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Tesla Motors
ANALYSIS for NYSE : TSLA

170

$

MARCH 31, 2015

191

$

$21.3 B MKT CAP

$24 B MKT CAP

Trefis Estimate

Market Price

See the Full Analysis for Tesla Motors on Trefis
— CORPORATE SNAPSHOT —

Tesla Motors is a Silicon Valley based automobile manufacturer focusing
solely on the design, manufacture, and sale of battery electric vehicles (BEVs)
and related technologies. In 2008, the company launched its first model, an
electric sports car called the Tesla Roadster, which at the time was the only
highway capable electric car available in the U.S. Tesla has ambitious plans
for the future, looking to shift from a niche producer of electric sports cars, to
an established volume automobile manufacturer. The company has achieved
the first stage of this transformation with the launch of the Model S in June
2012. The Model S is an electric luxury sedan priced upwards of $70,000 and
competes with established luxury sedan manufacturers such as BMW, Audi,
and Mercedes Benz. Tesla will leverage the Model S platform to launch other
vehicles beginning in 2015, the first of which is a crossover vehicle, the Model
X. In 2017, Tesla plans to introduce its third major vehicle, currently referred
to as the Gen III. The vehicle will target the mass-market electric cars and
would be priced at a base price of $35,000. Apart from manufacturing electric
cars, Tesla is also a supplier of electric power train components (batteries,
chargers, motors, power management systems) to other automobile
manufacturers such as Toyota and Daimler. Toyota is a significant customer
and strategic partner for Tesla, having invested $50 million in Tesla's IPO.
Tesla could emerge as a significant supplier of power trains as most
automobile manufacturers are looking to introduce their own electric cars.
— VALUATION HIGHLIGHTS —

1. Model S constitutes 44% of the Trefis price estimate for Tesla Motors's
stock.
2. Gen III constitutes 34% of the Trefis price estimate for Tesla Motors's
stock.
3. Model X constitutes 16% of the Trefis price estimate for Tesla Motors's
stock.

MODEL S

Revenue per Unit of Model S Sold 6
EV/HEV as % of Total Passenger
Vehicle Market 7
Model S Market Share 8
Total Passenger Vehicle Market
Size 10
Model S Gross Profit Margin 11
GEN III

Revenue per Unit of Gen III Sold 13
EV/HEV as % of Total Passenger
Vehicle Market 14
Gen III Market Share 14
Total Passenger Vehicle Market
Size 15
Gen III Gross Profit Margin 15
MODEL X
Model X 17

Model X Gross Profit Margin 18
ROADSTER

Account Payable Days 20
Accrued Liabilities as a % of
Revenues 21
Roadster Gross Profit Margin 21
ELECTRIC POWERTRAIN
SALES
Account Payable Days 23

Accrued Liabilities as a % of
Revenues 23
Powertrain Components & Sales Gross
Profit Margin 23
DEVELOPMENT SERVICES
Account Payable Days 25

Accrued Liabilities as a % of
Revenues 25
Development Services Gross Profit
Margin 25

APPENDICES

Summary P&L for Tesla Motors 29
Detailed Model S P&L 30
Detailed Gen III P&L 31
Detailed Model X P&L 32
Detailed Roadster P&L 33
Detailed Electric Powertrain Sales
P&L 34
Detailed Development Services
P&L 35

See the Interactive Valuation Breakdown on Trefis
Our share price estimate and the overall company value is derived by
summing-up the values of individual divisions/businesses in a sum-of-theparts analysis. The value of each division is calculated using a discounted cash
flow (DCF) methodology.
We forecast fundamental drivers like pricing, market share, and profit
margins for different businesses in estimating the division’s value within the
DCF framework. The analysis below primarily focuses on those important
forecasts that drive our share price and value estimate.
Our complete analysis, including sources of historical data, underlying
equations and additional discussion are available on www.trefis.com.
— POTENTIAL UPSIDE & DOWNSIDE TO TREFIS PRICE —

Our price estimate for Tesla Motors is highly sensitive to the growth of the
EV market during the course of our forecast period. We have measured the
size of the EV market as a percentage of the total passenger vehicle market,
which is expected to grow from the current level of around 88 million to
almost 129 million by the end of our forecast period. We estimate the EV
market (includes HEVs, PHEVs, and BEVs) currently makes up close to
3.1% of the total passenger vehicle market, and expect it to reach 6.8% by the
end of our forecast period. If the rate of adoption of the vehicles is lower,
with EVs making up just 6% of the total car market by the end of our forecast
period, there would be a 20% downside to our price estimate. On the other
hand, if circumstances favor a higher rate of adoption, of say almost 8% by
the end of our forecast period, there would be a 15% upside to our price
estimate.
Tesla is expected to begin delivery of the Gen III to customers in 2017.
We believe that the company will sell around 50,000 units in 2017 and ramp
up to more than 300,000 units by 2020. This equates to a market share (of
the EV market) of around 1.3% in 2017 and 9.3% in 2024.
If sales fall short of projected volumes, there could be a significant
downside to the Trefis price estimate. Assuming the market size remains
constant, if Gen III's market share manages to ramp up to only around
500,000 units by 2024 (a market share of 6%), there would be a downside of
over 10% to our price estimate. Conversely, if the cars are well received in the
market and Tesla ramps up production to 1,000,000 by the end of the

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forecast period (implying a market share of 12%), there could be an upside of
5% to our price estimate. Tesla also faces significant execution risks (delay in
launching the Model X). Many newly developed plug-in vehicles have
experienced significant delays, including the Nissan Leaf, Chevy Volt, and
Fisker Karma.
Management is targeting a long-term gross margin of more than 25% on
electric vehicles. Although we expect the bulk of Tesla's total car sales
volumes to come from the Gen III, we believe that the Model X will generate
larger cash flows due to higher margins. The Model X is expected to be
priced between $70,000-80,000. We expect gross margins for the vehicle
could be as high as 29% eventually. If the company is able to achieve 2%
higher gross margins for the vehicle, there could be a 15% upside to our price
estimate. Conversely, if margins are lower by 3 points, there would be a 10%
downside to our price estimate. The main factors impacting the gross margin
include a) retail price of the Model X, b) materials and manufacturing costs,
and c) economies of scale in production. Retail price depends on Tesla's
ability to sell high margin options and accessories to customers as well as the
percentage of international sales, which command higher retail prices.
Material and manufacturing costs depend on commodity prices such as steel,
aluminum, and battery pack costs (which are expected to decrease
significantly over the coming years). Lastly, the economies of scale Tesla is
able to achieve at its Fremont manufacturing plant is an important factor for
gross margins. The company incurred higher than projected capital
expenditures in 2010 and 2011 in order to increase automation and in-sourcing
at its Fremont plant, which should aid margins.
— SOURCES OF VALUE —

The majority of Tesla's value comes from the Model X and the Gen III,
which will both be launched in the future (2015 and 2016 respectively).
Future model launches
Tesla Motors launched the Model S, a battery electric luxury sedan, in June
2012. The Model S is Tesla's first volume car, and its success is crucial for the
company's ambitious plans of becoming America's fourth automaker. After
selling more than 22,000 units in 2013 and around 31,500 units in 2014, Tesla
is targeting sales of 55,000 Model S sedans in 2015. The company's Fremont
manufacturing facility will be equipped to produce 50,000 Model S sedans by
the end of 2014 on a single shift, so production can be doubled by operating
on two shifts should demand arise. Tesla has also revealed its third model, a
crossover SUV called the Model X. The Model X will be based on the Model
S platform and will begin deliveries in 2015. In 2017, the company plans to
introduce the Gen-III, a mass-market electric car which is expected to have a
base price of $35,000.
Total electric vehicle and plug-in hybrid market size
Tesla aims to become a mass producer of electric vehicles. In order to
achieve that, there must be a large enough market. This is especially relevant

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for the Gen-III vehicle to be launched in 2017. As mentioned above, Tesla's
value depends on its future electric vehicle sales, which, in turn, depends
upon the potential size of the market. There are various factors that could
affect the potential size of the market, such as the price of oil, fuel efficiency
improvements in its internal combustion engine cars, the cost of batteries,
recharging infrastructure, and government incentives. In China, the
government is investing heavily in setting up a recharging infrastructure.
China is already the world's largest automobile market, and it is growing at a
much faster pace than the U.S. It is inevitable then that China will also be
the largest market for plug-in vehicles. As Tesla expands internationally,
China could be an important source of sales for Tesla, especially with the
launch of the Gen-III later in the decade. Tesla has one showroom planned
for China over the next couple of years.
— KEY TRENDS —

Falling battery costs to speed up adoption of electric cars
When the Tesla Roadster 1.0 was introduced in 2008, the battery cost was
estimated at ~$36,000 for a 53kWh capacity, equivalent to $680 per kWh.
This declined to ~$472 per kWh for the Roadster 2.5 introduced in 2010.
Battery costs are expected to fall by over 60% per kilowatt hour by 2025.
Battery costs are expected to come down as technology improves and the
manufacturing process achieves economies of scale. There are significant
R&D expenses being poured into different battery technologies and it may be
possible that an entirely new battery technology may be necessary for electric
cars to become mainstream.
Tesla is employing a different form factor for its batteries compared to the rest of
the automobile industry
Tesla has been using the cylindrical cell form factor, which is primarily used
in consumer electronics (such as laptops), while the rest of the major auto
manufacturers are using the prismatic (or flat) form factor. The rapid
development in the consumer electronics industry over the past few years has
helped reduce the per kWh cost for cylindrical form batteries, giving it a
significant cost advantage. Tesla provides a number of battery pack options
for the Model S, and offers far better range than competing electric vehicles.
The company is a pioneer in adapting cylindrical form batteries for
automotive use, as evidenced by the success of the Roadster since its launch
in 2008. Furthermore, other automakers, such as Daimler and Toyota, have
recognized Tesla's strength and are sourcing power train/battery components
from Tesla. However, the prismatic form factor chosen by other automakers
has its advantages. It is less complex (fewer cells per pack), and less
susceptible to heating issues. Furthermore, the cost differential between the
prismatic and cylindrical cell form will narrow over time. The evolution of
battery technology, and Tesla's ability to remain the leader, will be a key
trend to watch out for.
The electric car space is getting increasingly competitive with both established

