Tesla Inc.

Company Valuation
A Detailed Walkthrough
Tesla Valuation - Sources
1 10 Year Treasury Yield https://www.cnbc.com/quotes/?symbol=US10Y

Tesla’s Beta, Share Price https://finance.yahoo.com/quote/TSLA/

2 https://finance.yahoo.com/quote/tsla/key-statistics/
Shares Outstanding
3 Tesla’s Yield to Maturity https://www.bondsupermart.com/main/bond-info/bond-factsheet/USU8810LAA18

4 Corporate Tax Rates https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Tax/dttl-tax-corporate-tax-rates.pdf

https://ir.tesla.com/sec-
5 Tesla’s Annual Reports (10k Filings) filings?field_nir_sec_form_group_target_id%5B%5D=471&field_nir_sec_date_filed_value&items_per_page=50

6 Tesla’s Sales Volumes https://www.statista.com/statistics/502208/tesla-quarterly-vehicle-deliveries/

https://insideevs.com/news/391128/tesla-model-3-cumulative-sales-
7 Model 3 Sales’ Volume Estimate best/#:~:text=In%202019%2C%20Tesla%20achieved%20an,of%20all%20cars%20since%202008

Tesla Vehicle Production Deliveries

8 https://ir.tesla.com/news-releases/news-release-details/tesla-q1-2020-vehicle-production-deliveries
Estimate 2020
9 Annual Vehicle Deliveries - Comparables https://www.statista.com/statistics/225326/amount-of-cars-sold-by-general-motors-worldwide/

Solar Views Price Table Tesla Semi Roadster 2

https://insideevs.com/news/317916/comparing-a-base-tesla-model-s-to-a-fully-loaded-model-s-performance-
10 Average Prices for Tesla plus-version-whats-the-price-d/
https://www.reuters.com/article/us-pepsico-tesla-orders-idUSKBN1E61FB

Annual Reports: BMW; Daimler; FCA; Companies’ websites

11
Ferrari; Ford; GM; Jaguar; Paccar; VW
Inputs
 Tesla Valuation – Drivers
Data Validation >> List >> Values: 1,2,3
Drivers

Selected case 2
Company Tesla
Currency USD
Domestic country United States
10-year treasury yield (Sep 18 2020) 0.70%
Market risk premium US 5%
Company beta (Dec 15 2020) 2.15
Tesla share price (Dec 15 2020) 639.83
Bond Yield (Sep 18 2020) 4.32%
Corporate tax rate 21%
Expected inflation 2%

A “Drivers” sheet helps

us organize some inputs
we will need when
working on the valuation
model.
 Tesla Valuation – Inputs

The “Input” section is where we

place Tesla’s historical financial
statements for the past 5 years.
These will form the basis for our
10-year forecast model along with
inputs from the “Drivers” sheet.
Workings
Tesla Valuation – Workings Section

The “Workings” sheet serves as a section divider in our

model. It helps us distinguish the model’s inputs and its
calculation sheets. This makes things easier and clearer
for other people working with the model.

The “Workings” section of

the model is further
divided into “Income
Statement Items” and
“Balance Sheet Items”.

The Income Statement The Balance Sheet

section has 3 sub- section also has 3 sub-
sections: sections:
• Automotive; • PP&E;
• Energy & Other; and • Working Capital; and
• Operating expenses. • Financing.
 Tesla Valuation – Deliveries

Deliveries

Tesla Deliveries
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Vehicle Act Act Act Act Act Fcst Fcst Fcst Fcst Fcst
Tesla Model 3 - - 1,764 146,055 300,815 481,304 529,434 582,378 628,968 679,286
Tesla Model S and X 50,580 76,230 101,312 98,865 66,385 69,040 71,802 74,674 77,661 80,768
Tesla Model Y - - - - - 1,764 146,055 300,815 481,304 529,434
Tesla Roadster 2 - - - - - - - 500 1,000 1,500
Tesla Pickup - - - - - - 250 20,699 42,633 68,212
Tesla Semi - - - - - - 250 20,699 42,633 68,212
Total 50,580 76,230 103,076 244,920 367,200 552,108 747,791 999,766 1,274,198 1,427,411
y-o-y growth %
Tesla Model 3 n.a. n.a. n.a. 8180% 106% 60% 10% 10% 8% 8%
Tesla Model S and X n.a. 51% 33% -2% -33% 4% 4% 4% 4% 4%
Tesla Model Y n.a. n.a. n.a. n.a. n.a. n.a. 8180% 106% 60% 10%
Tesla Roadster 2 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 100% 50%
Tesla Pickup We analyzed
n.a.Tesla’s historical
n.a. deliveries
n.a. of three n.a.
main groupsn.a. of products:n.a. n.a. 8180% 106% 60%
Tesla Semi • Model S and Model X
n.a. – established
n.a. n.a. models with
n.a. strong market
n.a. n.a. n.a. 8180% 106% 60%
performance;
• Model 3 – a new model with fast-growing sales, which went into
production fairly recently;
• Other vehicles to be released in the future (Tesla Semi, Model Y etc.)
 Tesla Valuation – Deliveries Forecast

I5 =H5*(1+I15)

