S The range of the car is 405 miles.
Which Tesla car has the highest top speed? Model S Plaid The top speed of the car is 200 miles per hour.
Which Tesla car has the largest cargo capacity? Model X and Model X Plaid The cargo capacity of the car is 88 cubic feet.
Which Tesla car has the most seats? Model X and Model Y Long Range The number of seats in the car is 7 seats.
Which Tesla car is the lowest priced? Model 3 Rear-Wheel Drive The price of the car is $46,990.
Which Tesla car has the lowest price per cargo capacity? Model Y Long Range The price per cargo capacity of the car is $829 per cubic feet.
Which Tesla car has the lowest price per seat? Model Y Long Range The price per seat of the car is $8,999 per seat.
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.[5]

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.[5]

Other current offerings

Service and warranty

Service

Other offerings include the servicing of Tesla vehicles, at company-owned service locations and through Tesla Mobile Service technicians.[5]

Extended service plans

The company offers extended service plans, which provide coverage beyond the new vehicle limited warranties for certain models in specified regions.[5]

Financial services

Purchase financing

The company offers loan financing arrangements for its vehicles in certain jurisdictions in North America, Europe and Asia.[5] In certain situations, Tesla 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.[5]

Insurance

As part of the company's ongoing effort to decrease the total cost of ownership, it offers insurance products on its vehicles.[5] The products are currently available in five US states (Arizona, California, Illinois, Ohio and Texas), and the company plans to offer the products into new geographical markets.[5]

Future offerings
Automotive sales

Cybertruck

Cybertruck is a truck, a motor vehicle designed to transport cargo, carry specialised payloads, or perform other utilitarian work. What will be unique about the offering is that it will be the safest vehicle that Tesla provides. The price of the offering is expected to be $39,900.[15]

Tesla Roadster

The Tesla Roadster is a car. What will be unique about the offering is that it will be the fastest accelerating and longest ranging car that Tesla provides. The price of the offering is around $200,000.[16]

Tesla Semi

Tesla Semi is a semi-trailer truck, a motor vehicle that is designed to transport large cargo, via one or more of its attached trailers. What will be unique about the offering is that it will be the largest cargo capacity vehicle that Tesla provides. The price of the offering is around $150,000.

Ride-hailing service

Tesla has said that it intends to establish an autonomous Tesla ride-hailing network, enabling people to hail a ride.[5] What's unique about the ride-hailing service is that it's expected to be faster and cheaper than the alternatives. 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 sales and leasing of solar energy generation and energy storage products and related services and sales of solar energy systems incentives.[5]

Current offerings
Energy generation and storage sales

Powerwall

Powerwall is a energy storage system (i.e. a type of battery).[5] What’s unique about the offering is that it's the lowest priced energy storage system that Tesla provides, selling at $10,500. The energy capacity of the product is 13.5 kilowatt hour (kWh). To help put the capacity into perspective, in 2020, the average household in the United States consumed 29 kWh per day.[17] So, if the average household is powered from Powerwalls only, then it will require around two Powerwalls to power the whole house, at an average annual cost of $2,247.

Megapack

Megapack is an energy storage system.[5] What’s unique about the offering is that it's the largest energy storage system that Tesla provides, at 3.5 megawatt hour. To help put the energy capacity into perspective, each unit has enough energy to power an average of 3,600 homes for one hour. A single Megapack sells for $1,000,000.

Solar Roof

Solar Roof is a roof tile.[5] 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.

For the average house in the US, the total cost of having the solar roof is $59,700, or around $3,078 per year over the expected lifetime of the roof (the key assumptions used to determine the expected cost can be found in the table below). To help put the cost into perspective, the average energy bill in the United States is $1,380 per year, so, at the moment, meeting the energy needs of the average US household using the Tesla Solar Roof is 2x more expensive than the alternative.

Solar Roof estimated cost calculation
Description Price Commentary
4.98 kW Solar Roof $40,600 The average house in the US is 2,261 square feet in size and 2 stories in height. The warranty period of the solar roof is 25 years. Assuming that the replacement period of the solar roof is the same as the warranty period, then that equates to an annual cost of $1,624. The installation cost is included in the cost.
Roof Tear Off $7,600 Roof tear off refers to the action of 'tearing' off (or removing) the existing roof, something that is required to put on the Tesla tiles. Assuming that the cost is depreciated over the same period as the Tesla tiles (i.e. 25 years), then that equates to an annual cost of $304.
1 Powerwall Battery $11,500 The warranty period of the battery is 10 years. Assuming that the battery needs to be replaced at the end of the warranty period, then that equates to an annual cost of $1,150. Installation cost included.
Total price $59,700 Combining all the above costs together, that equates to a total annual cost of $3,078
Other current offerings

Service and Warranty

Other offerings include servicing and repairs, and extended limited warranties in certain regions.[5]

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.[5] 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.[5] 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.[5]

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 offerings is through media coverage and word of mouth.

What's the current strategy of the company?

According to a blog post in 2016 in which the CEO of Tesla detailed the company's master plan[18], the current strategy of Tesla consists of four milestones:

  1. Create stunning solar roofs with seamlessly integrated battery storage;
  2. Expand the electric vehicle product line to address all major segments;
  3. Develop a self-driving capability that is 10x safer than manual, via massive fleet learning; and
  4. Enable your car to make money for you when you aren't using it.

It's worth noting that 10 years earlier than the publication of the 2016 blog post, Elon detailed the company's first master plan[6], and the company has managed to achieve all of the milestones, which were as follows:

  1. Build a sports car (i.e. the Tesla Model S);
  2. Use that money to build an affordable car (i.e. the Tesla Model 3);
  3. Use that money to build an even more affordable car (i.e. a cheaper version of the Tesla Model 3); and
  4. Provide zero emission electric power generation options (i.e. Tesla Solar Roof and Powerwall and Megapack).

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.

It can be strongly argued that given the company's mission, the total addressable market is actually the global energy market; and research suggests that the estimated size of that market is $6.1 trillion.[19]

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

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

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

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

Elon Musk

For information about Elon Musk, see "Chief Executive Officer" section above.

Robyn M. Denholm

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

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).

<noglossary>‎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.</noglossary>

Larry Ellison

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

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

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

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

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

Tesla revenues over the lifetime of the company

Historic

Most recent quarter

During the three months ended 31st March 2022, net income increased to $3.32 billion on revenues of $18.76 billion, representing a respective increase of 7x and 81% compared to the prior year, and equating to a net income margin of 18%. The company ended the quarter with cash of $18.01 billion, representing an increase of 2% from the end of 2021.