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manufacturers and start-ups set to introduce new models
General Motors and Nissan introduced their mass-market electric vehicles in
2011 with the Chevy Volt and Nissan Leaf. The Volt is a plug-in hybrid
(PHEV), providing a limited range on battery (~40 miles), after which a
small internal combustion engine takes over. The Leaf, on the other hand, is
a battery electric vehicle (BEV), with a range of ~100 miles. GM's approach
allays 'range anxiety' in the consumer's mind, while Nissan's approach is less
complex and possibly more cost effective. Toyota has introduced a plug-in
Prius in 2012, and is developing an all-electric RAV4 mini SUV (in alliance
with Tesla), while BMW also debuted the i3 in 2013. BYD, the Chinese
manufacturer of plug-in hybrids, has ambitious plans for expansion in the US
and Europe.
Government incentives for electric vehicle industry
In order to reduce dependence on oil, governments across the world are
providing incentives to both consumers and manufacturers for the adoption
of electric cars. In the US, for example, the federal government gives tax
credits of up to $7,500 for the purchase of "advanced technology vehicles"
(this includes EVs). This tax credit may be increased to $10,000. There are
several other regulations, such as corporate average fuel economy (CAFE)
regulations, the Zero Emission Vehicle program (ZEV), and subsidized loans
for battery research and the manufacture of electric cars that can accelerate
the pace of adoption. Government impetus in setting up infrastructure will be
crucial for the growth of the electric vehicle industry.
Changes in consumer behavior
Consumer behavior patterns are an important trend for electric car
manufacturers. As oil prices rise and battery prices fall, it may become more
attractive for consumers to purchase electric vehicles. Once there is a clear
economic rationale to purchase electric vehicles, there could be a surge in
demand. Other factors affecting consumer behavior will be the maintenance
costs for electric cars vis-a-vis internal combustion engine cars, and the resale value of electric cars. Both of these factors are still unknown since mass
market electric cars are only just being introduced.
See the Full Analysis for Tesla Motors on Trefis

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Model S
The Model S division constitutes 44.2% of our $170 price estimate for this stock, based on our sum of the parts analysis.
The most important drivers for the Model S business are:
• Revenue per Unit of Model S Sold
• EV/HEV as % of Total Passenger Vehicle Market
• Model S Market Share
• Total Passenger Vehicle Market Size
• Model S Gross Profit Margin
— REVENUE PER UNIT OF MODEL S SOLD —

This represents the revenue Tesla receives for each unit of Model S sold. This includes the revenues generated due to the
sale of ZEV credits earned by Tesla.

Revenue per Unit of Model S Sold ($ K)

100
75
50
25
0
2011 1 2

13

14

15

16

17

18

19

20

21

22

Tesla's Model S is priced in the range of $70,000-100,000 although the inclusion of options such as 'High Power Home
Charging' and 'Parking Sensors' could raise the price even further. Additionally, the company also earns significant
revenues from the sale of ZEV (Zero Emission Vehicle) sales. In 2013, the figure stood at $129.8 million. Tesla also
generates additional sales from after sale services. Due to revenues generated from these additional sources, there is a
substantial difference in the retail price of a Model S and the average revenue generated from the sale of the car. In 2012,
Tesla earned more than $115,000 from the sale of a Model S. This figure declined to about 107,000, as a greater proportion
of lower priced options reduced the overall average revenue earned per unit.In 2014, the figure declined to around $97,000
as the proportion of signature vehicles among total vehicles sold declined. Going forward, we expect the figure to rise
gradually.
Forecast Rationale

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Supporting:
1. TESLA HANDLES SALES AND MARKETING OF ITS VEHICLES IN-HOUSE – Tesla has set up a number of retail outlets in
the US and abroad, and plans to handle sales and marketing of all its vehicles in-house. As a result, it does not have
any payment obligations towards third party dealers.
2. ZEV CREDITS – As per the laws of a number of states in the US, alternative fuel vehicle manufacturers, such as Tesla,
receive ZEV (Zero Emission Vehicle) credits for each vehicle sold. Tesla then sells excess credits to other auto
manufacturers, that purchase the credits to meet regulatory requirements. Tesla has entered into such agreements
with three auto manufacturers. We have taken into account the revenues Tesla receives from the sale of these credits
into our forecasts for revenue per vehicle sold.
3. LEASING ARRANGEMENT – Most companies which lease vehicles can only recognize the profits from the sale of leased
vehicles in a deferred account. However, Tesla has an arrangement with U.S. Bank which will allow them to record
the revenue from vehicle sales in their net sales, thus boosting the average revenue per vehicle sold.
Mitigating:
4. POSSIBILITY OF DISTRIBUTING VEHICLES THROUGH THIRD PARTY DEALERS IN THE FUTURE – As mentioned above,
Tesla currently handles all sales and marketing activities of its vehicles in-house. However, there is a possibility that
once Tesla reaches higher volumes, it may not be able to sustain this retail strategy. A portion of its vehicles may be
distributed through third party dealers, thereby leading to dealer margins which would lower revenues per vehicle
sold.
Sources for historical data and explanations can be found on the Trefis.com website (link)
— EV/HEV AS % OF TOTAL PASSENGER VEHICLE MARKET —

This represents the size of the EV market, which includes HEVs (Hybrid Electric Vehicles), PHEVs (Plug-in Hybrid
Electric Vehicles) and BEVs (Battery Electric Vehicles), expressed as a percentage of the total passenger car market. All of
Tesla's vehicles are BEVs.

EV/HEV as % of Total Passenger Vehicle Market (%)

6
5
4
3
2
1
0
2011 1 2

13

14

TREFIS ANALYSIS for TESLA MOTORS

15

16

17

18

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20

21

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The EV market comprised of about 2.0% of the total passenger vehicle market in 2013. This equates to a market size of
around 1.66 million units. In 2014, the market share of EVs/HEVs grew to just over 3%.
In the relatively short history of electric vehicles, HEVs have dominated the market, led by the Toyota Prius. HEVs
currently make up almost 88% of the EV market.
We expect the EV market to reach close to 6.4% of the total passenger car market by the end of our forecast period.
The BEV segment of this market is expected to grow at a far higher rate than HEVs and PHEVs and by the end of our
forecast period, BEVs will make up almost 50% of the total EV market.
Forecast Rationale
Supporting:
1. GOVERNMENT PROVIDING INCENTIVES FOR ALTERNATIVE FUEL VEHICLES MANUFACTURERS AND BUYERS –
Governments are pushing for mass scale adoption of alternative fuel vehicles worldwide in order to reduce the
dependency of their respective nations on oil and to reduce emissions. In the US, Obama recently proposed new
incentives to support the growth of the industry.
2. LOWER COST OF OWNERSHIP – Buyers of electric vehicles stand to make a number of cost savings on vehicle
registration and other sales taxes because a number of Governments around the world are trying to incentivize
consumers to patronize green technology. Electricity is cheaper as a fuel than gas or oil. Therefore, users of electric
vehicles realize cost savings over the life of their cars compared to owners of vehicles running on Internal Combustion
Engines. Owners of EVs get many privileges such as access to high-occupancy vehicle lanes, free parking, and
separate driving lanes in many countries, making their commutes shorter. These privileges also result in net savings
for EV owners. Additionally, owning an EV eliminates trips to the gas station and results in lower rates of
depreciation and hence lower spend on servicing.
3. R&D IMPROVING VIABILITY OF EVS – EVs have until now faced two major issues, namely limited range and high price
(due to high battery costs). These issues are being resolved through technological improvements. Companies like
Tesla are already offering cars with impressive range (300 miles for its 85 kWh battery pack option), and battery costs
are expected to drop by one-third by 2017, with further price drops expected thereafter.
4. VEHICLE AVAILABILITY – A large number of car manufacturers have entered, or are planning to enter, the EV market,
including reputed names such as BMW, Mercedes Benz, and Audi. The availability of a wide range of options will
provide an incentive for buyers to purchase these vehicles.
Mitigating:
5. LACK OF ADEQUATE CHARGING INFRASTRUCTURE – Although technology has led to faster charging rates for EVs, long
distance commuters may have to charge their vehicles multiple times. This would require a charging infrastructure
across the nation, similar to the widespread access to fuel stations. Governments in the US and China are working
towards developing such an infrastructure, but it is still uncertain whether this will be developed in time to enable the
EV market to grow at the expected rate.
6. CUSTOMER ATTITUDE TOWARDS EVS – Although a large number of customers are open to the idea of purchasing an
EV, there are several factors which might prevent them from doing so, including a) higher prices relative to similar
ICE (internal combustion engine) vehicles, b) fear that the battery may overheat, explode, or malfunction, c) lack of
adequate recharging infrastructure, d) limited range - especially for long distance commuters.
Sources for historical data and explanations can be found on the Trefis.com website (link)
— MODEL S MARKET SHARE —

This represents the market share of Model S as a percentage of the total EV market.

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Model S Market Share (%)

2.0
1.5
1.0
0.5
0.0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Tesla began sales of Model S in 2012. However, due to a limited production capacity initially, it only sold 2650 vehicles in
the same year. With the production hitting >20,000 cars annually at the end of 2012, Tesla sold close to 22,500 units of
Model S in 2013. Production continued to increase in 2013 and 2014. The company met its target of producing 35,000
vehicles in 2014, but fell short of its deliveries target. In 2014, it delivered 31,655 vehicles.
This translates to a gradual increase in market share from 0.2% in 2012 to a peak of 1.7% in 2019, followed by a gradual
decrease to around 1.1% by the end of our forecast period.
Forecast Rationale
Supporting:
1. LOW OPERATING COSTS – Conventional SUVs and crossovers have high operating costs due to their gas guzzling
nature. The all-electric Model S, on the other hand, has no such costs involved. Combining cost savings from using
electricity as a fuel vs gas as the fuel, business tax savings, shorter commutes(electric vehicles are essentially allowed to
use an HOV lane) and elimination of trips to the gas station, a Tesla user can save up to $700 per month. Tesla's new
leasing arrangement with Wells Fargo and U.S. Bank allows consumers to purchase a vehicle for no down payment
(it is taken care of from the tax saving) and a $500 per month installment. Additionally, after three years, the residual
value of the car is guaranteed by the company to be no less than that of a Mercedes S-class, widely considered to be
the best premium sedan on the market. These assurances make the car accessible to a much broader audience.
2. CUTTING EDGE TECHNOLOGY AND DESIGN – Apart from its all-electric zero emission engine, the Model S boasts a
number of unique features, such as its top quality design, touchscreen control panel, and high end performance (0-60
mph in 5.6 seconds). We expect these features to enable it to compete with well established luxury car manufacturers
such as Audi, BMW, and Mercedes Benz.
3. BROAD PRICE RANGE – The Model S is available at prices ranging from around $60,000 to almost $100,000. This
broad price range will allow it to cater to a wide range of luxury car buyers.
4. INCENTIVES FROM GOVERNMENTS – Many Governments around the world offer incentives to companies offering
green technology. In the state of California, for example, makers of zero-emission vehicles get credits from the state
Government. Tesla's Model S can qualify for these credits if it can get a certain percentage of its users to swap
batteries at Tesla's battery swap stations. In many cities in China, it is difficult to obtain number plates because users
have to enter auctions for a limited number of plates on offer. However, buyers of electric vehicles do not have to go
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through the auction process, which saves them both time and money (up to $10,000). As a result, some consumers are
more likely to buy electric vehicles. In some European countries, like Norway, the Government offers incentives like
free parking and separate driving lanes for users of electric cars. This props up demand for such technology and makes
it an attractive target market for a company like Tesla Motors.
Sources for historical data and explanations can be found on the Trefis.com website (link)
— TOTAL PASSENGER VEHICLE MARKET SIZE —

This represents the total market size of passenger cars worldwide.