Deliveries

Tesla Deliveries
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Vehicle Act Act Act Act Act Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst
Tesla Model 3 - - 1,764 146,055 300,815 481,304 529,434 582,378 628,968 679,286 706,457 734,715 764,104 794,668 826,455
Tesla Model S and X 50,580 76,230 101,312 98,865 66,385 69,040 71,802 74,674 77,661 80,768 83,998 87,358 90,852 94,487 98,266
Tesla Model Y - - - - - 1,764 146,055 300,815 481,304 529,434 582,378 628,968 679,286 706,457 734,715
Tesla Roadster 2 - - - - - - - 500 1,000 1,500 1,650 1,815 1,960 2,117 2,202
Tesla Pickup - - - - - - 250 20,699 42,633 68,212 75,033 82,537 89,139 96,271 100,121
Tesla Semi - - - - - - 250 20,699 42,633 68,212 75,033 82,537 89,139 96,271 100,121
Total 50,580 76,230 103,076 244,920 367,200 552,108 747,791 999,766 1,274,198 1,427,411 1,524,549 1,617,929 1,714,481 1,790,270 1,861,881
y-o-y growth % 1st 3 years Growth Pattern
Tesla Model 3 n.a. n.a. n.a. 8180% 106% 60% 10% 10% 8% 8% 4% 4% 4% 4% 4%
Tesla Model S and X n.a. 51% 33% -2% -33% 4% 4% 4% 4% 4% 4% 4% 4% 4% 4%
Tesla Model Y n.a. n.a. n.a. n.a. n.a. n.a. 8180% 106% 60% 10% 10% 8% 8% 4% 4%
Tesla Roadster 2 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 100% 50% 10% 10% 8% 8% 4%
Tesla Pickup n.a. n.a. n.a. n.a. n.a. n.a. n.a. 8180% 106% 60% 10% 10% 8% 8% 4%
Tesla Semi n.a. n.a. n.a. n.a. n.a. n.a. n.a. 8180% 106% 60% 10% 10% 8% 8% 4%

Assumed growth after introduction: Then, we used this data to project year-on-year growth rates:
2 years
2 years
10%
8%
• For established models we assumed 4% growth;
onwards 4% • For new models we assumed an introductory period of 3 years, largely
mimicking Model 3’s development (including forecasts for Q1 and Q2 in 2020);
• Then a gradual decline for a 4-year period until a “normal” growth rate of 4% is
reached
Tesla Valuation – Deliveries Comparables

Roadsters and trucks, though

part of the peer group in the
reminder of the model for
other purposes (such as
profitability) have not been
considered in this case.

We took average vehicle deliveries over the past

5 years for several of Tesla’s more established
peers.
Clearly, our 10-year production forecast appear
to be on the conservative side.
 Tesla Valuation – Revenue Forecast

O5 =($R5*Deliveries!O5)*O14/1000000
Revenue Automotive H14 =CHOOSE(Drivers!$C$3,H22,H30,H38)

Tesla Revenue Automotive (in mln $)

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Vehicle Act Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Average Price ($)
Tesla Model 3 14,706 26,066 28,672 31,540 34,063 36,788 38,259 39,790 41,381 43,037 44,758 54,157
Tesla Model S and X 6,115 7,046 7,328 7,621 7,926 8,243 8,572 8,915 9,272 9,643 10,028 102,053
Tesla Model Y - 108 8,909 18,350 29,360 32,295 35,525 38,367 41,436 43,094 44,818 61,000
Tesla Roadster 2 - - - 113 225 338 371 408 441 476 495 225,000
Tesla Pickup - - 15 1,209 2,490 3,984 4,382 4,820 5,206 5,622 5,847 58,400
Tesla Semi - - 44 3,622 7,461 11,937 13,131 14,444 15,599 16,847 17,521 175,000
Total 20,821 33,219 44,968 62,454 81,523 93,584 100,241 106,744 113,336 118,719 123,468
Sel ected case
Tesla Model 3 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Tesla Model S and X 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Tesla Model Y 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Tesla Roadster 2 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Tesla Pickup 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% To project
Tesla Semi 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
revenue, we
Best case obtained average
Tesla Model 3 102% 102% 102% 102% 102% 102% 102% 102% 102% 102%
Tesla Model S and X 102% 102% 102% 102% 102% 102% 102% 102% 102% 102% prices through
Tesla Model Y 102% 102% 102% 102% 102% 102% 102% 102% 102% 102% research and
Tesla Roadster 2 102% 102% 102% 102% 102% 102% 102% 102% 102% 102%
Tesla Pickup 102% 102% 102% 102% 102% 102% 102% 102% 102% 102% multiplied them
Using the Choose function, we could
Tesla Semi 102% 102% 102% 102% 102% 102% 102% 102% 102% 102%
by expected
further enhance the agility of the model
Base case delivery
Tesla Model 3
by introducing Base, Best
100%
and Worst
100% 100% 100% 100% 100% 100% 100% 100% 100%
Tesla Model S case
and X scenarios, whereby prices 100%
100% 100% 100% 100% 100% 100% 100% 100% 100%
Tesla Model Y 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Tesla Roadsterincreased
2 or decreased100%
(by 2%). 100% 100% 100% 100% 100% 100% 100% 100% 100%

Note: while the prices are given in USD at par, total revenues are given in millions USD as are all the financials going forward.
 Tesla Valuation – Margins Automotive

GP %

Comparables 2019

GP % GP % GP %
Vehicle Comparable companies Comp. 1 Comp. 2 Comp. 3 Average In forecasting gross
Tesla Model 3 GM, Ford, Fiat Chrysler 18.7% 14.3% 13.9% 22.3% Historic profit margins, we took
Tesla Model S and X BMW, Mercedes Cars, Volkswagen 15.5% 18.3% 17.2% 22.3% Historic historic margins for the
Tesla Model Y GM, Ford, Fiat Chrysler 18.7% 14.3% 13.9% 15.6% Comparables models already in
Tesla Roadster 2 Jaguar, Porsche, Ferrari 36.0% 44.0% 52.3% 44.1% Comparables production. These are
Tesla Pickup GM, Ford, Fiat Chrysler 18.7% 14.3% 13.9% 15.6% Comparables unique to Tesla’s
Tesla Semi Scania, MAN, Paccar 23.0% 23.0% 14.6% 20.2% Comparables circumstances and
hence a good predictor.
Historical
For the rest of the
Vehicle Historic Average GP%
models we studied
Tesla Model 3 22%
Tesla Model S and X 22%
competitors’ gross profit
Tesla Model Y n.a. margins.
Tesla Roadster 2 n.a.
Tesla Pickup n.a.
Tesla Semi n.a.
 Tesla Valuation – Gross Profit Automotive
Gross Profit H14 =CHOOSE(Drivers!$C$3,H22,H30,H38) O5 =O14*'Revenue automotive'!O5

Tesla Gross Profit (in mln $)