Most recent year

For the fiscal (and calendar) year 2021, Tesla reported a net income of $5.52 billion.[20] The annual revenue was $53.8 billion, an increase of 71% over the previous fiscal year.[20]

All periods

Historic financials[21][Note 1]
Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
Year end date 31/12/2005 31/12/2006[22][23] 31/12/2007 31/12/2008 31/12/2009 31/12/2010[23] 31/12/2011[23] 31/12/2012[23] 31/12/2013[23] 31/12/2014[23] 31/12/2015[23] 31/12/2016[23] 31/12/2017[23] 31/12/2018[23] 31/12/2019[23] 31/12/2020[23] 31/12/2021[23]
Income statement
Revenues ($'million) 0 0 0.073 15 112 117 204 413 2,013 3,198 4,046 7,000 11,759 21,461 24,578 31,536 53,823
Net profits ($'million) -12 -30 -78 -83 −56 −154 −254 −396 −74 −294 −889 −675 −1,962 −976 −862 721 5,519
Balance sheet
Total assets
($'million) 		8 44 34 52 130 386 713 1,114 2,417 5,831 8,068 22,664 28,655 29,740 34,309 52,148 62,131
Other
Employees NA 70 268 252 514 899 1,417 2,914 5,859 10,161 13,058 17,782 37,543 48,817 48,016 70,757 99,290

Forward

What are the financial forecasts?

Forward financials[24][Note 1]
Year 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 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59
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
Income statement
Revenues ($'million) $78,935 $112,257 $154,816 $207,049 $268,527 $337,721 $411,894 $487,157 $558,739 $621,448 $670,282 $701,078 $711,102 $699,445 $667,163 $617,116 $553,551 $481,510 $406,171 $332,253 $263,564 $202,749 $151,247 $109,414 $76,757 $52,217 $34,448 $22,038 $13,673 $8,226 $4,799 $2,715 $1,490 $793 $409 $205 $99 $47 $21 $9 $4 $2
Gross profits ($'million) $23,680 $33,677 $46,445 $62,115 $80,558 $101,316 $185,352 $219,221 $251,432 $279,652 $301,627 $315,485 $319,996 $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 $1,137 $643 $353 $188 $97 $48 $24 $11 $5 $2 $1 $0

What are the assumptions used to estimate the financial forecasts?

Key inputs
Description Value Commentary
Revenue
What's the estimated current size of the total addressable market? $2,975,000,000 Here, the total addressable market (TAM) is defined as the global automotive market, and based on a number of assumptions[Note 2], it is estimated that the size of the market as of today (30th May 2022), in terms of revenue, is $2.975 trillion.


If the TAM is defined as the global energy market, then research suggests that the estimated size of the market is $6.777 trillion.[19]

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.[25]
What's the estimated annual growth rate of the total addressable market over the lifecycle of the company? 3% Research shows that the growth rate of the global automotive market (i.e. the total addressable market) is similar to the growth rate of global gross domestic product[26], which has averaged (medium) around 3% per year in the last 20 years (2001 to 2022)[27].
What's the estimated company peak market share? 10% Stockhub estimates that especially given the leadership of the company, the peak market share of Tesla is around 10%, and, therefore, suggests using the share amount here. As of 31st December 2021, Tesla's current share of the market is estimated at around 1.8%.
Which distribution function do you want to use to estimate company revenue? Gaussian Research suggests that the revenue pattern of companies is similar to the pattern produced by the Gaussian distribution function (i.e. the revenue distribution is bell shaped)[28], so Stockhub suggests using that function here.
What's the estimated standard deviation of company revenue? 6 years Another way of asking this question is this way: within how many years either side of the mean does 68% of revenue occur? Based on Tesla's current revenue amount (i.e. $54 billion) and Tesla's estimated lifespan (i.e. 60 years) and Tesla's estimated current stage of its lifecycle (i.e. growth stage), the Stockhub 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.
Growth stages
How many main stages of growth is the company expected to go through? 4 stages Research suggests that a company typically goes through four distinct stages of cash flow growth.[29] 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.[30]

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.[31] 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. Note, to account for one-off events, the three-year average (median) amount was used to calculate the cash flows.

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.

What proportion of the company lifecycle is represented by growth stage 1? 30% Research suggests 30%.[32]
What proportion of the company lifecycle is represented by growth stage 2? 10% Research suggests 10%.[32]
What proportion of the company lifecycle is represented by growth stage 3? 20% Research suggests 20%.[32]
What proportion of the company lifecycle is represented by growth stage 4? 40% Research suggests 40%.[32]
Growth stage 2
Cost of goods sold as a proportion of revenue (%) 79% Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 2)[33], and the margin for its peers is 79%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
Operating expenses as a proportion of revenue (%) 15% Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 2)[33], and the margin for its peers is 15%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
Tax rate (%) 11% Research suggests that it's best to use a similar rate as the one used by peers that are in the same growth stage (i.e. growth stage 2)[33], and the rate for its peers is 11%.
Depreciation and amortisation as a proportion of revenue (%) 7% Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 2)[33], and the margin for its peers is 7%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
Fixed capital as a proportion of revenue (%) 10% Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 2)[33], and the amount for its peers is 10%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
Working capital as a proportion of revenue (%) 15% Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 2)[33], and the amount for its peers is 15%.
Net borrowing ($000) Zero Stockhub suggests that for simplicity, the net borrowing figure is zero.
Interest amount ($000) Zero Stockhub suggests that for simplicity, the interest amount figure is zero.
Growth stage 3
Cost of goods sold as a proportion of revenue (%) 62% Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 3)[33], and the margin for its peers is 62%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
Operating expenses as a proportion of revenue (%) 13% Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 3)[33], and the margin for its peers is 13%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
Tax rate (%) 14% Research suggests that it's best to use a similar rate as the one used by peers that are in the same growth stage (i.e. growth stage 3)[33], and the rate for its peers is 14%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
Depreciation and amortisation as a proportion of revenue (%) 4% Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 3)[33], and the amount for its peers is 4%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
Fixed capital as a proportion of revenue (%) 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)[33], and the amount for its peers is 3%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
Working capital as a proportion of revenue (%) 10% Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)[33], and the amount for its peers is 10%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
Net borrowing ($000) Zero Stockhub suggests that for simplicity, the net borrowing figure is zero.
Interest amount ($000) Zero Stockhub suggests that for simplicity, the interest amount figure is zero.
Growth stage 4
Cost of goods sold as a proportion of revenue (%) 99% Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 4)[33], and the margin for its peers is 99%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
Operating expenses as a proportion of revenue (%) 15% Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 4)[33], and the margin for its peers is 15%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
Tax rate (%) 0% Research suggests that it's best to use a similar rate as the one used by peers that are in the same growth stage (i.e. growth stage 4)[33], and the rate for its peers is 0%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
Depreciation and amortisation as a proportion of revenue (%) 37% Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)[33], and the amount for its peers is 37%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
Fixed capital as a proportion of revenue (%) 1% Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)[33], and the amount for its peers is 1%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
Working capital as a proportion of revenue (%) 10% Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)[33], and the amount for its peers is 10%. Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
Net borrowing ($000) Zero Stockhub suggests that for simplicity, the net borrowing figure is zero.
Interest amount ($000) Zero Stockhub suggests that for simplicity, the interest amount figure is zero.