Total Passenger Vehicle Market Size (Mil)

125
100
75
50
25
0
2011 1 2

13

14

15

16

17

18

19

20

21

22

The passenger car market has recovered from its low point of around 64 million units during the recession of 2008-2009,
to reach 85 million units in 2013, and 87.6 million units in 2014.
We expect the market to grow at a CAGR of 4%, reaching 130 million units by the end of our forecast period.
Forecast Rationale
Supporting:
1. GROWING GLOBAL POPULATION – The UN revised its world population forecasts in 2010. It now expects the current
world population of around 7 billion to grow to almost 10 billion by the year 2100. This translates to more car buyers,
and a growing auto market.
2. GROWING PURCHASING POWER IN DEVELOPING COUNTRIES – Rising incomes in developing countries, such as India
and China, is leading to increasing purchasing power in those regions. This translates to more car buyers, and a
growing auto market.
Mitigating:
3. DECLINING POPULATION IN DEVELOPED COUNTRIES – The developed world, which still purchases the majority of cars
globally, is facing a gradual decline in population, looking forward. This could impact the growth of the global auto
market.

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4. SLOWING ECONOMIC GROWTH IN DEVELOPED COUNTRIES – A number of developed countries, especially those in the
EU, are expected to face a protracted economic slowdown, looking forward. This would lead to declining wealth and
purchasing power in those regions, in turn leading to a decline in the growth of the car markets there.
5. IMPROVEMENT OF PUBLIC TRANSIT SYSTEMS – A number of countries, such as Switzerland and Singapore, have top
quality public transit systems. Countries such as these aim to discourage the use of cars as the primary mode of
transport among residents in order to reduce traffic and emissions. As public transit systems in other countries
improve as well, dependence on cars will decline, and this will have an impact on the growth of the global passenger
car market.
6. DISRUPTION OF THE TRANSPORTATION INDUSTRY – Newer technologies, like app-based cab services such as Uber and
Lyft, have made many parts of the cities, which were previously not accessible, accessible to users. Over long enough
distances, the cost of using Uber drops below the cost of owning a car. The rise of such technologies might convince
consumers to forego wanting to own a car. Self-driving cars might change the concept of ownership of a car. A selfdriving car does not require a driver, so once it drops a passenger it does need to stay there and can drop another
passenger. This aspect might change the concept of property in relation to cars. People might begin to think of
transportation as a public utility as opposed to a private one. This would result in fewer cars sold.
Sources for historical data and explanations can be found on the Trefis.com website (link)
— MODEL S GROSS PROFIT MARGIN —

This represent the gross margins associated with the Model S.

Model S Gross Profit Margin (%)

30
25
20
15
10
5
0
2011 1 2

13

14

15

16

17

18

19

20

21

22

Tesla began sales of the Model S in 2012. Due to a delay in the ramp up of production, margins could not reach the level
envisioned at the start of the year. In 2012, the gross margins stood at a mere 3.6%. However, the margins rebounded to
22.3% in 2013, helped by higher volumes and operational efficiencies. The trend continued in 2014 with average unit price
going higher and more operational efficiencies resulting in a gross margin of 27.4%.
We believe, based on guidance from management, that the company will be able to achieve gross margins of around
30% on the vehicle in 2024. Once Tesla is able to source batteries from its gigafactories, there could be a further upside to

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Model S gross margins.
Forecast Rationale
Supporting:
Mitigating:
1. HIGH END VARIANTS OF THE MODEL S WILL HAVE HIGHER MARGINS – The Model S is available in a price range from
$60,000-100,000. The high end variants offer larger battery packs and premium features such as better interiors,
improved suspension, and carbon fiber spoilers. This will help command higher margins.
2. DECLINING BATTERY COSTS – The costs of electric vehicle batteries are expected to decline substantially over the
course of this decade due to improving technology and battery makers achieving economies of scale. Batteries make
up a substantial portion of the total manufacturing costs of EVs, and a decline in these costs can considerably boost
margins.
3. According to a 2012 McKinsey study, the price of a lithium-ion battery pack could drop from $500-$600 per kiloWatt
hour(kWh) to about $200 per kWh in 2020 and $160 by 2025.
4. ECONOMIES OF SCALE – Once Tesla ramps up production of the Model S, costs will be substantially reduced due to
economies of scale, thereby leading to higher margins.
5. COMPETITION CAN FORCE TESLA TO REDUCE PRICES – The EV market is expected to grow at an exponential rate over
the next several years. A large number of competitors are bound to emerge, and considering the fact that Tesla is a
relatively new brand, customers may prefer to purchase EV's manufactured by trusted brands. This could force Tesla
to decrease prices in order to maintain its market share, thereby reducing margins.
Sources for historical data and explanations can be found on the Trefis.com website (link)
2011 2012 2013
0.00 0.46 2.21
N/A 38.5 11.5

Total Revenue (Bil $)
Model S Capex allocation (% of total)
Model S NWC & NOA allocation N/A -4.96 0.56
(% of total)
Model S (% of total)
Direct Expense (Bil $)
Indirect Expense (Bil $)
Adjusted EBITDA (Bil $)
Free Cash Flow (Bil $)

n/a
0.00
0.00
0.00
n/a

66.5
0.29
0.26
0.17
n/a

87.9
1.51
0.32
0.70
n/a

2014 2015
4.14 7.83
22.6 16.0

2016 2017
9.88 10.1
19.6 12.9

2018
11.0
8.78

2019 2020 2021
12.0 13.5 14.9
6.18 7.04 6.16

2022
16.4
5.26

2.98

-4.05 0.54

-1.75 -0.98 -0.86 -0.64 -0.56 -0.49

74.4
2.24
0.66
1.90
n/a

88.0
5.00
1.37
2.84
1.47

88.8
6.49
1.60
3.59
1.99

79.9
5.72
1.52
4.16
2.64

92.2
7.23
1.80
3.74
1.94

94.7
8.05
2.09
3.93
1.83

93.6
8.95
2.28
4.58
2.30

94.4
9.93
2.43
4.97
2.55

95.2
11.0
2.53
5.39
2.86

In addition, you can see the detailed P&L for the Model S business in the Appendix (link)

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Gen III
The most important drivers for the Gen III business are:
• Revenue per Unit of Gen III Sold
• EV/HEV as % of Total Passenger Vehicle Market
• Gen III Market Share
• Total Passenger Vehicle Market Size
• Gen III Gross Profit Margin
— REVENUE PER UNIT OF GEN III SOLD —

This represents the revenue Tesla receives per unit of Gen III sold.

Revenue per Unit of Gen III Sold (K $)

50
40
30
20
10
0
2011 1 2

13

14

15

16

17

18

19

20

21

22

Tesla will begin sales of the Gen III in 2017. Trefis expects the company to receive around $45,000 of revenue per unit sold
at the time of launch. Thereafter, the figure should witness a gradual rise. By the end of our forecast period, we expect the
price commanded to increase to around $50,000.
This will include the revenues recorded due to the sale of ZEV credits, earned by the automaker through the sale of
electric vehicles. In addition, the figure also includes the revenues earned through after sales service.
Forecast Rationale
Supporting:
1. TESLA HANDLES SALES AND MARKETING OF ITS VEHICLES IN-HOUSE – Tesla has set up a number of retail outlets in
the US and abroad, and plans to handle sales and marketing of all its vehicles in-house. As a result, it does not have
any payment obligations towards third party dealers.
2. ZEV CREDITS – As per the laws of a number of states in the US, alternative fuel vehicle manufacturers, such as Tesla,
receive ZEV (Zero Emission Vehicle) credits for each vehicle sold. Tesla then sells excess credits to other auto
manufacturers, who purchase the credits to meet regulatory requirements. Tesla has entered into such agreements

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with three auto manufacturers. We have taken into account the revenues Tesla receives from the sale of these credits
into our forecasts for revenue per vehicle sold.
3. AFTER SALES SERVICES – Tesla runs its own charging stations and service centers. Revenues generated from these
services are also bundled into the revenue per vehicle. Tesla is also offering consumers the option of a battery swap for
a nominal fee. The battery swap allows users to eliminate trips to charging stations and this might become an
attractive option for a number of consumers in the future, thus contributing to company revenues.
Mitigating:
4. PRICE COMPETITION – Considering that Tesla will want to maximize volumes with the Gen III, there is a possibility
that it will engage in price wars with competitors, forcing it to decrease pricing, thereby leading to lower revenues.
5. POSSIBILITY OF DISTRIBUTING VEHICLES THROUGH THIRD PARTY DEALERS IN THE FUTURE – As mentioned above,
Tesla currently handles all sales and marketing activities of its vehicles in-house. However, there is a possibility that
once Tesla reaches higher volumes, it may not be able to sustain this retail strategy. A portion of its vehicles may be
distributed through third party dealers, leading to dealer margins which would lower revenues per vehicle sold.
Sources for historical data and explanations can be found on the Trefis.com website (link)
— EV/HEV AS % OF TOTAL PASSENGER VEHICLE MARKET —

See our analysis of EV/HEV as % of Total Passenger Vehicle Market in the Model S division here.

— GEN III MARKET SHARE —

This represents the market share of Gen III as a percentage of the total EV market.