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Vehicle Act Act Act Act Act Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst
Tesla Model 3 n.a. n.a. n.a. n.a. n.a. 5,824 6,407 7,047 7,611 8,220 8,549 8,891 9,246 9,616 10,001
Tesla Model S and X n.a. n.a. n.a. n.a. n.a. 1,574 1,637 1,703 1,771 1,842 1,915 1,992 2,072 2,155 2,241
Tesla Model Y - - - - - 17 1,394 2,870 4,592 5,052 5,557 6,001 6,481 6,741 7,010
Tesla Roadster 2 - - - - - - - 50 99 149 164 180 194 210 218
Tesla Pickup - - - - - - 2 189 389 623 685 754 814 879 915
Tesla Semi - - - - - - 9 732 1,508 2,413 2,654 2,920 3,154 3,406 3,542
Total 918 1,601 2,209 4,341 4,423 7,415 9,449 12,591 15,971 18,298 19,524 20,738 21,962 23,007 23,927
Selected case
Tesla Model 3 22% 22% 22% 22% 22% 22% 22% 22% 22% 22% 22%
Tesla Model S and X 22% 22% 22% 22% 22% 22% 22% 22% 22% 22% 22%
Tesla Model Y
We also allowed for a Base-Best- 16% 16% 16% 16% 16% 16% 16% 16% 16% 16% 16%
Tesla Roadster 2 Worst case scenario with higher 44% 44% 44% 44% 44% 44% 44% 44% 44% 44% 44%
Tesla Pickup 16% 16% 16% 16% 16% 16% 16% 16% 16% 16% 16%
Tesla Semi
and lower gross profit margins 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20%
respectively
Best case
Tesla Model 3 24% 24% 24% 24% 24% 24% 24% 24% 24% 24% 24%
Tesla Model S and X 24% 24% 24% 24% 24% 24% 24% 24% 24% 24% 24%
Tesla Model Y 17% 17% 17% 17% 17% 17% 17% 17% 17% 17% 17%
Tesla Roadster 2 46% 46% 46% 46% 46% 46% 46% 46% 46% 46% 46%
Tesla Pickup 17% 17% 17% 17% 17% 17% 17% 17% 17% 17% 17%
Tesla Semi 22% 22% 22% 22% 22% 22% 22% 22% 22% 22% 22%
Then to obtain gross profit, we
Base case
Tesla Model 3
used: 22% 22% 22% 22% 22% 22% 22% 22% 22% 22% 22%
Tesla Model S and X Gross Profit = Revenues * GP% 22% 22% 22% 22% 22% 22% 22% 22% 22% 22% 22%
Tesla Model Y 16% 16% 16% 16% 16% 16% 16% 16% 16% 16% 16%
Tesla Roadster 2 44% 44% 44% 44% 44% 44% 44% 44% 44% 44% 44%
 Tesla Valuation – Cost of Sales

To calculate cost of sales:

O5 =-('Revenue automotive'!O5-'GP automotive'!O5)
Cost of sales automotive Cost of sales = - (Revenues – Margins)
Tesla Cost of sales (in mln $)
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Vehicle Act Act Act Act Act Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst
Tesla Model 3 n.a. n.a. n.a. n.a. n.a. (20,242) (22,266) (24,492) (26,452) (28,568) (29,711) (30,899) (32,135) (33,420) (34,757)
Tesla Model S and X n.a. n.a. n.a. n.a. n.a. (5,471) (5,690) (5,918) (6,155) (6,401) (6,657) (6,923) (7,200) (7,488) (7,788)
Tesla Model Y - - - - - (91) (7,516) (15,480) (24,767) (27,244) (29,968) (32,366) (34,955) (36,353) (37,807)
Tesla Roadster 2 - - - - - - - (63) (126) (189) (208) (228) (247) (266) (277)
Tesla Pickup - - - - - - (12) (1,020) (2,100) (3,360) (3,697) (4,066) (4,391) (4,743) (4,933)
Tesla Semi - - - - - - (35) (2,890) (5,952) (9,524) (10,476) (11,524) (12,446) (13,442) (13,979)
Total (2,823) (4,750) (7,433) (14,174) (16,398) (25,804) (35,519) (49,862) (65,552) (75,286) (80,716) (86,006) (91,374) (95,712) (99,541)
 Tesla Valuation – Revenue Energy & Other
H10 =CHOOSE(Drivers!$C$3,H14,H17,H20)
O7 =N7*(1+O10)

Revenue Energy & Other

Tesla Revenue Energy & Other (in mln $)

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
($ in million) Act Act Act Act Act Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst
Energy generation and storage 14 181 1,116 1,555 1,531 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
Services and other 291 468 1,001 1,391 2,226 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
Total Energy and Other 305 649 2,117 2,946 3,757 4,433 4,965 5,362 5,684 6,025 6,387 6,770 7,176 7,607 8,063
Selected case
Total Energy and Other 18% 12% 8% 6% 6% 6% 6% 6% 6% 6%

Y-o-Y %
Best case
Total Energy and Other 20% 14% 10% 8% 8% 8% 8% 8% 8% 8%

Base case
Total Energy and Other 113% 226% 39% 28% 18% 12% 8% 6% 6% 6% 6% 6% 6% 6%

Worst case
Total Energy and Other 16% 10% 6% 4% 4% 4% 4% 4% 4% 4%

As revenues from energy, services and other sources was

only a fraction of total revenue, we only forecast the total.
We forecast a declining growth rate (as per historic trend).
 Tesla Valuation – Margins Energy & Other
H11 =CHOOSE(Drivers!$C$3,H14,H18,H21) O7 =O11*'Revenue Energy & Other'!O7

Gross Profit Energy & Other

Tesla GP% Energy and Other (in mln $)

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2025 2027 2028 2029
($ in million) Act Act Act Act Act Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst
Energy generation and storage 2 3 242 190 190 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
Services and other 4 (4) (228) (489) (544) n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
Total Energy and Other 6 (1) 14 (299) (354) - - - - - - - - - -

Selected case
Total Energy and Other 2% 0% 1% -10% -9% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%