Risks

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

Risks related to the ability to grow the business

  • Tesla may be impacted by macroeconomic conditions resulting from the global COVID-19 pandemic.
  • Tesla may experience delays in launching and ramping the production of its products and features, or Tesla may be unable to control its manufacturing costs.
  • Tesla may be unable to grow its global product sales, delivery and installation capabilities and its servicing and vehicle charging networks, or Tesla may be unable to accurately project and effectively manage its growth.
  • Tesla's future growth and success is dependent upon consumers’ demand for electric vehicles and specifically its vehicles in an automotive industry that is generally competitive, cyclical and volatile.
  • Tesla's suppliers may fail to deliver components according to schedules, prices, quality and volumes that are acceptable to us, or Tesla may be unable to manage these components effectively.
  • Tesla may be unable to meet its projected construction timelines, costs and production ramps at new factories, or Tesla may experience difficulties in generating and maintaining demand for products manufactured there.
  • Tesla will need to maintain and significantly grow its access to battery cells, including through the development and manufacture of its own cells, and control its related costs.
  • Tesla faces strong competition for its products and services from a growing list of established and new competitors.

Risks related to the company's operations

  • Tesla may experience issues with lithium-ion cells or other components manufactured at Gigafactory Nevada and Gigafactory Shanghai, which may harm the production and profitability of its vehicle and energy storage products.
  • Tesla faces risks associated with maintaining and expanding its international operations, including unfavourable and uncertain regulatory, political, economic, tax and labour conditions.
  • Tesla's business may suffer if its products or features contain defects, fail to perform as expected or take longer than expected to become fully functional.
  • Tesla may be required to defend or insure against product liability claims.
  • Tesla will need to maintain public credibility and confidence in its long-term business prospects in order to succeed.
  • Tesla may be unable to effectively grow, or manage the compliance, residual value, financing and credit risks related to, its various financing programs.
  • Tesla must manage ongoing obligations under its agreement with the Research Foundation for the State University of New York relating to its Gigafactory New York.
  • If Tesla is unable to attract, hire and retain key employees and qualified personnel, its ability to compete may be harmed.
  • Tesla is highly dependent on the services of Elon Musk, its Chief Executive Officer.
  • Tesla's information technology systems or data, or those of its service providers or customers or users could be subject to cyber-attacks or other security incidents, which could result in data breaches, intellectual property theft, claims, litigation, regulatory investigations, significant liability, reputational damage and other adverse consequences.
  • Any unauthorized control or manipulation of Tesla's products’ systems could result in loss of confidence in it and its products.
  • Tesla's business may be adversely affected by any disruptions caused by union activities.
  • Tesla may choose to or be compelled to undertake product recalls or take other similar actions.
  • Tesla's current and future warranty reserves may be insufficient to cover future warranty claims.
  • Tesla's insurance coverage strategy may not be adequate to protect it from all business risks.
  • Tesla's debt agreements contain covenant restrictions that may limit its ability to operate its business.
  • Additional funds may not be available to Tesla when it needs or want them.
  • Tesla may be negatively impacted by any early obsolescence of its manufacturing equipment.
  • Tesla holds and may acquire digital assets that may be subject to volatile market prices, impairment and unique risks of loss.
  • There is no guarantee that Tesla will have sufficient cash flow from its business to pay its indebtedness or that it will not incur additional indebtedness.
  • Tesla is exposed to fluctuations in currency exchange rates.
  • Tesla may need to defend itself against intellectual property infringement claims, which may be time-consuming and expensive.
  • Increased scrutiny and changing expectations from stakeholders with respect to the company's ESG practices may result in additional costs or risks.
  • Tesla's operations could be adversely affected by events outside of its control, such as natural disasters, wars or health epidemics.

Risks related to government laws and regulations

  • Demand for Tesla's products and services may be impacted by the status of government and economic incentives supporting the development and adoption of such products.
  • Tesla is subject to evolving laws and regulations that could impose substantial costs, legal prohibitions or unfavourable changes upon its operations or products.
  • Any failure by Tesla to comply with a variety of United States and international privacy and consumer protection laws may harm the company.
  • Tesla could be subject to liability, penalties and other restrictive sanctions and adverse consequences arising out of certain governmental investigations and proceedings.
  • Tesla may face regulatory challenges to or limitations on its ability to sell vehicles directly.

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

  • The trading price of Tesla's common stock is likely to continue to be volatile.
  • Tesla's financial results may vary significantly from period to period due to fluctuations in its operating costs and other factors.
  • Tesla may fail to meet its publicly announced guidance or other expectations about its business, which could cause its stock price to decline.
  • Transactions relating to Tesla's convertible senior notes may dilute the ownership interest of existing stockholders, or may otherwise depress the price of its common stock.
  • If Elon Musk were forced to sell shares of Tesla's common stock that he has pledged to secure certain personal loan obligations, such sales could cause its stock price to decline.
  • Anti-takeover provisions contained in Tesla's governing documents, applicable laws and its convertible senior notes could impair a takeover attempt.

Valuation

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 negative 24%. In other words, an £1,000 investment in the company is expected to return £760 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 negative 24%), then an investment in the company is considered to be an 'unsuitable' one.

What are the assumptions used to estimate the return?

Key inputs
Description Value Commentary
Which valuation model do you want to use? Discounted cash flow There are two main approaches to estimate the value of an investment:
  1. By calculating the present value of the investment's expected future cash flows (i.e. discounted cash flow valuation); and
  2. 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[34], 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, Stockhub suggests using the free cash flow valuation method (rather than the dividend discount model).

Which financial forecasts to use? 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.
Growth stage 2
Discount rate (%) 15% 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 is 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 (%) 90% Research suggests that a suitable rate for a company in this growth stage (i.e. stage 2) is 90%.
Growth stage 3
Discount rate (%) 10% 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 is 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 (%) 100% Research suggests that a suitable rate for a company in this growth stage (i.e. stage 3) is 100%.
Growth stage 4
Discount rate (%) 10% 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 is 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 (%) 100% Research suggests that a suitable rate for a company in this growth stage (i.e. stage 4) is 100%.
Other key inputs
What's the current value of the company? $950.54 billion As at 5th June 2022, the current value of the Tesla company is $950.54 billion.
Which time period do you want to use to estimate the expected return? Between now and five years time Research suggests that following a market crash, the average amount of time it takes for the price of a stock market to return to its pre-crash level (i.e. the recovery period) is at least three years.[35] Accordingly, 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.

Sensitive analysis

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):

  1. The size of the total addressable market (the default size is $3.0 trillion);
  2. Tesla peak market share (the default share is 10%); and
  3. The discount rate (the default time-weighted average rate is 10%).

The impact of a 50% change in those main inputs to the expected return of the Tesla investment is shown in the table below.

