General Overview Essay

18908 Words 76 Pages
April 18, 2013
Consumer Goods

Tesla Motors, Inc.
Ticker: TSLA

Recommendation: Buy

Current Price: $43.75

Implied Price: $50.88

Investment Thesis


Tesla offers a competitive product that takes advantage of the current global
“green” trend in an industry of heavy concern



Tesla is expanding in the United States and overseas while simultaneously offering new products that are already in high demand



Management has a proven history of success and is passionate about making Tesla a respected brand in the automobile industry



Tesla is beginning to become profitable and expand margins while growing at the same time



Tesla’s strategic partnerships with Daimler AG and Toyota position the
firm
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Entrepreneur/Inventor Elon Musk and four other associates founded Tesla in
2003. The company held its initial public offering on January 29 th of 2010. The firm became cash flow positive for the first time in history in Q4 of FY2012.
The business is broken into two separate segments; automotive sales and development services. Automotive sales are the main revenue driver making up nearly 90% of the firms revenue. Automotive Sales is broken into two subsections, Vehicle, Options and Related Sales and Powertrain Component and
Related Sales.
Vehicle, Options and Related Sales consists of sales from their automobiles. The company currently has two products; the Tesla Roadster and the Model S. The
Tesla Roadster, which was considered the first fully electric sports car, is not produced by the company anymore but is still sold in the market. In 2012 the company released the Model S, which is considered a luxury sedan. The Model
S is Tesla’s main revenue driver and is expected to set record sales in FY2013.
Recently Tesla announced the release of the Model X, a fully electric crossover vehicle. Management has spoken about working on bringing a new and cheaper
Model S to the market after they deliver the Model X. We predict that this model will be released to the market sometime around 2017-2018.
Powertrain Component and Related Sales is the sale of Tesla designed

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