GP% We looked at past GP margins to

Best case 2% 2% 2% 2% 2% 2% 2% 2% 2% 2%
Total Energy and Other forecast gross profits for that
revenue stream. Those were
Base case
Total Energy and Other
historically negative but our base 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
assumption became that Tesla
Worst case
Total Energy and Other
would achieve 0% margins over the -2% -2% -2% -2% -2% -2% -2% -2% -2% -2%
forecast period.
Tesla Valuation – Opex Comparables

Opex comparables

Comparables - 2019

Company Average Adj. Average

GM 15% 15%
Ford 13% 13%
We studied a select group of
Fiat Chrysler 9% 9%
BMW 10% 10% competitors’ operating expenses as
Volkswagen 11% 11% a share of revenue. We excluded
Jaguar 37% certain outliers to balance our
Porsche 31% 31% assumption.
Ferrari 28%
Scania 15% 15%
MAN 15% 15%
Paccar 4% 4%
Average 17% 14%

D18 =AVERAGE(D7:D17)
 Tesla Valuation – Opex
H10 =CHOOSE(Drivers!$C$3,H14,H17,H20) O5 ='Revenue Energy & Other'!O7+'Revenue automotive'!O11

O7 =O5*O6
Opex

Tesla Opex (in mln $)

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
($ in million) Act Act Act Act Act Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst
Revenues 4,046 7,000 11,759 21,461 24,578 37,652 49,933 67,816 87,208 99,609 106,627 113,514 120,512 126,326 131,531
Opex as a % of revenues -40.5% -32.4% -32.8% -20.6% -16.8% -13.7% -13.7% -13.7% -13.7% -13.7% -13.7% -13.7% -13.7% -13.7% -13.7%
Opex (1,640) (2,267) (3,855) (4,430) (4,138) (5,147) (6,826) (9,271) (11,922) (13,617) (14,576) (15,518) (16,475) (17,269) (17,981)

Selected case
Opex as a % of revenue -14% -14% -14% -14% -14% -14% -14% -14% -14% -14%

Opex % We calculated Opex as a % of

Best case Revenues
Opex as a % of revenue -12% -12% -12% -12% -12% -12% -12% -12% -12% -12%
And we allowed for scenario
Base case planning here as well with the
Opex as a % of revenue -14% -14% -14% -14% -14% -14% -14% -14% -14% -14%
Base case assuming an
Worst case average Opex as % of revenue
Opex as a % of revenue -16% -16% -16% -16% -16% -16% -16% -16% -16% -16%
as per our peer group.

H17 =-'Opex comparables'!$D$18

 Tesla Valuation – PP&E Comparables

PP&E comparables

Comparables - 2019

CAPEX as a % of PP&E CAPEX as a % of revenues

Company Average Adj. Average Average Adj. Average
GM -20% -20% -6% -6%
Ford -21% -21% -5% -5% We studied competitors’ capital expenditures and
Fiat Chrysler -29% -29% -8% -8% used the results to project Capex for Tesla either as
BMW -30% -30% -7% -7%
a share of beginning PP&E or as a share of
Mercedes -19% -19% -4% -4%
Volkswagen -22% -22% -6% -6%
revenue.
Jaguar -24% -24% -7% -7%
Ferrari -33% -33% -9% -9%
Paccar -20% -20% -2%
Average -24% -24% -6% -6%

D16 =AVERAGE(D7:D15) G16 =AVERAGE(G7:G15)

 Tesla Valuation – Fixed Asset Roll Forward
B3 ="Selected case:"&CHOOSE(C3," as a % of PPE"," as a % of revenue") O7 =N10

Fixed asset roll forward H32 =CHOOSE(Drivers!$C$3,H36,H39,H42)

H33 =CHOOSE(Drivers!$C$3,H37,H40,H43) O10 =SUM(O7:O9)
H8 =CHOOSE($C$3,H32*H7,H33*Opex!H5)
Selected case: as a % of PPE 1
Tesla PP&E (in mln $)
31Dec2015 31Dec2016 31Dec2017 31Dec2018 31Dec2019 31Dec2020 31Dec2021 31Dec2022 31Dec2023 31Dec2024 31Dec2025 31Dec2026 31Dec2027 31Dec2028 31Dec2029
($ in million) Act Act Act Act Act Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst
Beginning PP&E 738 3,403 5,983 10,028 11,330 10,396 12,912 16,037 19,919 24,740 30,727 38,164 47,401 58,873 73,122
Capex 3,088 3,527 5,681 3,204 1,220 2,516 3,125 3,881 4,821 5,988 7,437 9,237 11,472 14,249 17,698
D&A (423) (947) (1,636) (1,901) (2,154)
Ending PP&E 3,403 5,983 10,028 11,330 10,396 12,912 16,037 19,919 24,740 30,727 38,164 47,401 58,873 73,122 90,820

Selected case
Capex as a % of PP&E 24% 24% 24% 24% 24% 24% 24% 24% 24% 24%
Capex as a % of revenue Using Capex as % of beginning PP&E or 6% 6% 6% 6% 6% 6% 6% 6% 6% 6%
Capex %
Best case
revenues allows us to project expenditures.
Capex as a % of PP&E 19% 19% 19% 19% 19% 19% 19% 19% 19% 29%
Capex as a % of revenue 3% 3% 3% 3% 3% 3% 3% 3% 3% 9%
Base case We prepared our model in a way that allows
Capex as a % of PP&E 24% 24% 24% 24% 24% 24% 24% 24% 24% 24%
Capex as a % of revenue
us to choose whether to forecast Capex as 6% 6% 6% 6% 6% 6% 6% 6% 6% 6%
Worst case % of PP&E or as % of revenue.
Capex as a % of PP&E 29% 29% 29% 29% 29% 29% 29% 29% 29% 19%
Capex as a % of revenue 9% 9% 9% 9% 9% 9% 9% 9% 9% 3%
We can also choose a Best, Base or Worst-
case scenario H39 =-'PP&E Comparables'!D16
H40 =-'PP&E Comparables'!G16
 Tesla Valuation – Fixed Asset Roll Forward