Gen III Market Share (%)

7.5

5.0

2.5

0.0
2011 1 2

13

14

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Gen III will begin sales in 2017. We expect Tesla to sell around 50,000 vehicles that year, and gradually ramp up to more
than 750,000 units per year by the end of our forecast period.
This translates to a gradual increase in market share from 1.3% in 2017 to a peak of 6.1% in 2020, and grow gradually
to 9.3% by the end of our forecast period.
Forecast Rationale
Supporting:
1. EXPECTED POPULARITY OF THE GEN III – We expect the Gen III to be a very popular car worldwide. According to
CEO, Elon Musk, the car will have a design similar to the Model S, which has been highly commended for its
unique design. Furthermore, the car will be available at a low price, which allows for a much larger customer base
than other Tesla models.
2. LOW OPERATING COSTS – Conventional sedans have high operating costs due to their gas guzzling nature. The allelectric Gen III on the other hand, will have no such costs involved. Combining cost savings from using electricity as
a fuel vs gas as a fuel, business tax savings, shorter commutes (electric vehicles are essentially allowed to use an HOV
lane) and elimination of trips to the gas station, a Tesla user can save up to $700 per month. Tesla's new leasing
arrangement with Wells Fargo and U.S. Bank allows consumers to purchase a vehicle for no down payment (it is
taken care of from the tax saving) and a $500 per month installment. Additionally, after three years the residual value
of the car is guaranteed by the company to be no less than that of a Mercedes S-class, widely considered to be the best
premium sedan on the market. These assurances make the car accessible to a much broader audience.
3. COMPETITIVE PRICING – Tesla has clearly announced its intent to target the mass market with the Gen III. The
vehicle is expected to have a base price of $30,000, which will allow it to compete with other popular vehicles such as
the Toyota Prius and the Honda Accord.
Sources for historical data and explanations can be found on the Trefis.com website (link)
— TOTAL PASSENGER VEHICLE MARKET SIZE —

See our analysis of Total Passenger Vehicle Market Size in the Model S division here.

— GEN III GROSS PROFIT MARGIN —

This represents the gross margin associated with the Gen III.

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Gen III Gross Profit Margin (%)

20
15
10
5
0
2011 1 2

13

14

15

16

17

18

19

20

21

22

Tesla will begin sales of the Gen III in 2017. Although management targets a long term gross margin of 25% for the
company as a whole, we believe that overall margins will gradually decline to around 23% as production of the Gen III is
ramped up.
We believe that the company will initially achieve a gross margin of around 17% on the vehicle, gradually increasing to
23.5% by 2020 and will stay at around that level until the end of our forecast period.
Forecast Rationale
Supporting:
Mitigating:
1. HIGH END VARIANTS OF THE GEN III WILL HAVE HIGHER MARGINS – The Gen III will be available in a price range
from $35,000-$60,000. The high end variants offer larger battery packs and premium features, such as better interiors,
improved suspension, and carbon fiber spoilers. This will help command higher margins.
2. DECLINING BATTERY COSTS – The costs of electric vehicle batteries are expected to decline substantially over the
course of this decade due to improving technology and battery makers achieving economies of scale. Batteries make
up a substantial portion of the total manufacturing costs of EVs, and a decline in these costs can considerably boost
margins.
3. According to a 2012 McKinsey study, the price of a lithium-ion battery pack could drop from $500-$600 per kiloWatt
hour(kWh) to about $200 per kWh in 2020 and $160 by 2025.
4. ECONOMIES OF SCALE – Once Tesla ramps up production of the Gen III, costs will be substantially reduced due to
economies of scale, thereby leading to higher margins.
5. COMPETITION CAN FORCE TESLA TO REDUCE PRICES – The EV market is expected to grow at an exponential rate over
the next several years. A large number of competitors are bound to emerge, and considering the fact that Tesla is a
relatively new brand, customers may prefer to purchase EV's manufactured by trusted brands. This could force Tesla
to decrease prices in order to maintain its market share, thereby reducing margins.
Sources for historical data and explanations can be found on the Trefis.com website (link)

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2011
0.00
N/A
N/A

2012
0.00
N/A
N/A

2013
0.00
N/A
N/A

2014
0.00
N/A
N/A

2015
0.00
N/A
N/A

2016
0.00
N/A
N/A

2017
2.64
12.9
88.8

2018
7.40
8.78
92.2

2019
12.0
6.18
94.7

2020
17.3
7.04
93.6

2021
23.1
6.16
94.4

2022
29.1
5.26
95.2

0.00
0.00
0.00
n/a

0.00
0.00
0.00
n/a

0.00
0.00
0.00
n/a

0.00
0.00
0.00
n/a

0.00
0.00
0.00
0.00

0.00
0.00
0.00
0.00

1.95
0.42
0.69
0.27

5.39
1.21
2.01
0.80

8.72
2.09
3.24
1.15

12.4
2.92
4.93
2.01

16.7
3.76
6.42
2.66

21.2
4.50
7.89
3.39

Total Revenue (Bil $)
Model S Capex allocation (% of total)
Gen III (% of total)
Model S NWC & NOA allocation N/A N/A N/A N/A N/A N/A -1.75 -0.98 -0.86 -0.64 -0.56 -0.49
(% of total)
Direct Expense (Bil $)
Indirect Expense (Bil $)
Adjusted EBITDA (Bil $)
Free Cash Flow (Bil $)

In addition, you can see the detailed P&L for the Gen III business in the Appendix (link)

Model X
The most important drivers for the Model X business are:
• Model X
• Model X Gross Profit Margin
— MODEL X —

This represents the revenues generated from the sale of Model X in dollar terms.

Model X ($ Bil)

6
5
4
3
2
1
0
2011 1 2

13

14

15

16

17

18

19

20

21

22

The Model X will enter the market in the second half of 2015, so its historical values are still zero.

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The vehicle is expected to be priced towards the higher-end of SUVs/crossovers and sell around 10,000 units in its
first year, growing to around 50,000 units by the end of our forecast period.
Forecast Rationale
Supporting:
1. LOW OPERATING COSTS – Conventional SUVs and crossovers have high operating costs due to their gas guzzling
nature. The all-electric Model X, on the other hand, has no such costs involved. Combining cost savings from using
electricity as a fuel vs gas as fuel, business tax savings, shorter commutes (electric vehicles are essentially allowed to
use an HOV lane) and elimination of trips to the gas station, a Tesla user can save up to $700 per month. Tesla's new
leasing arrangement with Wells Fargo and U.S. Bank allows consumers to purchase a vehicle for no down payment
(it is taken care of from the tax saving) and a $500 per month installment. Additionally, after three years the residual
value of the car is guaranteed by the company to be no less than that of a Mercedes S-class, widely considered to be
the best premium sedan on the market. These assurances make the car accessible to a much broader audience.
2. CUTTING EDGE TECHNOLOGY AND DESIGN – Apart from its all-electric zero emission engine, the Model X boasts a
number of unique features, such as its top quality design, touchscreen control panel, and high end performance (0-60
mph in 5.6 seconds). We expect these features to enable it to compete with well established luxury car manufacturers
such as Audi, BMW, and Mercedes Benz.
3. INCENTIVES FROM GOVERNMENTS – Many Governments around the world offer incentives to companies offering
green technology. In the state of California, for example, makers of zero-emission vehicles get credits from the state
Government. Tesla's Model X can qualify for these credits if it can get a certain percentage of its users to swap
batteries at Tesla's battery swap stations. In many cities in China, it is difficult to obtain number plates because users
have to enter auctions for a limited number of plates on offer. However, buyers of electric vehicles do not have to go
through the auction process, which saves them both time and money (up to $10,000). As a result, some consumers are
more likely to buy electric vehicles. In some European countries, like Norway, the Government offers incentives, like
free parking and separate driving lanes, for users of electric cars. This props up demand for such technology and
makes it an attractive target market for a company like Tesla Motors.
Sources for historical data and explanations can be found on the Trefis.com website (link)
— MODEL X GROSS PROFIT MARGIN —

This represent the gross margin associated with the Model X.

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Model X Gross Profit Margin (%)

30
25
20
15
10
5
0
2011 1 2

13

14

15

16

17

18

19

20

21

22

Tesla will begin sales of the Model X in the second half of 2015. The company's management targets a long term gross
margin of 25% for the company as a whole, with margins of the more expensive models being higher.
We believe that the company will initially achieve a gross margin of around 17% on the vehicle, increasing to 22% by
2016 and rising gradually from there on. The margin expansion will be helped by the inception of the gigafactory, which
should lower the overall battery costs.
Forecast Rationale
Supporting:
Mitigating:
1. TESLA CAN COMMAND HIGHER MARGINS ON THE MODEL X DUE TO THE UNIQUE NATURE OF THE VEHICLE – The
Model X will be the first ever pure-electric luxury crossover. It will also offer a number of other unique features, such
as "falcon wing" doors and Tesla's touchscreen control panel.
2. DECLINING BATTERY COSTS – The costs of electric vehicle batteries are expected to decline substantially over the
course of this decade due to improving technology and battery makers achieving economies of scale. Batteries make
up a substantial portion of the total manufacturing costs of EVs, and a decline in these costs can considerably boost
margins.
3. According to a 2012 McKinsey study, the price of a lithium-ion battery pack could drop from $500-$600 per kiloWatt
hour(kWh) to about $200 per kWh in 2020 and $160 by 2025.
4. ECONOMIES OF SCALE – Once Tesla ramps up production of the Model X, costs will be substantially reduced due to
economies of scale, leading to higher margins.
5. COMPETITION CAN FORCE TESLA TO REDUCE PRICES – The EV market is expected to grow at an exponential rate over
the next several years. A large number of competitors are bound to emerge, and considering the fact that Tesla is a
relatively new brand, customers may prefer to purchase EVs manufactured by trusted brands. This could force Tesla
to decrease prices in order to maintain its market share, thereby reducing margins.
Sources for historical data and explanations can be found on the Trefis.com website (link)

TREFIS ANALYSIS for TESLA MOTORS

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2011 2012 2013 2014 2015
0.00 0.00 0.00 0.00 1.38
N/A N/A N/A N/A 16.0

2016 2017
2.90 3.56
19.6 12.9

2018
4.53
8.78

2019 2020 2021
5.69 6.46 6.72
6.18 7.04 6.16

2022
6.93
5.26

Total Revenue (Bil $)
Model S Capex allocation (% of total)
Model S NWC & NOA allocation N/A N/A N/A N/A -4.05 0.54
(% of total)

-1.75 -0.98 -0.86 -0.64 -0.56 -0.49

Model X (% of total)
Direct Expense (Bil $)
Indirect Expense (Bil $)
Adjusted EBITDA (Bil $)
Free Cash Flow (Bil $)

88.8
2.40
0.57
1.16
0.59

N/A
0.00
0.00
0.00
n/a

N/A
0.00
0.00
0.00
n/a

N/A
0.00
0.00
0.00
n/a

N/A
0.00
0.00
0.00
n/a

88.0
1.01
0.24
0.37
0.13

79.9
1.81
0.45
1.09
0.65

92.2
3.09
0.74
1.44
0.70

94.7
3.93
1.00
1.76
0.76

93.6
4.36
1.09
2.11
1.02

94.4
4.54
1.09
2.18
1.09

95.2
4.69
1.07
2.25
1.17

In addition, you can see the detailed P&L for the Model X business in the Appendix (link)

Roadster
The most important drivers for the Roadster business are:
• Account Payable Days
• Accrued Liabilities as a % of Revenues
• Roadster Gross Profit Margin
— ACCOUNT PAYABLE DAYS —

Account Payable Days refers to the number of days it takes Tesla to clear off its outstanding accounts payable. We use this
metric to forecast the company's current accounts payable.