Tesla investment expected return sensitive analysis
Main input 50% worse Unchanged 50% better
The size of the total addressable market N/A (24%) N/A
Tesla peak market share N/A (24%) N/A
The discount rate N/A (24%) N/A

Appendix

Competition

Automotive

Model S competition comparison
Category Model S[11] Porsche Taycan[11]
Is the vehicle fully electric? Yes Yes
What's the top acceleration of the vehicle? 3.1 seconds 5.1 seconds
What's the maximum distance range of the vehicle on a single battery charge? 405 miles 200 miles
What's the top speed of the vehicle? 155 miles per hour 143 miles per hour
Which design type is the vehicle? Sedan (i.e. car) Sedan (i.e. car)
What is the safety rating of the vehicle? 5 out of 5 stars 5 out of 5 stars
How many seats does the vehicle have? 5 seats 4 seats
What's the cargo capacity of the vehicle? 28 cubic feet 17.2 cubic feet
Which drive wheel does the vehicle have? All-wheel drive Rear-wheel drive
What's the price of the vehicle? $99,990 $86,700
What's the vehicle's price per cargo capacity? $3,571 per cubic feet $5,041 per cubic feet
What's the vehicle's price per seat? $19,998 per seat $21,675 per seat
Model 3 competition comparison
Category Model 3[36] Mustang Mach-E[37]
Is the vehicle fully electric? Yes Yes
What's the top acceleration of the vehicle? 5.8 seconds 5.2 seconds
What's the maximum distance range of the vehicle on a single battery charge? 272 miles 247 miles
What's the top speed of the vehicle? 140 miles per hour 124 miles per hour
Which design type is the vehicle? Sedan (i.e. car) SUV (i.e. car)
What is the safety rating of the vehicle? 5 out of 5 stars 5 out of 5 stars
How many seats does the vehicle have? 5 seats 5 seats
What's the cargo capacity of the vehicle? 23 cubic feet 59.7 cubic feet
Which drive wheel does the vehicle have? Rear-wheel drive Rear-wheel drive
What's the price of the vehicle? $46,990 $43,895
What's the vehicle's price per cargo capacity? $2,043 per cubic feet $735 per cubic feet
What's the vehicle's price per seat? $9,398 per seat $8,779 per seat
Model X competition comparison
Category Model X[12] Audi e-tron[38]
Is the vehicle fully electric? Yes Yes
What's the top acceleration of the vehicle? 3.8 seconds 5.5 seconds
What's the maximum distance range of the vehicle on a single battery charge? 348 miles 222 miles
What's the top speed of the vehicle? 155 miles per hour 124 miles per hour
Which design type is the vehicle? SUV (i.e. car) SUV (i.e. car)
What is the safety rating of the vehicle? 5 out of 5 stars 5 out of 5 stars
How many seats does the vehicle have? 7 seats 5 seats
What's the cargo capacity of the vehicle? 88 cubic feet 56 cubic feet
Which drive wheel does the vehicle have? All-wheel drive All-wheel drive
What's the price of the vehicle? $114,990 $65,900
What's the vehicle's price per cargo capacity? $1,307 per cubic feet $1,168 per cubic feet
What's the vehicle's price per seat? $16,427 per seat $13,180 per seat
Model Y competition comparison
Category Model Y[12] Volkswagen ID.4
Is the vehicle fully electric? Yes Yes
What's the top acceleration of the vehicle? 4.8 seconds 8.5 seconds
What's the maximum distance range of the vehicle on a single battery charge? 330 miles 275 miles
What's the top speed of the vehicle? 135 miles per hour 100 miles per hour
Which design type is the vehicle? SUV (i.e. car) SUV (i.e. car)
What is the safety rating of the vehicle? 5 out of 5 stars 5 out of 5 stars
How many seats does the vehicle have? 7 seats 5 seats
What's the cargo capacity of the vehicle? 76 cubic feet 55.6 cubic feet
Which drive wheel does the vehicle have? All-wheel drive Rear-wheel drive
What's the price of the vehicle? $62,990 $41,230
What's the vehicle's price per cargo capacity? $829 per cubic feet $742 per cubic feat
What's the vehicle's price per seat? $8,999 per seat $8,248 per seat

Energy generation and storage

All Tesla energy storage competition comparison
Powerwall Megapack
Is the source of energy solar? Yes Yes
Is it designed for houses (i.e. smaller electricity demand)? Yes No
Is it designed for commercial buildings (i.e. greater electricity demand)? No Yes
What's the energy capacity of the product? 13.5 kilowatt hour 3.5 megawatt hour
What’s the power of the product? 5 kilowatts 1.54 megawatts
How long does it take to charge the battery if there’s sufficient solar energy? 2.7 hours 2.3 hours
What's the price of the product? $10,500 $1,000,000
What's the price per energy capacity? $593 per kilowatt hour $286 per kilowatt hour

Note: 1 megawatt is equivalent to 1,000 kilowatts.

Powerwall competition comparison
What's the name of the product? Powerwall LG Chem SonnenCore
Is the source of energy solar? Yes Yes Yes
What's the energy capacity of the product? 13.5 kilowatt hour 9.3 kilowatt hour 10 kilowatt hour
What's the price of the product? $10,500 $7,000 $9,500
What's the price per energy capacity? $593 per kilowatt hour $753 per kilowatt hour $950 per kilowatt hour
Solar Roof competition comparison
Solar Roof Traditional roof tile Other solar-energy generation roof tile
Does it generate electricity? Yes No Yes
Is it aesthetically beautiful? Yes Yes No