Fixed asset roll forward

Selected case: as a % of PPE 1

Tesla PP&E (in mln $)
31Dec2015 31Dec2016 31Dec2017 31Dec2018 31Dec2019 31Dec2020 31Dec2021 31Dec2022 31Dec2023 31Dec2024 31Dec2025 31Dec2026 31Dec2027 31Dec2028 31Dec2029
($ in million) Act Act Act Act Act Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst
Beginning PP&E 738 3,403 5,983 10,028 11,330 10,396 11,621 12,861 14,090 15,275 16,378 17,351 18,140 18,680 18,900
Capex 3,088 3,527 5,681 3,204 1,220 2,516 2,813 3,113 3,410 3,697 3,964 4,199 4,390 4,521 4,574
D&A (423) (947) (1,636) (1,901) (2,154) (1,291) (1,572) (1,884) (2,225) (2,594) (2,991) (3,411) (3,850) (4,302) (4,759)
Ending PP&E 3,403 5,983 10,028 11,330 10,396 11,621 12,861 14,090 15,275 16,378 17,351 18,140 18,680 18,900 18,714

Useful life Capex 10 We assumed useful life of 10 years for both O9 =O28
O10 =SUM(O7:O9)
Useful life historical assets 10 historic and newly acquired fixed assets
Tesla D&A (in mln $)
31Dec2015 31Dec2016 31Dec2017 31Dec2018 31Dec2019 31Dec2020 31Dec2021 31Dec2022 31Dec2023 31Dec2024 31Dec2025 31Dec2026 31Dec2027 31Dec2028 31Dec2029
($ in million) Act Act Act Act Act Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst
(1,040) (1,040) (1,040) (1,040) (1,040) (1,040) (1,040) (1,040) (1,040) (1,040)
(252) (252) (252) (252) (252) (252) (252) (252) (252) (252)
H17 =-$H$7/$C$13 (281) (281) (281) (281) (281) (281) (281) (281) (281)
To complete our Fixed Asset Roll Forward, H18 =-$H$8/$C$13 (311) (311) (311) (311) (311) (311) (311) (311)
we added a depreciation schedule that (341) (341) (341) (341) (341) (341) (341)
would allow us to correctly project ending (370) (370) (370) (370) (370) (370)
I17 =-$H$7/$C$13 K17 =-$H$7/$C$13(396) (396) (396) (396) (396)
property, plant & equipment values for the I18 =-$H$8/$C$13 J17 =-$H$7/$C$13 K18 =-$H$8/$C$13 (420) (420) (420) (420)
entire forecast period. I19=-$I$8/$C$12 J18 =-$H$8/$C$13 K19=-$I$8/$C$12 (439) (439) (439)
J19=-$I$8/$C$12 K20=-$J$8/$C$13 (452) (452)
J20=-$J$8/$C$13 K21=-$K$8/$C$12 (457)
Total D&A - - - - - (1,291) (1,572) (1,884) (2,225) (2,594) (2,991) (3,411) (3,850) (4,302) (4,759)

O28 =SUM(O17:O27)
 Tesla Valuation – Working Capital
NB !!! To develop the Working Capital sheet, we O5 =O11*('P&L'!O5)/360
O6 =-O12*('P&L'!O$6)/360
first began to build Tesla’s P&L, so we can have O7 =-O13*('P&L'!O$6)/360
Working capital revenues and COGS coming from one place O8 =O5+O6-O7

Tesla Working capital (in mln $)

31Dec2015 31Dec2016 31Dec2017 31Dec2018 31Dec2019 31Dec2020 31Dec2021 31Dec2022 31Dec2023 31Dec2024 31Dec2025 31Dec2026 31Dec2027 31Dec2028 31Dec2029
($ in million) Act Act Act Act Act Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst
Trade receivables 169 499 515 949 1,324 1,920 2,546 3,458 4,447 5,080 5,438 5,789 6,146 6,442 6,708
Inventory 1,278 2,067 2,264 3,113 3,552 8,353 11,184 15,257 19,680 22,463 24,063 25,631 27,226 28,543 29,727
Trade payables 916 1,860 2,390 3,404 3,771 7,667 10,265 14,003 18,063 20,617 22,086 23,525 24,989 26,198 27,284
Net trade cycle 531 706 389 658 1,105 2,607 3,465 4,712 6,065 6,926 7,415 7,895 8,383 8,788 9,150

Selected case:
DSO 15.0 25.7 15.8 15.9 19.4 18.4 18.4 18.4 18.4 18.4 18.4 18.4 18.4 18.4 18.4
DIO 147.3 137.8 85.4 64.3 62.3 99.5 99.5 99.5 99.5 99.5 99.5 99.5 99.5 99.5 99.5
DPO 105.6 124.0 90.2 70.4 66.2 91.3 91.3 91.3 91.3 91.3 91.3 91.3 91.3 91.3 91.3
Net trade cycle 56.7 39.5 11.0 9.9 15.5 26.5 26.5 26.5 26.5 26.5 26.5 26.5 26.5 26.5 26.5

We calculated historical DSO, DIO, To calculate Trade receivables in the forecast period:
H11 =AVERAGE($C11:$G11)
and DPO (we have done it in the H12 =AVERAGE($C12:$G12) DSO * Revenues / 360
Balance Sheet Input sheet) H13 =AVERAGE($C13:$G13) To calculate Inventory in the forecast period:
H14=H11+H12-H13 DIO * Cost of sales / 360
Then we used averages for the To calculate Trade payables in the forecast period:
forecast period. DPO * Cost of sales / 360
 Tesla Valuation – Financing
When the company produces a negative cash flow, it will need additional financing during the
forecast period.
Financing We assumed such additional financing is covered with 50% debt and 50% equity. These
percentages can be easily changed to test different hypothesis.
Cover negative cash flows with:
Debt 50% We also assumed that the cost of debt is equal to Tesla’s 10-year bond yield-to-maturity
Equity 50% (YTM) and remains constant throughout the entire forecast period.
Bond Yield as of Sep. 20 4.3%