Account Payable Days ()

250
200
150
100
50
0
2011 1 2

13

14

TREFIS ANALYSIS for TESLA MOTORS

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16

17

18

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Tesla's account payable days have fluctuated in the past, which is common for a company in a nascent stage. Going
forward, we expect Tesla's Account Payable Days to stabilize near 100-110 days..
Forecast Rationale
Our forecasts are based on historical trends.
Sources for historical data and explanations can be found on the Trefis.com website (link)
— ACCRUED LIABILITIES AS A % OF REVENUES —

Accrued liabilities are expenses that a business has incurred but has not yet paid. We express them as a percentage of
revenues.

Accrued Liabilities as a % of Revenues (%)

15.0
12.5
10.0
7.5
5.0
2.5
0.0
2011 1 2

13

14

15

16

17

18

19

20

21

22

Accrued Liabilities as a % of Revenues declined steeply in 2012 and 2013 since the revenue growth outpaced the growth in
the accrued liabilities. Going forward, we expect the figure to stabilize near 10%.
Forecast Rationale
The forecast has been done on the basis of historical data.
Sources for historical data and explanations can be found on the Trefis.com website (link)
— ROADSTER GROSS PROFIT MARGIN —

This represents the gross margin associated with the Roadster.

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Roadster Gross Profit Margin (%)

30
25
20
15
10
5
0
2011 1 2

13

14

15

16

17

18

19

20

21

22

Tesla began sales of the Roadster in 2009. Due to a delay in the ramp up of production, margins could not reach the level
envisioned at the start of the year. In 2012, the gross margins stood at a mere 4.2%. However, the margins rebounded to
22.3% in 2013, helped by higher volumes and operational efficiencies.
We believe, based on guidance from management, that the company will be able to achieve gross margins of around
30% on the vehicle in 2024. Once Tesla is able to source batteries from its gigafactories, there could be a further upside to
the Roadster's gross margins.
Forecast Rationale
Supporting:
1. TESLA CAN COMMAND HIGHER MARGINS ON THE ROADSTER DUE TO ITS HIGH PERFORMANCE AND QUALITY DESIGN –
The Roadster has received widespread acclaim for its design and does 0-60 mph in an impressive 3.7 seconds. This
allows Tesla to command a high margin on the Roadster, in the range of other top end sports cars.
2. DECLINING BATTERY COSTS – The costs of electric vehicle batteries are expected to decline substantially over the
course of this decade due to improving technology and battery makers achieving economies of scale. Batteries make
up a substantial portion of the total manufacturing costs of EVs, and a decline in these costs can considerably boost
margins.
3. According to a 2012 McKinsey study, the price of a lithium-ion battery pack could drop from $500-$600 per kiloWatt
hour(kWh) to about $200 per kWh in 2020 and $160 by 2025.
4. ECONOMIES OF SCALE – Once Tesla ramps up production of the Roadster to the expected level, costs will be
substantially reduced due to economies of scale, thereby leading to higher margins.
Sources for historical data and explanations can be found on the Trefis.com website (link)
Total Revenue (Bil $)
Model S Capex allocation (% of total)
Roadster (% of total)

2011
0.18
52.1
57.8

TREFIS ANALYSIS for TESLA MOTORS

2012
0.07
38.5
66.5

2013
0.01
11.5
87.9

2014
0.00
N/A
N/A

2015
0.00
N/A
N/A

2016
0.00
N/A
N/A

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2017
0.00
N/A
N/A

2018
0.00
N/A
N/A

2019
0.79
6.18
94.7

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1.20
7.04
93.6

2021
1.59
6.16
94.4

2022
1.73
5.26
95.2

•22

2011
Model S NWC & NOA allocation
(% of total)

Direct Expense (Bil $)
Indirect Expense (Mil $)
Adjusted EBITDA (Mil $)
Free Cash Flow (Mil $)

2012

2013

2014 2015

2016 2017

2018

2019 2020 2021

2022

-9.92 -4.96 0.56

N/A N/A N/A N/A N/A -0.86 -0.64 -0.56 -0.49

0.08
133
97.4
n/a

0.00
0.00
0.00
n/a

0.04
39.2
25.6
n/a

0.01
1.30
2.82
n/a

0.00
0.00
0.00
0.00

0.00
0.00
0.00
0.00

0.00
0.00
0.00
0.00

0.00
0.00
0.00
0.00

0.54
138
254
115

0.80
202
398
196

1.07
258
522
263

1.17
268
564
296

In addition, you can see the detailed P&L for the Roadster business in the Appendix (link)

Electric Powertrain Sales
The most important drivers for the Electric Powertrain Sales business are:
• Account Payable Days
• Accrued Liabilities as a % of Revenues
• Powertrain Components & Sales Gross Profit Margin
— ACCOUNT PAYABLE DAYS —

See our analysis of Account Payable Days in the Roadster division here.

— ACCRUED LIABILITIES AS A % OF REVENUES —

See our analysis of Accrued Liabilities as a % of Revenues in the Roadster division here.

— POWERTRAIN COMPONENTS & SALES GROSS PROFIT MARGIN —

This represents the gross margin associated with the sale of electric powertrains, battery packs and other components.

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Powertrain Components & Sales Gross Profit Margin (%)

25
20
15
10
5
0
2011 1 2

13

14

15

16

17

18

19

20

21

22

Gross margins on powertrain components have gradually increased from 8.5% in 2009 to around 22% in 2011. The margins
plummted to 4.2% in 2012 but rebounded to 22.3% in 2013.
Going forward, we expect gross margins to reach around 26-27% and stabilize at that level.
Forecast Rationale
Supporting:
1. INCREASE IN DEMAND AS OTHER AUTO MANUFACTURERS LOOK TO FAST TRACK THE RELEASE OF AN EV – Tesla has
already invested significant R&D over the years into developing powertrains for electric vehicles. Manufacturers such
as Toyota and Daimler have decided to source powertrain components from Tesla in order to quickly bring EVs to
the market. This increased demand for its proprietary technology may give Tesla pricing power in the near term.
2. FALLING BATTERY COSTS AND IMPROVED EFFICIENCY – Going forward, electric vehicle battery costs are expected to
fall substantially. Furthermore, Tesla is gaining experience as an EV manufacturer and will continue to reduce any
cost inefficiencies. This will boost margins.
Mitigating:
3. TESLA'S LEADING POSITION IN ELECTRIC VEHICLE TECHNOLOGY MAY NOT BE LONG LASTING – Tesla is currently a
leader in electric vehicle technology. However, the company is still much smaller than its rivals and must reduce
R&D expenses in order to turn profitable. There is therefore a possibility that it may lose its leading position in the
future. As a result, Tesla may lose some of its pricing power, leading to lower margins.
Sources for historical data and explanations can be found on the Trefis.com website (link)
2011
81.1
52.1

2012
47.2
38.5

2013
51.3
11.5

Total Revenue (Mil $)
Model S Capex allocation (% of total)
Model S NWC & NOA allocation -9.92 -4.96 0.56
(% of total)
Electric Powertrain Components
Revenue (% of total)

57.8

TREFIS ANALYSIS for TESLA MOTORS

66.5

87.9

2014 2015
151
138
22.6 16.0

2016 2017
165
160
19.6 12.9

2018
166
8.78

2019 2020 2021
175
191
205
6.18 7.04 6.16

2022
219
5.26

2.98

-4.05 0.54

-1.75 -0.98 -0.86 -0.64 -0.56 -0.49

74.4

88.0

88.8

79.9

CONTENT@TREFIS.COM

92.2

94.7

+ 1 617 394 8763

93.6

94.4

95.2

•24

Direct Expense (Mil $)
Indirect Expense (Mil $)
Adjusted EBITDA (Mil $)
Free Cash Flow (Mil $)

2011
36.2
61.3
44.9
n/a

2012
30.0
26.2
17.1
n/a

2013
35.0
7.47
16.3
n/a

2014
82.0
24.4
69.8
n/a

2015
88.6
24.2
50.1
25.9

2016
95.7
25.4
69.3
44.0

2017
103
25.5
56.9
31.4

2018
111
27.4
55.2
27.8

2019
120
30.7
54.8
24.2

2020
130
32.2
61.4
29.2

2021
140
33.4
64.6
31.2

2022
151
34.0
67.8
33.8

In addition, you can see the detailed P&L for the Electric Powertrain Sales business in the Appendix (link)

Development Services
The most important drivers for the Development Services business are:
• Account Payable Days
• Accrued Liabilities as a % of Revenues
• Development Services Gross Profit Margin
— ACCOUNT PAYABLE DAYS —

See our analysis of Account Payable Days in the Roadster division here.

— ACCRUED LIABILITIES AS A % OF REVENUES —

See our analysis of Accrued Liabilities as a % of Revenues in the Roadster division here.

— DEVELOPMENT SERVICES GROSS PROFIT MARGIN —

This represents the gross margins associated with Tesla's development services.