Financial statements

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) $331 -$5,399 -$6,083 -$5,318
Retained Earnings -- -- -- --
Treasury Stock ($million) $29,803 $27,260 $12,736 $10,249
Other Equity ($million) $54 $363 -$36 -$8
Total Equity ($million) $30,189 $22,225 $6,618 $4,923
Total Liabilities & Equity ($million) $62,131 $52,148 $34,309 $29,740
Cash flow
Year end date 31/12/2021 31/12/2020 31/12/2019 31/12/2018
Net Income ($million) $5,519 $721 -$862 -$976
Cash Flows-Operating Activities
Depreciation ($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) -$130 -$652 -$367 -$497
Changes in Inventories ($million) -$1,709 -$422 -$429 -$1,023
Other Operating Activities ($million) -$3,676 -$1,667 -$937 -$504
Liabilities ($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) -$6,514 -$3,232 -$1,432 -$2,319
Investments ($million) -$132 -- -- --
Other Investing Activities ($million) -$1,222 $100 -$4 -$18
Net Cash Flows-Investing ($million) -$7,868 -$3,132 -$1,436 -$2,337
Cash Flows-Financing Activities
Sale and Purchase of Stock ($million) $699 $12,675 $1,555 $727
Net Borrowings ($million) -$5,732 -$2,488 $798 $89
Other Financing Activities ($million) -- -- -- --
Net Cash Flows-Financing ($million) -$5,203 $9,973 $1,529 $574
Effect of Exchange Rate ($million) -$183 $334 $8 -$23
Net Cash Flow ($million) -$1,757 $13,118 $2,506 $312
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
Research and Development $2,593 $1,491 $1,343 $1,460
Sales, General and Admin. $4,517 $3,145 $2,646 $2,835
Non-Recurring Items -$27 -- $149 $135
Other Operating Items -- -- -- --
Operating Income $6,523 $1,994 -$69 -$388
Add'l income/expense items $191 -$92 $89 $46
Earnings Before Interest and Tax $6,714 $1,902 $20 -$342
Interest Expense $371 $748 $685 $663
Earnings Before Tax $6,343 $1,154 -$665 -$1,005
Income Tax $699 $292 $110 $58
Minority Interest -- -- -- --
Equity Earnings/Loss Unconsolidated Subsidiary -$125 -$141 -$87 $87
Net Income-Cont. Operations $5,519 $721 -$862 -$976
Net Income $5,519 $721 -$862 -$976
Net Income Applicable to Common Shareholders $5,519 $721 -$862 -$976
Financial ratios
Year end date 31/12/2021 31/12/2020 31/12/2019 31/12/2018
Liquidity Ratios
Current Ratio 138% 188% 113% 83%
Quick Ratio 108% 159% 80% 52%
Cash Ratio 90% 136% 59% 39%
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

As noted earlier in this report, 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, so that's the approach that Stockhub suggests using to determine the estimated value of the company (the valuation based on the discounted cash flow approach can be found in the valuation section of this report); nevertheless, for completeness purposes, separately, the valuation of the company is also estimated using the relative valuation approach.

What's the expected return of an investment in Tesla using the relative valuation approach?

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?

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[Note 3], 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, Inc. Apple, Inc 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)

Valuation table
Investments Industry Enterprise value/sales 1-year forward revenue growth rates (%) Growth-adjusted enterprise value/sales ratio
Apple, Inc Internet content & communication 7.27x[39] 8.20%[39] 89x
Tesla peers
Peer Three-year average COGS margin (%) Three-year average SG&A margin (%) Three-year average tax margin (%) Three-year average depreciation rate (%) Three-year average fixed capital margin (%) Three-year average change in working capital ($000) Three-year average growth stage Discount rate
Rivian Automotive, Inc. 945% 6827% 0% 358% 3262% 7,569,000 1 NA
Tesla, Inc. 79% 15% 11% 7% 10% 3,121,828 2 14.96%
Apple, Inc 62% 13% 14% 4% 3% -18,780,000 3 9.91%
Workhorse Group 938% -6077% 0% 58% 411% -2,978 4 18.75%
Cenntro Electric Group Limited 90% 209% 0% 37% 0% 138,382 4 10.44%
Liaoning SG Automotive Group Co 99% 15% 18% 8% 1% 154,153 4 6.39%
Growth stage
Growth stage Three-year average COGS margin (%) Three-year average SG&A margin (%) Three-year average tax margin (%) Three-year average depreciation rate (%) Three-year average fixed capital margin (%) Three-year average change in working capital ($000) Discount rate
One 945% 6827% 0% 358% 3262% 7,569,000 NA
Two 79% 15% 11% 7% 10% 3,121,828 14.96%
Three 62% 13% 14% 4% 3% -18,780,000 9.91%
Four 99% 15% 0% 37% 1% 138,382 10.44%

Apple Inc.

Cost of equity (%)
Input Input value Additional information
Risk-free rate (%) 3.44% Here, the risk free rate is the US 30 year treasury bond, and is calculated as at 15th September 2022.
Beta 1.23 The asset’s beta measures its market or systematic risk, which in theory is the sensitivity of its returns to the returns on the “market portfolio” of risky assets. Concretely, beta equals the covariance of returns with the returns on the market portfolio divided by the market portfolio’s variance of returns. In typical practice for equity valuation, the market portfolio is represented by a broad value-weighted equity market index. The asset’s beta is estimated by a least squares regression of the asset’s returns on the index’s returns.

In the typical case in which the equity risk premium is based on a national equity market index and estimated beta is based on sensitivity to that index, the assumption is being made implicitly that equity prices are largely determined by local investors. When equities markets are segmented in that sense (i.e., local market prices are largely determined by local investors rather than by investors worldwide), two issues with the same risk characteristics can have different required returns if they trade in different markets.

The opposite assumption is that all investors worldwide participate equally in set- ting prices (perfectly integrated markets). That assumption results in the international CAPM (or world CAPM) in which the risk premium is relative to a world market portfolio. In practice, the international CAPM is not commonly relied on for required return on equity estimation.

For estimating the required return on the equity using the Capital Asset Pricing Model, in terms of time period, and frequency of observations, the most common choice is five years of monthly data, yielding 60 observations. One study of U.S. stocks found support for five years of monthly data over alternatives. An argument can be made that the 2 years, weekly data can be especially appropriate in fast growing markets.

The beta value in a future period has been found to be on average closer to the mean value of 1.0, the beta of an average-systematic-risk security, than to the value of the raw beta. Because valuation is forward looking, it is logical to adjust the raw beta so it more accurately predicts a future beta.

The figure here is taken from Yahoo Finance (https://uk.finance.yahoo.com/quote/AAPL?p=AAPL&.tsrc=fin-srch), on 16th September 2022.

Equity risk premium (%) 5.26 The equity risk premium is the incremental return (premium) that investors require for holding equities rather than a risk-free asset (e.g., government bills or government bonds). Thus, it is the difference between the required return on equities and a specified expected risk-free rate of return. The equity risk premium, like the required return, depends strictly on expectations for the future because the investor’s returns depend only on the investment’s future cash flows.

Note: the definition of risk-free asset used in estimating the equity risk premium should correspond to the one used in specifying the current expected risk-free return.

Typically, analysts estimate the equity risk premium for the national equity market of the issues being analyzed (but if a global CAPM is being used, a world equity premium is estimated that takes into account the totality of equity markets).

Historical estimates

A historical equity risk premium estimate is usually calculated as the mean value of the differences between broad-based equity-market-index returns and government debt returns over some selected sample period. When reliable long-term records of equity returns are available, historical estimates have been a familiar and popular choice of estimation. If investors do not make systematic errors in forming expectations, then, over the long term, average returns should be an unbiased estimate of what investors expected. The fact that historical estimates are based on data also gives them an objective quality.

In using a historical estimate to represent the equity risk premium going forward, the analyst is assuming that returns are stationary—that is, the parameters that describe the return-generating process are constant over the past and into the future.