Tesla Financing (in mln $)

31Dec2015 31Dec2016 31Dec2017 31Dec2018 31Dec2019 31Dec2020 31Dec2021 31Dec2022 31Dec2023 31Dec2024 31Dec2025 31Dec2026 31Dec2027 31Dec2028 31Dec2029
($ in million) Act Act Act Act Act Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst
Long-term debt and capital leases, net of current 2,021.1 5,860.0 9,415.7 9,403.7 11,634.0 11,634.0 11,634.0 11,634.0 11,634.0 11,634.0 11,634.0 11,634.0 11,634.0 11,634.0 11,634.0
Interest expense (118.9) (198.8) (471.3) (663.1) (685.0) (503.1) (503.1) (503.1) (503.1) (503.1) (503.1) (503.1) (503.1) (503.1) (503.1)
Interest rate -5.9% -3.4% -5.0% -7.1% -5.9% 4.3% 4.3% 4.3% 4.3% 4.3% 4.3% 4.3% 4.3% 4.3% 4.3%

Tesla Cash Flow (in mln $)

31Dec2015 31Dec2016 31Dec2017 31Dec2018 31Dec2019 31Dec2020 31Dec2021 31Dec2022 31Dec2023 31Dec2024 31Dec2025 31Dec2026 31Dec2027 31Dec2028 31Dec2029
Act Act Act Act Act Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst

Unlevered Free Cash Flow 3,312.1 3,729.4 5,618.0 6,593.0 5,528.1 4,593.3 4,961.8 5,446.9 5,686.9 6,112.0
Debt - - - - - - - - - -
Equity - - - - - - - - - -

NB !!! O11 =N11+N19

To develop the Financing sheet, we first needed H18 ='Cash Flow'!H20 O12 =-N11*O13
to calculate Unlevered Free Cash Flow (UFCF), H19 =IF(H$18<0,-H$18*$C4,0) O13 =$C$7
which necessitated the starting of both the Cash H20 =IF(H$18<0,-H$18*$C5,0)
Flow Statement and the Balance Sheet
 Tesla Valuation – WACC
From DRIVERS sheet
WACC

Risk-free rate 0.70%

We calculated Tesla’s cost of equity using
Market risk premium 5.00% the CAPM: We calculated the portions of debt
Beta (as of 27 Sep 2018) 2.15
Risk-free + Beta * Market risk premium and equity financing
Tax rate 21%

Cost of equity 11.4% O18 =O15/(O$15+O$16)

Current bond Yield as of 19th Sep 4.3%
And used its current YTM as cost of debt O19 =O16/(O$15+O$16)

C9 =C4+C5*C6
C10 =Drivers!C11 Tesla WACC calculation (in mln $)
31Dec2015 31Dec2016 31Dec2017 31Dec2018 31Dec2019 31Dec2020 31Dec2021 31Dec2022 31Dec2023 31Dec2024 31Dec2025 31Dec2026 31Dec2027 31Dec2028 31Dec2029
($ in million) Act Act Act Act Act Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst
Debt 2649 6844 10212 11971 13419 13,419 13,419 13,419 13,419 13,419 13,419 13,419 13,419 13,419 13,419
Equity 1084 5538 5235 5758 7467 8,861 10,536 12,762 15,563 18,864 22,376 26,102 30,039 34,174 38,474

Debt / (Debt + Equity) 71% 55% 66% 68% 64% 60% 56% 51% 46% 42% 37% 34% 31% 28% 26%
Equity / (Debt + Equity) 29% 45% 34% 32% 36% 40% 44% 49% 54% 58% 63% 66% 69% 72% 74%

Cost of equity 11.4% 11.4% 11.4% 11.4% 11.4% 11.4% 11.4% 11.4% 11.4% 11.4% 11.4% 11.4% 11.4% 11.4% 11.4%
Cost of debt 4.3% 4.3% 4.3% 4.3% 4.3% 4.3% 4.3% 4.3% 4.3% 4.3% 4.3% 4.3% 4.3% 4.3% 4.3%

WACC 5.7% 7.0% 6.1% 6.0% 6.3% 6.6% 6.9% 7.3% 7.7% 8.1% 8.4% 8.7% 9.0% 9.2% 9.4%

NB !!! O24 =O18*O22*(1-$C$7)+O19*O21

To obtain WACC, we needed projections of
debt and equity and so we could only prepare
our WACC sheet after completion of the WACC = E / (D+E) * Cost of equity + D / (D+E) * Cost of debt * (1-t)
Balance Sheet
Output
 Tesla Valuation – P&L

H5 ='Revenue automotive'!H11+'Revenue Energy & Other'!H7

H6 ='Cost of sales Energy & Other'!H7+'Cost of sales automotive'!H11

P&L

Tesla P&L (in mln $)

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
($ in million) Act Act Act Act Act Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst
Revenues 4,046 7,000 11,759 21,461 24,578 37,652 49,933 67,816 87,208 99,609 106,627 113,514 120,512 126,326 131,531
Cost of sales (3,123) (5,401) (9,536) (17,419) (20,509) (30,237) (40,484) (55,225) (71,236) (81,311) (87,103) (92,776) (98,550) (103,319) (107,604)
Gross profit 924 1,599 2,222 4,042 4,069 7,415 9,449 12,591 15,971 18,298 19,524 20,738 21,962 23,007 23,927
Operating expenses (1,640) (2,267) (3,855) (4,430) (4,138) (5,147) (6,826) (9,271) (11,922) (13,617) (14,576) (15,518) (16,475) (17,269) (17,981)
EBIT (717) (667) (1,632) (388) (69) 2,268 2,623 3,320 4,050 4,681 4,948 5,220 5,487 5,737 5,946
Interest expenses/income (159) (79) (577) (617) (596) (503) (503) (503) (503) (503) (503) (503) (503) (503) (503)
EBT (876) (746) (2,209) (1,005) (665) 1,765 2,120 2,817 3,546 4,178 4,445 4,717 4,984 5,234 5,443
Taxes (13) (27) (32) (58) (110) (371) (445) (592) (745) (877) (933) (991) (1,047) (1,099) (1,143)
Minority interest - 98 279 86 (87) - - - - - - - - - -
Net Income (889) (675) (1,961) (976) (862) 1,394 1,674 2,226 2,802 3,301 3,512 3,726 3,937 4,135 4,300

H12 =IF(H11>0,-H11*Drivers!$C$12,0)
We first filled in the P&L sheet up to EBIT, so that we have revenues and COGS in
one place. This enabled us to project working capital accounts with ease.