TREFIS ANALYSIS for TESLA MOTORS

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•25

Development Services Gross Profit Margin (%)

60
50
40
30
20
10
0
-10
-20
2011 1 2

13

14

15

16

17

18

19

20

21

22

Development services had a gross profit margin of 69.3% in 2010. This was abnormally high due to timing differences
between revenue recognition and the cost of underlying revenues. Margins decreased to around 51% in 2011 but rose to 58%
in 2012. In 2013, margins plummeted to 15%. The figure dropped further to -18.5% in 2014.
Going forward, we expect gross margins to increase and reach closer to the historical levels.
Forecast Rationale
1. DEVELOPMENT SERVICES IS A HIGH TECHNOLOGY, HIGH VALUE ADD BUSINESS – Other automakers hire Tesla to help
them develop electric powertrains. Tesla uses its expertise and proprietary technology in designing these powertrain
systems. For this reason, we believe these services command high margins.
Sources for historical data and explanations can be found on the Trefis.com website (link)
2011
96.3
52.1

2012
41.5
38.5

2013
17.9
11.5

Total Revenue (Mil $)
Model S Capex allocation (% of total)
Model S NWC & NOA allocation -9.92 -4.96 0.56
(% of total)
Development Services Revenues (%
of total)

Direct Expense (Mil $)
Indirect Expense (Mil $)
Adjusted EBITDA (Mil $)
Free Cash Flow (Mil $)

2014 2015
7.57 7.04
22.6 16.0

2016 2017
8.53 8.44
19.6 12.9

2018
8.94
8.78

2019 2020 2021
9.58 10.7 11.6
6.18 7.04 6.16

2022
12.7
5.26

2.98

-4.05 0.54

-1.75 -0.98 -0.86 -0.64 -0.56 -0.49

57.8

66.5

87.9

74.4

88.0

79.9

88.8

92.2

94.7

93.6

94.4

95.2

27.2
72.8
69.2
n/a

11.5
23.0
29.9
n/a

13.4
2.60
4.52
n/a

6.67
1.21
0.89
n/a

5.48
1.23
1.56
0.33

5.83
1.31
2.71
1.40

6.03
1.34
2.41
1.06

6.23
1.47
2.72
1.25

6.39
1.68
3.19
1.51

6.53
1.79
4.13
2.33

6.64
1.89
4.99
3.10

6.94
1.96
5.74
3.78

TREFIS ANALYSIS for TESLA MOTORS

CONTENT@TREFIS.COM

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•26

In addition, you can see the detailed P&L for the Development Services business in the Appendix (link)

TREFIS ANALYSIS for TESLA MOTORS

CONTENT@TREFIS.COM

+ 1 617 394 8763

•27

Learn More
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understand the seemingly familiar companies around them including well known companies like Apple, Google, Coca
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TREFIS ANALYSIS for TESLA MOTORS

CONTENT@TREFIS.COM

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•28

Appendix

Summary P&L for Tesla Motors
Summary P&L for Tesla Motors
Total Revenues (Bil $)
Model S (% of total)
Gen III (% of total)
Model X (% of total)
Roadster (% of total)
Electric Powertrain Sales (% of total)
Development Services (% of total)
Direct Expenses (Bil $)
Model S (% of total)
Gen III (% of total)
Model X (% of total)
Roadster (% of total)
Electric Powertrain Sales (% of total)
Development Services (% of total)
Adjusted EBITDA (Bil $)
Model S (% of total)
Gen III (% of total)
Model X (% of total)
Roadster (% of total)
Electric Powertrain Sales (% of total)
Development Services (% of total)
Indirect Expenses (Bil $)
Model S (% of total)
Gen III (% of total)
Model X (% of total)
Roadster (% of total)
Electric Powertrain Sales (% of total)
Development Services (% of total)
Free Cash Flow (Bil $)
Model S (% of total)
Gen III (% of total)
Model X (% of total)
Roadster (% of total)
Electric Powertrain Sales (% of total)

2011
0.35
0.00
0.00
0.00
49.8
22.9
27.3
0.14
0.00
0.00
0.00
46.1
21.2
32.7
0.21
0.00
0.00
0.00
46.1
21.2
32.7
0.27
0.00
0.00
0.00
49.8
22.9
27.3
n/a
n/a
n/a
n/a
n/a
n/a

TREFIS ANALYSIS for TESLA MOTORS

2012
0.62
74.4
0.00
0.00
11.4
7.59
6.67
0.38
69.8
0.00
0.00
10.7
7.12
12.4
0.24
69.8
0.00
0.00
10.7
7.12
12.4
0.35
74.4
0.00
0.00
11.4
7.59
6.67
n/a
n/a
n/a
n/a
n/a
n/a

2013
2.29
96.6
0.00
0.00
0.39
2.24
0.78
1.57
96.7
0.00
0.00
0.39
2.24
0.62
0.72
96.7
0.00
0.00
0.39
2.24
0.62
0.33
96.6
0.00
0.00
0.39
2.24
0.78
n/a
n/a
n/a
n/a
n/a
n/a

2014
4.30
96.3
0.00
0.00
0.00
3.53
0.18
2.32
96.4
0.00
0.00
0.00
3.54
0.05
1.97
96.4
0.00
0.00
0.00
3.54
0.05
0.69
96.3
0.00
0.00
0.00
3.53
0.18
n/a
n/a
n/a
n/a
n/a
n/a

2015
9.36
83.7
0.00
14.7
0.00
1.48
0.08
6.10
87.0
0.00
11.4
0.00
1.54
0.05
3.26
87.0
0.00
11.4
0.00
1.54
0.05
1.63
83.7
0.00
14.7
0.00
1.48
0.08
1.63
90.3
0.00
8.05
0.00
1.59

2016
13.0
76.3
0.00
22.4
0.00
1.27
0.07
7.63
78.1
0.00
20.5
0.00
1.30
0.05
5.33
78.1
0.00
20.5
0.00
1.30
0.05
1.99
76.3
0.00
22.4
0.00
1.27
0.07
3.33
79.2
0.00
19.4
0.00
1.32

CONTENT@TREFIS.COM

2017
16.5
61.3
16.0
21.6
0.00
0.97
0.05
11.0
65.3
12.6
21.0
0.00
1.03
0.04
5.50
65.3
12.6
21.0
0.00
1.03
0.04
2.61
61.3
16.0
21.6
0.00
0.97
0.05
2.89
68.9
9.49
20.5
0.00
1.09

2018
23.1
47.5
32.1
19.6
0.00
0.72
0.04
15.8
51.6
27.8
19.9
0.00
0.76
0.04
7.24
51.6
27.8
19.9
0.00
0.76
0.04
3.78
47.5
32.1
19.6
0.00
0.72
0.04
3.46
56.0
23.0
20.1
0.00
0.80

2019
30.6
39.1
39.1
18.6
2.59
0.57
0.03
21.4
42.5
35.1
19.0
2.75
0.59
0.03
9.23
42.5
35.1
19.0
2.75
0.59
0.03
5.35
39.1
39.1
18.6
2.59
0.57
0.03
3.88
47.2
29.6
19.6
2.98
0.62

+ 1 617 394 8763

2020
38.7
34.9
44.8
16.7
3.10
0.49
0.03
26.7
37.9
40.8
17.5
3.30
0.51
0.03
12.1
37.9
40.8
17.5
3.30
0.51
0.03
6.52
34.9
44.8
16.7
3.10
0.49
0.03
5.55
41.4
36.1
18.4
3.54
0.53

2021
46.5
32.0
49.6
14.4
3.42
0.44
0.02
32.4
35.1
45.3
15.4
3.69
0.46
0.04
14.2
35.1
45.3
15.4
3.69
0.46
0.04
7.58
32.0
49.6
14.4
3.42
0.44
0.02
6.59
38.6
40.3
16.5
4.00
0.47

2022
54.3
30.1
53.5
12.8
3.19
0.40
0.02
38.2
33.4
48.8
13.9
3.49
0.42
0.04
16.2
33.4
48.8
13.9
3.49
0.42
0.04
8.41
30.1
53.5
12.8
3.19
0.40
0.02
7.76
36.9
43.7
15.1
3.82
0.44

•29

Summary P&L for Tesla Motors continued
2011 2012
Development Services (% of total)
n/a n/a

2013
n/a

2014 2015 2016 2017 2018 2019 2020 2021
n/a 0.02 0.04 0.04 0.04 0.04 0.04 0.05

2022
0.05

Detailed P&L for the Model S business
The most important drivers for the Model S business are discussed above, here is the detailed P&L.
Model S: Detailed P&L
2011
Revenues
Model S Capex allocation (Bil $)
Model S Capex allocation ($ Bil)
Model S NWC & NOA allocation
(Mil $)

Inventory Turnover Ratio
Account Receivable Days
Other Current Assets as % of
Revenue (%)
Account Payable Days
Accrued Liabilities as a % of
Revenues (%)
Other Assets as % of Revenue (%)
Other Liabilities as % of Revenue
(%)

Model S (Bil $)
Revenue per Unit of Model S
Sold ($ K)
Model S Market Share (%)
EV/HEV as % of Total Passenger
Vehicle Market (%)
Total Passenger Vehicle Market
Size (Mil)
Total Revenues (Bil $)
Expenses
Direct Expenses (Bil $)
Model S Gross Profit Margin (%)
Indirect Expenses (Bil $)
Effective Taxes ($ Bil)
SG&A as % of Gross Profits (%)
R&D as a % of Revenues (%)
Total Expenses (Bil $)