Forward-looking estimates

Because the equity risk premium is based only on expectations for economic and financial variables from the present going forward, it is logical to estimate the premium directly based on current information and expectations concerning such variables. Such estimates are often called forward-looking or ex ante estimates. In principle, such estimates may agree with, be higher, or be lower than historical equity risk premium estimates. Ex ante estimates are likely to be less subject to an issue such as non-stationarity or data biases than historical estimates. However, such estimates are often subject to other potential errors related to financial and economic models and potential behavioural biases in forecasting.

Here, the equity risk premium is in relation to the global region, and is calculated as at 1st January 2022 (https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/ctryprem.html).

Cost of equity (%) 9.91% Cost of equity = Risk-free rate + Beta x Equity risk premium.
Key financials
Description Value Commentary
Cost of goods sold as a proportion of revenue (%) 62% Stockhub suggests that to account for one-off events, it's best to take the three-year average (median) amount.
Operating expenses as a proportion of revenue (%) 13% Stockhub suggests that to account for one-off events, it's best to take the three-year average (median) amount.
Tax rate (%) 14% Stockhub suggests that to account for one-off events, it's best to take the three-year average (median) amount.
Depreciation and amortisation as a proportion of revenue (%) 4% Stockhub suggests that to account for one-off events, it's best to take the three-year average (median) amount.
Fixed capital as a proportion of revenue (%) 3% Stockhub suggests that to account for one-off events, it's best to take the three-year average (median) amount.
Working capital as a proportion of revenue (%) 2% Stockhub suggests that to account for one-off events, it's best to take the three-year average (median) amount.
Net borrowing ($000) $62,080,000 Stockhub suggests that to account for one-off events, it's best to take the three-year average (median) amount.
Interest amount ($000) $2,645,000 Stockhub suggests that to account for one-off events, it's best to take the three-year average (median) amount.

Cenntro Electric Group Limited

Cost of equity
Input Input value Additional information
Risk-free rate (%) 3.44 Here, the risk free rate is the US 30 year treasury bond, and is calculated as at 15th September 2022.
Beta 1.33 The figure here is taken from the Financial Times (https://markets.ft.com/data/equities/tearsheet/profile?s=CENN:NAQ), on 16th September 2022.
Equity risk premium (%) 5.26 Here, the equity risk premium is in relation to the global region, and is calculated as at 1st January 2022 (https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/ctryprem.html).
Cost of equity (%) 10.44 Cost of equity = Risk-free rate + Beta x Equity risk premium.
Key financials
Description Value Commentary
Cost of goods sold as a proportion of revenue (%) 90% Stockhub suggests that to account for one-off events, it's best to take the three-year average (median) amount.
Operating expenses as a proportion of revenue (%) 209% Stockhub suggests that to account for one-off events, it's best to take the three-year average (median) amount.
Tax rate (%) 0% Stockhub suggests that to account for one-off events, it's best to take the three-year average (median) amount.
Depreciation and amortisation as a proportion of revenue (%) 37% Stockhub suggests that to account for one-off events, it's best to take the three-year average (median) amount.
Fixed capital as a proportion of revenue (%) 0% Stockhub suggests that to account for one-off events, it's best to take the three-year average (median) amount.
Working capital as a proportion of revenue (%) 65% Stockhub suggests that to account for one-off events, it's best to take the three-year average (median) amount.
Net borrowing ($000) $11,000 Stockhub suggests that to account for one-off events, it's best to take the three-year average (median) amount.
Interest amount ($000) $1,070 Stockhub suggests that to account for one-off events, it's best to take the three-year average (median) amount.

Economic links to cash flow patterns

Economic links to cash flow patterns
Cash flow type Introduction Growth Shake out Mature Decline
Operating - + +/- + -
Investing - - +/- - +
Financing + + +/- - +/-

Timeline of production and sales

In 2020, Tesla ranked as the world's best-selling plug-in and battery electric passenger car manufacturer, with a market share of 16% of the plug-in segment and 23% of the battery electric segment 2020 sales.[40] Tesla reported 2021 vehicle deliveries of 936,222 units, up 87% from 2020.[20] At the end of 2021, Tesla's global sales since 2012 totalled 2.3 million units.[41]

Quarter Cumulative
production		 Total
production		 Model S
sales		 Model X
sales		 Model 3
sales 		Model Y
sales		 Total
sales		 In transit Source
Q3 2012 N/A 350 250+ 250+ [42]
Q4 2012 N/A 2,750+ 2,400 2,400 [43]
Q1 2013 N/A 5,000+ 4,900 4,900 [44]
Q2 2013 N/A N/A 5,150 5,150 [45]
Q3 2013 N/A N/A 5,500+ 5,500+ [46]
Q4 2013 ~34,851 6,587 6,892 6,892 [47]
Q1 2014 ~41,438 7,535 6,457 6,457 [48]
Q2 2014 ~48,973 8,763 7,579 7,579 [49]
Q3 2014 ~57,736 ~7,075 7,785 7,785 [50]
Q4 2014 64,811 11,627 9,834 9,834 [51]
Q1 2015 76,438 11,160 10,045 10,045 [52]
Q2 2015 89,245 12,807 11,532 11,532 [53]
Q3 2015 102,336 13,091 11,597 6 11,603 [54]
Q4 2015 116,373 14,037 17,272 206 17,478 [55]
Q1 2016 131,883 15,510 12,420 2,400 14,820 2,615 [56]
Q2 2016 150,228 18,345 9,764 4,638 14,402 5,150 [57][58]
Q3 2016 175,413 25,185 16,047 8,774 24,821 5,065 [59]
Q4 2016 200,295 24,882 12,700 9,500 22,254 6,450 [60][61]
Q1 2017 225,713 25,418 ~13,450 ~11,550 25,051 ~4,650 [62]
Q2 2017 251,421 25,708 ~12,000 ~10,000 22,026 ~3,500 [63][64]
Q3 2017 276,757 25,336 14,065 11,865 222 26,137 4,820 [65][66]
Q4 2017 301,322 24,565 ~15,200 ~13,120 1,542 29,967 3,380 [67][68][69]
Q1 2018 335,816 34,494 11,730 10,070 8,182 29,997 6,100 [70]
Q2 2018 389,155 53,339 10,930 11,370 18,440 40,740 15,058 [71][72]
Q3 2018 469,297 80,142 14,470 13,190 56,065 83,725 11,824 [73][74]
Q4 2018 555,852 86,555 13,500 14,050 63,359 90,700 2,907 [75][76]
Q1 2019 632,952 77,100 12,100 50,900 63,000 10,600 [77]
Q2 2019 720,000 87,048 17,650 77,550 95,200 7,400 [78][79]
Q3 2019 816,155 96,155 17,483 79,703 97,186 [80]
Q4 2019 921,046 104,891 19,475 92,620 112,095 [81]
Q1 2020 1,023,718 102,672 12,230 76,266 88,496 [81]
Q2 2020 1,105,990 82,272 10,614 80,277 90,891 [81]
Q3 2020 1,251,026 145,036 15,275 124,318 139,593 [81]
Q4 2020 1,430,783 179,757 18,966 161,701 180,667 [81]
Q1 2021 1,611,121 180,338 2,030 182,847 184,877 [82]
Q2 2021 1,817,542 206,421 1,895 199,409 201,304 [83]
Q3 2021 2,055,365 237,823 9,289 232,102 241,391 [84]
Q4 2021 2,361,205 305,840 11,766 296,884 308,650 [85]
Q1 2022 2,666,612 305,407 14,724 295,324 310,048 [86]
Q2 2022 2,925,192 258,580 16,162 238,533 254,695

Global greenhouse gas emissions by sector[87]

The 'energy use in industry' category relates to the energy used to manufacture products connected to the industry sector, such as iron and steel (7.2%), chemicals & petrochemicals (3.6%) and tobacco products and food processing (1%).