We then used EBIT to project unlevered free cash flows (UFCF), which helped us
project financing needs and, by extension, cost of financing

Finally, when we had derived debt financing costs (interest rate), we were able to
complete the P&L by calculating tax expenses and net profit
 Tesla Valuation – Balance Sheet
H6 =$G$6
H11 =$G$11
H12 =$G$12
H14 =$G$14
Balance Sheet

Tesla BS (in mln $)

31Dec2018 31Dec2019 31Dec2020 31Dec2021 31Dec2022 31Dec2023 31Dec2024 31Dec2025 31Dec2026 31Dec2027 31Dec2028 31Dec2029
Act Act Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst
($ in million) Assumption
Cash 3,686 6,268 9,183 12,515 17,735 23,931 29,062 33,257 37,822 42,871 48,161 53,875 Cash flow sheet
Restricted cash and securities 193 246 246 246 246 246 246 246 246 246 246 246 Stays flat
Trade receivables 949 1,324 1,920 2,546 3,458 4,447 5,080 5,438 5,789 6,146 6,442 6,708 Working capital sheet
Inventory 3,113 3,552 8,353 11,184 15,257 19,680 22,463 24,063 25,631 27,226 28,543 29,727 Working capital sheet
Prepaid expenses 366 713 867 1,150 1,561 2,008 2,293 2,455 2,614 2,775 2,909 3,028 Grows as a % of revenues
as a % of revenues 1.7% 2.9% 2.3% 2.3% 2.3% 2.3% 2.3% 2.3% 2.3% 2.3% 2.3% 2.3%
Operating lease vehicles 2,090 3,665 3,665 3,665 3,665 3,665 3,665 3,665 3,665 3,665 3,665 3,665 Stays flat
Solar energy systems leased 6,271 6,138 6,138 6,138 6,138 6,138 6,138 6,138 6,138 6,138 6,138 6,138 Stays flat
PP&E 11,330 10,396 11,621 12,861 14,090 15,275 16,378 17,351 18,140 18,680 18,900 18,714 PP&E sheet
Intangible assets 282 339 339 339 339 339 339 339 339 339 339 339 Stays flat
Other assets 1,460 1,668 2,558 3,392 4,607 5,925 6,767 7,244 7,712 8,187 8,582 8,936 Grows as a % of revenues
as a % of revenues 6.8% 6.8% 6.8% 6.8% 6.8% 6.8% 6.8% 6.8% 6.8% 6.8% 6.8% 6.8%
Total assets 29,740 34,309 44,890 54,036 67,097 81,654 92,431 100,197 108,095 116,273 123,925 131,377

We filled in the Balance Sheet assets with items we have

already forecasted (working capital and PP&E). O9 =O10*('P&L'!O$5)
We then modeled the rest as flat (not related to business O10 =AVERAGE($F$10:$G$10)
O15 =O16*('P&L'!O$5)
activities) or as growing in sync with revenues (related to O16 =AVERAGE($F$16:$G$16)
business activities).
Cash was initially left blank, and filled in last, upon
completion of the Cash Flow Statement.
 Tesla Valuation – Balance Sheet
H20 =H21*('P&L'!H$5) H24 =H25*('P&L'!H$5)
H21 =AVERAGE($F$21:$G$21) H25 =AVERAGE($F$25:$G$25)
H22 =H23*('P&L'!H$5) H26 =H27*('P&L'!H$5)
Balance Sheet H23 =AVERAGE($F$23:$G$23) H27 =AVERAGE($F$27:$G$27)

Tesla BS (in mln $)

31Dec2018 31Dec2019 31Dec2020 31Dec2021 31Dec2022 31Dec2023 31Dec2024 31Dec2025 31Dec2026 31Dec2027 31Dec2028 31Dec2029
Act Act Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst
($ in million) Assumption
Accounts payable 3,404 3,771 7,667 10,265 14,003 18,063 20,617 22,086 23,525 24,989 26,198 27,284 Working capital sheet
Accrued liabilities 2,094 2,905 4,062 5,387 7,317 9,409 10,747 11,504 12,247 13,002 13,629 14,191 Grows as a % of revenues
as a % of revenues 9.8% 11.8% 10.8% 10.8% 10.8% 10.8% 10.8% 10.8% 10.8% 10.8% 10.8% 10.8%
Deferred revenue 630 1,163 1,444 1,915 2,600 3,344 3,819 4,088 4,353 4,621 4,844 5,043 Grows as a % of revenues
as a % of revenues 2.9% 4.7% 3.8% 3.8% 3.8% 3.8% 3.8% 3.8% 3.8% 3.8% 3.8% 3.8%
Resale value guarantees 503 317 684 907 1,232 1,584 1,809 1,937 2,062 2,189 2,295 2,389 Grows as a % of revenues
as a % of revenues 2.3% 1.3% 1.8% 1.8% 1.8% 1.8% 1.8% 1.8% 1.8% 1.8% 1.8% 1.8%
Customer deposits 793 726 1,251 1,660 2,254 2,898 3,311 3,544 3,773 4,005 4,198 4,371 Grows as a % of revenues
as a % of revenues 3.7% 3.0% 3.3% 3.3% 3.3% 3.3% 3.3% 3.3% 3.3% 3.3% 3.3% 3.3%
Long-term debt 11,971 13,419 13,419 13,419 13,419 13,419 13,419 13,419 13,419 13,419 13,419 13,419 Financing sheet
Other liabilities 4,586 4,541 7,501 9,948 13,511 17,374 19,845 21,243 22,615 24,009 25,167 26,204 Grows as a % of revenues
as a % of revenues 21.4% 18.5% 19.9% 19.9% 19.9% 19.9% 19.9% 19.9% 19.9% 19.9% 19.9% 19.9%
Total liabilities 23,982 26,842 36,029 43,501 54,335 66,091 73,567 77,821 81,993 86,234 89,750 92,903
Equity 5,758 7,467 8,861 10,536 12,762 15,563 18,864 22,376 26,102 30,039 34,174 38,474