2012

2013

2014 2015

2016 2017

2018

0.00 0.18
0.00 0.18

0.26
0.26

0.93
0.93

1.26
1.26

1.94
1.94

1.30
1.30

0.96 0.74
0.96 0.74

0.95
0.95

0.00 -22.9 12.4

123

-317

53.2

-176

-107

-102

-86.8 -83.7 -80.2

89.5
17.0

237
23.7

61.7
8.90

108
25.9

98.8
25.9

108
25.9

103
25.9

103
25.9

103
25.9

103
25.9

103
25.9

103
25.9

4.61

2.04

1.37

2.96

2.96

2.96

2.96

2.96

2.96

2.96

2.96

2.96

100

267

55.1

88.8

98.8

103

103

103

103

103

103

103

15.7

9.63

5.38

8.41

9.41

9.41

9.41

9.41

9.41

9.41

9.41

9.41

11.0

5.31

1.17

1.35

1.35

1.35

1.35

1.35

1.35

1.35

1.35

1.35

7.30

6.09 2.89

5.42

5.42

5.42

5.42

5.42

5.42

5.42

5.42

5.42

n/a

0.31

1.94

3.08

6.90 7.89

8.96

10.1

11.3

12.7

14.1

15.6

86.5

97.3

102

102

101

101

101

101

101

101

n/a

0.20 1.35

1.17

2.17

2.18

2.19

2.20

2.21

2.22

2.23

2.24

1.31

1.64

1.96

3.09

3.42

3.75

4.08

4.41

4.74

5.07

5.40

5.73

76.1

80.7

84.8

87.2

90.7

94.4

98.1

102

106

110

114

119

0.00 0.46 2.21

4.14

7.83

9.88

10.1

11.0

12.0

13.5

14.9

16.4

0.00
0.00
0.00
0.00
124
92.7
0.00

2.24
27.4
0.66
0.01
32.4
12.4
2.90

5.00
27.5
1.37
-0.04
34.4
11.4
6.36

5.72
27.5
1.52
-0.05
35.4
10.4
7.24

6.49
27.5
1.60
-0.09
36.4
9.40
8.10

7.23
28.5
1.80
-0.04
37.4
8.40
9.02

8.05
29.0
2.09
0.24
36.4
7.40
10.1

8.95
29.3
2.28
0.52
35.4
6.40
11.2

9.93
29.4
2.43
0.86
34.4
5.40
12.4

11.0
29.6
2.53
1.21
33.4
4.40
13.5

0.00 116

TREFIS ANALYSIS for TESLA MOTORS

0.29
4.21
0.26
0.00
321
58.5
0.55

1.51
22.3
0.32
0.00
30.1
9.72
1.83

CONTENT@TREFIS.COM

2019 2020 2021

+ 1 617 394 8763

0.92
0.92

2022
0.86
0.86

•30

Model S: Detailed P&L continued
Adjusted EBITDA (Bil $)
Free Cash Flow (Bil $)

2011 2012
0.00 0.17
n/a n/a

2013
0.70
n/a

2014 2015
1.90 2.84
n/a 1.47

2016 2017
4.16 3.59
2.64 1.99

2018
3.74
1.94

2019 2020 2021
3.93 4.58 4.97
1.83 2.30 2.55

2022
5.39
2.86

Detailed P&L for the Gen III business
The most important drivers for the Gen III business are discussed above, here is the detailed P&L.
Gen III: Detailed P&L
2011
Revenues
Model S Capex allocation (Bil $)
Model S Capex allocation ($ Bil)
Gen III (Bil $)
Revenue per Unit of Gen III Sold
(K $)

Gen III Market Share (%)
EV/HEV as % of Total Passenger
Vehicle Market (%)
Total Passenger Vehicle Market
Size (Mil)
Model S NWC & NOA allocation
(Mil $)

Inventory Turnover Ratio
Account Receivable Days
Other Current Assets as % of
Revenue (%)
Account Payable Days
Accrued Liabilities as a % of
Revenues (%)
Other Assets as % of Revenue (%)
Other Liabilities as % of Revenue
(%)

Total Revenues (Bil $)
Expenses
Direct Expenses (Bil $)
Gen III Gross Profit Margin (%)
Indirect Expenses (Bil $)
Effective Taxes ($ Bil)
SG&A as % of Gross Profits (%)
R&D as a % of Revenues (%)
Total Expenses (Bil $)

2016 2017

2018

2019 2020 2021

2022

0.00 0.00 0.00 0.00 0.00 0.00 0.34
0.00 0.00 0.00 0.00 0.00 0.00 0.34
0.00 0.00 0.00 0.00 0.00 0.00 2.35

0.65
0.65
6.83

0.74
0.74
11.3

1.22
1.22
16.2

1.42
1.42
21.8

1.53
1.53
27.7

0.00 0.00 0.00 0.00 0.00 0.00 45.0

45.9

46.8

47.5

48.1

48.7

0.00 0.00 0.00 0.00 0.00 0.00 1.30

3.30

4.80

6.10

7.30

8.30

1.31

1.64

1.96

3.09

3.42

3.75

4.08

4.41

4.74

5.07

5.40

5.73

76.1

80.7

84.8

87.2

90.7

94.4

98.1

102

106

110

114

119

0.00 0.00 0.00 0.00 0.00 0.00 -46.1 -72.8 -102

-111

-129

-142

89.5
17.0

237
23.7

61.7
8.90

108
25.9

98.8
25.9

108
25.9

103
25.9

103
25.9

103
25.9

103
25.9

103
25.9

103
25.9

4.61

2.04

1.37

2.96

2.96

2.96

2.96

2.96

2.96

2.96

2.96

2.96

100

267

55.1

88.8

98.8

103

103

103

103

103

103

103

15.7

9.63

5.38

8.41

9.41

9.41

9.41

9.41

9.41

9.41

9.41

9.41

11.0

5.31

1.17

1.35

1.35

1.35

1.35

1.35

1.35

1.35

1.35

1.35

7.30

6.09 2.89

5.42

5.42

5.42

5.42

5.42

5.42

5.42

5.42

5.42

0.00 0.00 0.00 0.00 0.00 0.00 2.64

7.40

12.0

17.3

23.1

29.1

0.00
0.00
0.00
0.00
124
92.7
0.00

5.39
21.0
1.21
-0.04
37.4
8.40
6.61

8.72
23.0
2.09
0.24
36.4
7.40
10.8

12.4
23.5
2.92
0.52
35.4
6.40
15.3

16.7
23.5
3.76
0.86
34.4
5.40
20.4

21.2
23.5
4.50
1.21
33.4
4.40
25.7

TREFIS ANALYSIS for TESLA MOTORS

2012

0.00
0.00
0.00
0.00
321
58.5
0.00

2013

0.00
0.00
0.00
0.00
30.1
9.72
0.00

2014 2015

0.00
0.00
0.00
0.01
32.4
12.4
0.00

0.00
0.00
0.00
-0.04
34.4
11.4
0.00

0.00
0.00
0.00
-0.05
35.4
10.4
0.00

CONTENT@TREFIS.COM

1.95
17.0
0.42
-0.09
36.4
9.40
2.37

+ 1 617 394 8763

•31

Gen III: Detailed P&L continued
2011
Adjusted EBITDA (Bil $)
Free Cash Flow (Bil $)

2012

2013

2014 2015

2016 2017

2018

2019 2020 2021

0.00 0.00 0.00 0.00 0.00 0.00 0.69 2.01 3.24
n/a n/a n/a n/a 0.00 0.00 0.27 0.80 1.15

4.93
2.01

2022

6.42
2.66

7.89
3.39

Detailed P&L for the Model X business
The most important drivers for the Model X business are discussed above, here is the detailed P&L.
Model X: Detailed P&L
2011
Revenues
Model S Capex allocation (Mil $)
Model S Capex allocation ($ Mil)
Model S NWC & NOA allocation

2012

2013

2014 2015

0.00 0.00 0.00 0.00 220
0.00 0.00 0.00 0.00 220

2016 2017

2018

2019 2020 2021

2022

568
568

397
397

351
351

364
364

459
459

455
455

414
414

0.00 0.00 0.00 0.00 -55.8 15.6

-62.2 -44.5 -48.8 -41.5 -37.8 -34.0

89.5
17.0

237
23.7

61.7
8.90

108
25.9

98.8
25.9

108
25.9

103
25.9

103
25.9

103
25.9

103
25.9

103
25.9

103
25.9

4.61

2.04

1.37

2.96

2.96

2.96

2.96

2.96

2.96

2.96

2.96

2.96

100

267

55.1

88.8

98.8

103

103

103

103

103

103

103

15.7

9.63

5.38

8.41

9.41

9.41

9.41

9.41

9.41

9.41

9.41

9.41

11.0

5.31

1.17

1.35

1.35

1.35

1.35

1.35

1.35

1.35

1.35

1.35

7.30

6.09 2.89

5.42

5.42

5.42

5.42

5.42

5.42

5.42

5.42

5.42

0.00 0.00 0.00 0.00 1.21
0.00 0.00 0.00 0.00 1.21
0.00 0.00 0.00 0.00 1.38

2.32
2.32
2.90

3.16
3.16
3.56

4.17
4.17
4.53

5.39
5.39
5.69

6.05
6.05
6.46

6.35
6.35
6.72

6.60
6.60
6.93

Expenses
Direct Expenses (Bil $)
Model X Gross Profit Margin (%)
Indirect Expenses (Bil $)
Effective Taxes ($ Bil)
SG&A as % of Gross Profits (%)
R&D as a % of Revenues (%)
Total Expenses (Bil $)

0.00
0.00
0.00
0.00
124
92.7
0.00

1.81
22.0
0.45
-0.05
35.4
10.4
2.25

2.40
24.0
0.57
-0.09
36.4
9.40
2.97

3.09
26.0
0.74
-0.04
37.4
8.40
3.83

3.93
27.0
1.00
0.24
36.4
7.40
4.93

4.36
28.0
1.09
0.52
35.4
6.40
5.44

4.54
28.5
1.09
0.86
34.4
5.40
5.63

4.69
29.0
1.07
1.21
33.4
4.40
5.76

Adjusted EBITDA (Bil $)
Free Cash Flow (Bil $)

0.00 0.00 0.00 0.00 0.37
n/a n/a n/a n/a 0.13

1.09
0.65

1.16
0.59

1.44
0.70

1.76
0.76

2.11
1.02

2.18
1.09

2.25
1.17

(Mil $)

Inventory Turnover Ratio
Account Receivable Days
Other Current Assets as % of
Revenue (%)
Account Payable Days
Accrued Liabilities as a % of
Revenues (%)
Other Assets as % of Revenue (%)
Other Liabilities as % of Revenue
(%)

Model X (Bil $)
Model X ($ Bil)
Total Revenues (Bil $)

TREFIS ANALYSIS for TESLA MOTORS

0.00
0.00
0.00
0.00
321
58.5
0.00

0.00
0.00
0.00
0.00
30.1
9.72
0.00

0.00
0.00
0.00
0.01
32.4
12.4
0.00

1.01
17.0
0.24
-0.04
34.4
11.4
1.25

CONTENT@TREFIS.COM

+ 1 617 394 8763

•32

Detailed P&L for the Roadster business
The most important drivers for the Roadster business are discussed above, here is the detailed P&L.
Roadster: Detailed P&L
Revenues
Model S Capex allocation (Mil $)
Model S Capex allocation ($ Mil)
Roadster (Bil $)
Roadster ($ Bil)
Model S NWC & NOA allocation

