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

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