The transport category relates to the emissions generated from the 'powering' of transport activities. Note, the transport category does not include emissions from the manufacturing of motor vehicles or other transport equipment (those emissions are included in the ‘energy use in industry’ category).

According to the Global Change Data Lab charity, to reach net-zero emissions, there is no single fix; innovations across many sectors are needed[87]. For example, even if we could fully decarbonize our electricity supply, we would also need to electrify all of our heating and road transport.[87]

Global greenhouse gas emissions by sector
Processes Contributions to global greenhouse gas emissions (%) Sector
Energy use in industry 24.2% Energy
Transport 16.2% Energy
Energy use in buildings 17.5% Energy
Unallocated fuel combustion 7.8% Energy
Fugitive emissions from energy production 5.8% Energy
Energy use in agriculture and fishing 1.7% Energy
Cement 3.0% Industry
Chemicals & petrochemicals 2.2% Industry
Wastewater 1.3% Waste
Landfills 1.9% Waste
Grassland 0.1% Agriculture, Forestry and Land Use
Cropland 1.4% Agriculture, Forestry and Land Use
Deforestation 2.2% Agriculture, Forestry and Land Use
Crop burning 3.5% Agriculture, Forestry and Land Use
Rice cultivation 1.3% Agriculture, Forestry and Land Use
Agricultural soils 4.1% Agriculture, Forestry and Land Use
Livestock & manure 5.8% Agriculture, Forestry and Land Use

Notes

Bid-ask spread

The bid–ask spread is the difference between the prices quoted for an immediate sale (ask) and an immediate purchase (bid) for the investment.

For example, if the price to buy an investment is $663.90 and the price to sell the investment is $663.89, the bid-ask spread of the investment is $0.01 (i.e.$663.90 minus $663.89). Converting the figure into percentage, the bid-ask spread is 0.0015063% (i.e. $0.01 divided by $663.90).

Investment risk

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 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:-

Current ratio = Current assets divided by current liabilities

Acceptable current ratios vary from industry to industry and from business lifecycle stage.

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.

A normal liquid ratio is considered to be 1:1. A company with a quick ratio of less than 1 cannot currently fully pay back its current liabilities.

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 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 derived by adding a company's total reserves of cash and near-cash securities and dividing that sum by its total current liabilities.

The cash ratio is more conservative than other liquidity ratios because it only considers a company's most liquid resources.

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.

Power purchase agreement

A power purchase agreement (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.

Energy capacity

The energy capacity is defined as the ability of a material to absorb and store energy.

Kilowatt-hour

The kilowatt-hour (kWh) is a unit of energy equal to one kilowatt of power sustained for one hour and is commonly used as a measure of electrical energy. One kilowatt-hour is equal to 3600 kilojoules (3.6 megajoules).

Powerwall annual cost calculation

Powerwall annual cost calculation
Description Value Commentary
The cost of Powerall $10,500
The lifetime of Powewall 10 years The warrant of the product is 10 years, so have assumed that the lifetime of Powerwall is the same (i.e. 10 years).
The energy capacity of Powerwall 13.5 kilowatt hour
The average energy requirement of a household in the United States 29 kWh per day

The annual price of the product = the price of the product divided by the lifetime of the product

The annual price of the product = $10,500 / 10 years

The annual price of the product = $1,050

The number of Powerwalls that are required to power a household = the average energy requirement of a household in the United States divided by the energy capacity of Powerwall

The number of Powerwalls that are required to power a household = 29 kWh per day / 13.5 kWh

The number of Powerwalls that are required to power a household = 2.14

The cost for a household to be powered by Powerwalls only = The number of Powerwalls that are required to power a household multiplied by the annual price of the product

The cost for a household to be powered by Powerwalls only = 2.14 x $1,050

The cost for a household to be powered by Powerwalls only = $2,247

Risk rating
Rating Beta
Low Equal to or below 0.5
Medium Between 0.5 and 1.5
High Equal to or above 1.5

Actions

To invest in Tesla, click here.

To contact Tesla, click here.