2011

2012

2013

2014 2015

2016 2017

2018

2019 2020 2021

2022

91.7
91.7
0.10
0.10

27.2
27.2
0.05
0.05

1.03
1.03
0.01
0.01

0.00
0.00
0.00
0.00

0.00
0.00
0.00
0.00

0.00
0.00
0.00
0.00

48.9
48.9
0.75
0.75

91.2
91.2
1.65
1.65

0.00
0.00
0.00
0.00

0.00
0.00
0.00
0.00

84.7
84.7
1.12
1.12

97.9
97.9
1.50
1.50

-17.5 -3.50 0.05

0.00 0.00 0.00 0.00 0.00 -6.80 -7.72 -8.93 -8.50

89.5
17.0

237
23.7

61.7
8.90

108
25.9

98.8
25.9

108
25.9

103
25.9

103
25.9

103
25.9

103
25.9

103
25.9

103
25.9

4.61

2.04

1.37

2.96

2.96

2.96

2.96

2.96

2.96

2.96

2.96

2.96

100

267

55.1

88.8

98.8

103

103

103

103

103

103

103

15.7

9.63

5.38

8.41

9.41

9.41

9.41

9.41

9.41

9.41

9.41

9.41

11.0

5.31

1.17

1.35

1.35

1.35

1.35

1.35

1.35

1.35

1.35

1.35

7.30

6.09 2.89

5.42

5.42

5.42

5.42

5.42

5.42

5.42

5.42

5.42

0.18

0.07

0.01

0.00 0.00 0.00 0.00 0.00 0.79

1.20

1.59

1.73

Expenses
Direct Expenses (Bil $)
Roadster Gross Profit Margin (%)
Indirect Expenses (Mil $)
Effective Taxes ($ Bil)
SG&A as % of Gross Profits (%)
R&D as a % of Revenues (%)
Total Expenses (Bil $)

0.08
22.7
133
0.00
124
92.7
0.21

0.04
4.21
39.2
0.00
321
58.5
0.08

0.01
22.3
1.30
0.00
30.1
9.72
0.01

0.00
27.3
0.00
0.01
32.4
12.4
0.00

0.80
28.6
202
0.52
35.4
6.40
1.01

1.07
28.9
258
0.86
34.4
5.40
1.33

1.17
29.2
268
1.21
33.4
4.40
1.44

Adjusted EBITDA (Mil $)
Free Cash Flow (Mil $)

97.4
n/a

25.6
n/a

2.82
n/a

0.00 0.00 0.00 0.00 0.00 254
n/a 0.00 0.00 0.00 0.00 115

398
196

522
263

564
296

(Mil $)

Inventory Turnover Ratio
Account Receivable Days
Other Current Assets as % of
Revenue (%)
Account Payable Days
Accrued Liabilities as a % of
Revenues (%)
Other Assets as % of Revenue (%)
Other Liabilities as % of Revenue
(%)

Total Revenues (Bil $)

TREFIS ANALYSIS for TESLA MOTORS

0.00
27.3
0.00
-0.04
34.4
11.4
0.00

0.00
27.3
0.00
-0.05
35.4
10.4
0.00

CONTENT@TREFIS.COM

0.00
27.3
0.00
-0.09
36.4
9.40
0.00

0.00
27.3
0.00
-0.04
37.4
8.40
0.00

0.54
28.3
138
0.24
36.4
7.40
0.68

+ 1 617 394 8763

•33

Detailed P&L for the Electric Powertrain
Sales business
The most important drivers for the Electric Powertrain Sales business are discussed above, here is the detailed P&L.
Electric Powertrain Sales: Detailed P&L
2011
Revenues
Model S Capex allocation (Mil $)
42.3
Model S Capex allocation ($ Mil) 42.3
Model S NWC & NOA allocation -8.04

2012

2013

2014 2015

2016 2017

2018

2019 2020 2021

2022

18.2
18.2

5.92
5.92

34.3
34.3

22.2
22.2

32.3
32.3

14.6
14.6

10.8
10.8

11.6
11.6

-2.34 0.29

4.52

-5.62 0.89

-2.80 -1.64 -1.51

-1.23 -1.15

-1.08

89.5
17.0

237
23.7

61.7
8.90

108
25.9

98.8
25.9

108
25.9

103
25.9

103
25.9

103
25.9

103
25.9

103
25.9

103
25.9

4.61

2.04

1.37

2.96

2.96

2.96

2.96

2.96

2.96

2.96

2.96

2.96

100

267

55.1

88.8

98.8

103

103

103

103

103

103

103

15.7

9.63

5.38

8.41

9.41

9.41

9.41

9.41

9.41

9.41

9.41

9.41

11.0

5.31

1.17

1.35

1.35

1.35

1.35

1.35

1.35

1.35

1.35

1.35

7.30

6.09 2.89

5.42

5.42

5.42

5.42

5.42

5.42

5.42

5.42

5.42

31.4

45.1

113

122

131

142

153

166

179

193

209

31.4

45.1

113

122

131

142

153

166

179

193

209

47.2

51.3

151

138

165

160

166

175

191

205

219

36.2

30.0

35.0

82.0

88.6

95.7

103

111

120

130

140

151

22.7

4.21

22.3

27.4

27.4

27.4

27.4

27.4

27.4

27.4

27.4

27.4

61.3
0.00
124
92.7
97.5

26.2
0.00
321
58.5
56.3

7.47
0.00
30.1
9.72
42.5

24.4
0.01
32.4
12.4
106

24.2
-0.04
34.4
11.4
112

25.4
-0.05
35.4
10.4
121

25.5
-0.09
36.4
9.40
128

27.4
-0.04
37.4
8.40
138

30.7
0.24
36.4
7.40
151

32.2
0.52
35.4
6.40
162

33.4
0.86
34.4
5.40
173

34.0
1.21
33.4
4.40
185

44.9
n/a

17.1
n/a

16.3
n/a

69.8
n/a

50.1
25.9

69.3
44.0

56.9
31.4

55.2
27.8

54.8
24.2

61.4
29.2

64.6
31.2

67.8
33.8

(Mil $)

Inventory Turnover Ratio
Account Receivable Days
Other Current Assets as % of
Revenue (%)
Account Payable Days
Accrued Liabilities as a % of
Revenues (%)
Other Assets as % of Revenue (%)
Other Liabilities as % of Revenue
(%)

Electric Powertrain Components
46.9
Revenue (Mil $)
Electric Powertrain Components 46.9
Revenue ($ Mil)
Total Revenues (Mil $)
81.1
Expenses
Direct Expenses (Mil $)
Powertrain Components & Sales
Gross Profit Margin (%)
Indirect Expenses (Mil $)
Effective Taxes ($ Bil)
SG&A as % of Gross Profits (%)
R&D as a % of Revenues (%)
Total Expenses (Mil $)
Adjusted EBITDA (Mil $)
Free Cash Flow (Mil $)

TREFIS ANALYSIS for TESLA MOTORS

CONTENT@TREFIS.COM

20.7
20.7

+ 1 617 394 8763

13.5
13.5

12.6
12.6

•34

Detailed P&L for the Development Services
business
The most important drivers for the Development Services business are discussed above, here is the detailed P&L.
Development Services: Detailed P&L
Revenues
Model S Capex allocation (Mil $)
Model S Capex allocation ($ Mil)
Model S NWC & NOA allocation
(Mil $)

Inventory Turnover Ratio
Account Receivable Days
Other Current Assets as % of
Revenue (%)
Account Payable Days
Accrued Liabilities as a % of
Revenues (%)
Other Assets as % of Revenue (%)
Other Liabilities as % of Revenue
(%)

2011

2012

2013

2014 2015

2016 2017

2018

2019 2020 2021

2022

50.2
50.2

16.0
16.0

2.06
2.06

1.71
1.71

1.13
1.13

1.67
1.67

0.79
0.79

0.59
0.59

0.67
0.67

-9.55 -2.06 0.10

0.23

-0.29 0.05

-0.15 -0.09 -0.08 -0.07 -0.07 -0.06

89.5
17.0

237
23.7

61.7
8.90

108
25.9

98.8
25.9

108
25.9

103
25.9

103
25.9

103
25.9

103
25.9

103
25.9

103
25.9

4.61

2.04

1.37

2.96

2.96

2.96

2.96

2.96

2.96

2.96

2.96

2.96

100

267

55.1

88.8

98.8

103

103

103

103

103

103

103

15.7

9.63

5.38

8.41

9.41

9.41

9.41

9.41

9.41

9.41

9.41

9.41

11.0

5.31

1.17

1.35

1.35

1.35

1.35

1.35

1.35

1.35

1.35

1.35

7.30

6.09 2.89

5.42

5.42

5.42

5.42

5.42

5.42

5.42

5.42

5.42

27.6

15.7

5.63

6.20

6.82

7.50

8.25

9.07

9.98

11.0

12.1

55.7

27.6

15.7

5.63

6.20

6.82

7.50

8.25

9.07

9.98

11.0

12.1

96.3

41.5

17.9

7.57

7.04

8.53

8.44

8.94

9.58

10.7

11.6

12.7

27.2

11.5

13.4

6.67

5.48

5.83

6.03

6.23

6.39

6.53

6.64

6.94

51.2

58.2

15.0

-18.5 11.5

14.5

19.5

24.5

29.5

34.5

39.5

42.5

72.8
0.00
124
92.7
100

23.0
0.00
321
58.5
34.6

2.60
0.00
30.1
9.72
16.0

1.21
0.01
32.4
12.4
7.89

1.23
-0.04
34.4
11.4
6.71

1.31
-0.05
35.4
10.4
7.14

1.34
-0.09
36.4
9.40
7.37

1.47
-0.04
37.4
8.40
7.69

1.68
0.24
36.4
7.40
8.07

1.79
0.52
35.4
6.40
8.33

1.89
0.86
34.4
5.40
8.53

1.96
1.21
33.4
4.40
8.90

69.2
n/a

29.9
n/a

4.52
n/a

0.89
n/a

1.56
0.33

2.71
1.40

2.41
1.06

2.72
1.25

3.19
1.51

4.13
2.33

4.99
3.10

5.74
3.78

Development Services Revenues (Mil 55.7
$)
Development Services Revenues
($ Mil)

Total Revenues (Mil $)
Expenses
Direct Expenses (Mil $)
Development Services Gross
Profit Margin (%)
Indirect Expenses (Mil $)
Effective Taxes ($ Bil)
SG&A as % of Gross Profits (%)
R&D as a % of Revenues (%)
Total Expenses (Mil $)
Adjusted EBITDA (Mil $)
Free Cash Flow (Mil $)

TREFIS ANALYSIS for TESLA MOTORS

CONTENT@TREFIS.COM

1.09
1.09

+ 1 617 394 8763

0.75
0.75

0.72
0.72

•35


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