References

  1. ↑ 1.0 1.1 1.2 1.3 1.4 1.5 https://uk.finance.yahoo.com/quote/TSLA/profile?p=TSLA
  2. ↑ 2.0 2.1 https://sec.report/CIK/0001318605#:~:text=Tesla%2C%20Inc.%20is%20incorporated%20in,motor%20vehicles%20%26%20passenger%20car%20bodies.
  3. ↑ 3.0 3.1 https://www.business2community.com/stocks/buy-tesla-stock
  4. ↑ 4.0 4.1 https://www.tesla.com/about
  5. ↑ 5.00 5.01 5.02 5.03 5.04 5.05 5.06 5.07 5.08 5.09 5.10 5.11 5.12 5.13 5.14 5.15 5.16 5.17 5.18 5.19 5.20 https://www.sec.gov/Archives/edgar/data/1318605/000156459021004599/tsla-10k_20201231.htm
  6. ↑ 6.0 6.1 6.2 https://www.tesla.com/en_GB/blog/secret-tesla-motors-master-plan-just-between-you-and-me
  7. ↑ https://wedocs.unep.org/bitstream/handle/20.500.11822/30797/EGR2019.pdf?sequence=1&isAllowed=y
  8. ↑ https://www.climatewatchdata.org/ghg-emissions?breakBy=sector&chartType=percentage&end_year=2018&sectors=total-including-lucf&start_year=1990
  9. ↑ https://www.wri.org/insights/4-charts-explain-greenhouse-gas-emissions-countries-and-sectors
  10. ↑ https://www.tesla.com/
  11. ↑ 11.0 11.1 11.2 11.3 11.4 https://www.tesla.com/models Cite error: Invalid <ref> tag; name ':8' defined multiple times with different content
  12. ↑ 12.0 12.1 12.2 12.3 https://www.tesla.com/modelx
  13. ↑ 13.0 13.1 13.2 https://www.tesla.com/model3
  14. ↑ 14.0 14.1 https://www.tesla.com/modely
  15. ↑ 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.
  16. ↑ https://carbuzz.com/cars/tesla/roadster
  17. ↑ https://www.eia.gov/tools/faqs/faq.php?id=97&t=3#:~:text=How%20much%20electricity%20does%20an,about%20893%20kWh%20per%20month.
  18. ↑ https://www.tesla.com/blog/master-plan-part-deux
  19. ↑ 19.0 19.1 https://www.ucl.ac.uk/bartlett/sustainable/sites/bartlett/files/an_exploration_of_energy_cost_ranges_limits_and_adjustment_process.pdf
  20. ↑ 20.0 20.1 20.2 See table "Operational Summary" pp. 7 and 8 for revised and final production and sales numbers.
  21. ↑ Source: Stockhub Limited
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  23. ↑ 23.00 23.01 23.02 23.03 23.04 23.05 23.06 23.07 23.08 23.09 23.10 23.11 23.12
  24. ↑ Source: Stockhub Limited
  25. ↑ Stadler, Enduring Success, 3–5.
  26. ↑ http://www.robertpicard.net/files/econgrowthandadvertising.pdf
  27. ↑ https://www.macrotrends.net/countries/WLD/world/gdp-growth-rate
  28. ↑ http://escml.umd.edu/Papers/ObsCPMT.pdf
  29. ↑ Levie J, Lichtenstein BB (2010) A terminal assessment of stages theory: Introducing a dynamic approach to entrepreneurship. Entrepreneurship: Theory & Practice 34(2): 317–350. https://doi.org/10.1111/j.1540-6520.2010.00377.x
  30. ↑ Stef Hinfelaar et al.:, 2019.
  31. ↑ Dickinson, 2010.
  32. ↑ 32.0 32.1 32.2 32.3 http://escml.umd.edu/Papers/ObsCPMT.pdf
  33. ↑ 33.00 33.01 33.02 33.03 33.04 33.05 33.06 33.07 33.08 33.09 33.10 33.11 33.12 33.13 33.14 33.15 33.16 33.17 http://people.stern.nyu.edu/adamodar/pdfiles/papers/younggrowth.pdf
  34. ↑ Demirakos et al., 2010; Gleason et al., 2013
  35. ↑ https://www.newyorkfed.org/mediabrary/media/medialibrary/media/research/staff_reports/research_papers/9809.pdf
  36. ↑ https://www.tesla.com/model3
  37. ↑ https://www.ford.com/suvs/mach-e/?gnav=header-electrified-vhp
  38. ↑ https://www.audiusa.com/us/web/en/models/e-tron/e-tron/2022/overview.html#2022-Audi-e-tron%C2%AE
  39. ↑ 39.0 39.1 Morningstar, Inc.
  40. ↑
  41. ↑
  42. ↑ Over 250 Model S deliveries in Q3, exceeding target upper bound
  43. ↑ Achieved 20,000 annualized production rate
  44. ↑ Record sales of $562 million, up 83% from last quarter
  45. ↑ Record Q2 Model S deliveries of 7,579 vehicles.
  46. ↑ Record 5,500 Model S deliveries
  47. ↑ Record 6,892 Model S vehicles sold and delivered in Q4
  48. ↑ Record Q1 Model S production of 7,535 vehicles.
  49. ↑ Record Q2 Model S deliveries of 7,579 vehicles.
  50. ↑ Highest ever quarterly deliveries at 7,785 vehicles, despite factory shutdown in July
  51. ↑
  52. ↑ A total of 10,045 Model S cars were delivered globaly during the first quarter of 2015.
  53. ↑ A total of 11,532 Model S cars were delivered globally during the second quarter of 2015.
  54. ↑ Tesla Motors (August 4, 2016). "Tesla Motors – Third Quarter 2015 Shareholder Letter" (PDF) (Press release). Palo Alto, California: Tesla Motors. Retrieved November 3, 2015. Tesla global electric car sales totaled 11,603 units during the third quarter of 2015, including six Tesla Model X units.
  55. ↑
  56. ↑
  57. ↑ "Tesla Second Quarter 2016 Update" (PDF) (Press release). Palo Alto: Tesla Motors. August 3, 2016. Retrieved August 3, 2016. During the second quarter of 2016 Tesla Motors delivered 14,402 new vehicles consisting of 9,764 Model S and 4,638 Model X. Production during 2Q 2016 totaled 18,345 vehicles.
  58. ↑ "Tesla Q2 2016 Vehicle Production and Deliveries" (Press release). Palo Alto: Tesla Motors. July 3, 2016. Retrieved August 3, 2016.
  59. ↑
  60. ↑
  61. ↑ Production totaled 24,882 vehicles in 4Q 2016 and vehicle deliveries totaled 22,252 units. No breakdown by model was provided.
  62. ↑ "Tesla Q1 2017 Vehicle Production and Deliveries". Tesla Motors (Press release). Palo Alto: Market Wired. April 2, 2017. Retrieved April 4, 2017. Tesla (NASDAQ: TSLA) delivered just over 25,000 vehicles in Q1, of which approx 13,450 were Model S and approx 11,550 were Model X.
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  67. ↑
  68. ↑
  69. ↑ "Tesla Fourth Quarter & Full Year 2017 Update" (PDF). Tesla (Press release). Palo Alto: Tesla. February 7, 2017. Archived from the original (PDF) on February 8, 2018. Retrieved February 7, 2018. In Q4, we delivered 28,425 Model S and Model X vehicles and 1,542 Model 3 vehicles, totaling 29,967 deliveries.
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  72. ↑ Donnelley, RR (August 1, 2018). Automotive Products. Tesla Second Quarter 2018 Update (Report). p. 2. Retrieved August 2, 2018. We produced 53,339 vehicles in Q2 and delivered 22,319 Model S and Model X vehicles and 18,449 Model 3 vehicles, totaling 40,768 deliveries.
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  76. ↑
  77. ↑ "Tesla Q1 2019 Vehicle Production & Deliveries" (Press release). Palo Alto: Tesla. April 4, 2019. Retrieved April 4, 2019.
  78. ↑ "Tesla Q2 2019 Vehicle Production & Deliveries" (Press release). Palo Alto: Tesla. July 2, 2019. Retrieved July 2, 2019.
  79. ↑ Davies, Alex (July 3, 2019). "Tesla Model 3 Can Survive a Crash—and Avoid One, Too". Wired. US. Retrieved July 9, 2019.
  80. ↑ "Q3 2019 Update" (Press release). Palo Alto: Tesla. Oct 23, 2019. Retrieved Jan 7, 2020.
  81. ↑ 81.0 81.1 81.2 81.3 81.4
  82. ↑
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  84. ↑
  85. ↑
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  87. ↑ 87.0 87.1 87.2 https://ourworldindata.org/emissions-by-sector
  1. ↑ 1.0 1.1 Cite error: Invalid <ref> tag; no text was provided for refs named Note04
  2. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named Note01
  3. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named Note15


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