Total liabilities & equity 29,740 34,309 44,890 54,036 67,097 81,654 92,431 100,197 108,095 116,273 123,925 131,377

O29 =O30*('P&L'!H$5)
O30 =AVERAGE($F$30:$G$30)
Balance Sheet liabilities were filled in a similar fashion,
except there were no flat items to forecast.
Long-term debt and Equity accounts were initially left
blank, and filled in upon completion of the Finance sheet.
 Tesla Valuation – Cash Flow

H6 =IF(H5*Drivers!$C$12>0,-H5*Drivers!$C$12,0)
Cash Flow
H8=-'PP&E'!H9

Tesla Cash Flow (in mln $)

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
($ in million) Act Act Act Act Act Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst
EBIT (667) (1,632) (388) (69) 2,268 2,623 3,320 4,050 4,681 4,948 5,220 5,487 5,737 5,946
Operating taxes (21%) (27) (32) (58) (110) (476) (551) (697) (850) (983) (1,039) (1,096) (1,152) (1,205) (1,249)
NOPAT (694) (1,664) (446) (179) 1,792 2,072 2,623 3,199 3,698 3,909 4,124 4,335 4,532 4,697
Add-back D&A 947 1,636 1,901 2,154 1,291 1,572 1,884 2,225 2,594 2,991 3,411 3,850 4,302 4,759
Gross Cash Flow 253 (28) 1,455 1,975 3,083 3,644 4,507 5,424 6,293 6,900 7,535 8,185 8,834 9,457
Trade receivables (330) (16) (434) (375) (596) (626) (912) (989) (632) (358) (351) (357) (296) (265)
Inventory (790) (196) (850) (439) (4,801) (2,831) (4,072) (4,423) (2,783) (1,600) (1,567) (1,595) (1,317) (1,184)
Accounts payable 944 530 1,014 367 3,896 2,598 3,738 4,060 2,555 1,469 1,439 1,464 1,209 1,086
Investments in Working Capital (176) 318 (269) (447) (1,502) (859) (1,247) (1,352) (861) (489) (480) (488) (405) (363)
Capex (3,527) (5,681) (3,204) (1,220) (2,516) (2,813) (3,113) (3,410) (3,697) (3,964) (4,199) (4,390) (4,521) (4,574)
Other assets (8,700) (1,760) 1,820 (2,108) (1,044) (1,117) (1,627) (1,764) (1,128) (638) (626) (637) (529) (473)
Other liabilties 5,002 2,397 (2,212) 1,046 5,291 4,874 7,097 7,696 4,922 2,785 2,733 2,777 2,307 2,066
Unlevered Free Cash Flow (7,147) (4,753) (2,410) (754) 3,312 3,729 5,618 6,593 5,528 4,593 4,962 5,447 5,687 6,112

Cash flow calculation: O11 =-('Balance Sheet'!O7-'Balance Sheet'!N7)

1. Calculate Operating taxes, to obtain NOPAT (Net Operating Profit After Tax); O12 =-('Balance Sheet'!O8-'Balance Sheet'!N8)
O13 ='Balance Sheet'!O19-'Balance Sheet'!N19
2. Add back D&A (non-cash charge) to obtain Gross Cash Flow;
3. Calculate investments in working capital.

BEWARE! An increase in assets is a negative cash flow.

An increase in liabilities is a positive cash flow.
 Tesla Valuation – Cash Flow
H17 =-('Balance Sheet'!H6-'Balance Sheet'!G6)-('Balance Sheet'!H9-'Balance Sheet'!G9)-
('Balance Sheet'!H11-'Balance Sheet'!G11)-('Balance Sheet'!H12-'Balance Sheet'!G12)-
Cash Flow ('Balance Sheet'!H14-'Balance Sheet'!G14)-('Balance Sheet'!H15-'Balance Sheet'!G15)
H16 =-'PP&E'!H8

Tesla Cash Flow (in mln $)

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
($ in million) Act Act Act Act Act Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst
EBIT (667) (1,632) (388) (69) 2,268 2,623 3,320 4,050 4,681 4,948 5,220 5,487 5,737 5,946
Operating taxes (21%) (27) (32) (58) (110) (476) (551) (697) (850) (983) (1,039) (1,096) (1,152) (1,205) (1,249)
NOPAT (694) (1,664) (446) (179) 1,792 2,072 2,623 3,199 3,698 3,909 4,124 4,335 4,532 4,697
Add-back D&A 947 1,636 1,901 2,154 1,291 1,572 1,884 2,225 2,594 2,991 3,411 3,850 4,302 4,759
Gross Cash Flow 253 (28) 1,455 1,975 3,083 3,644 4,507 5,424 6,293 6,900 7,535 8,185 8,834 9,457
Trade receivables (330) (16) (434) (375) (596) (626) (912) (989) (632) (358) (351) (357) (296) (265)
Inventory (790) (196) (850) (439) (4,801) (2,831) (4,072) (4,423) (2,783) (1,600) (1,567) (1,595) (1,317) (1,184)
Accounts payable 944 530 1,014 367 3,896 2,598 3,738 4,060 2,555 1,469 1,439 1,464 1,209 1,086
Investments in Working Capital (176) 318 (269) (447) (1,502) (859) (1,247) (1,352) (861) (489) (480) (488) (405) (363)
Capex (3,527) (5,681) (3,204) (1,220) (2,516) (2,813) (3,113) (3,410) (3,697) (3,964) (4,199) (4,390) (4,521) (4,574)
Other assets (8,700) (1,760) 1,820 (2,108) (1,044) (1,117) (1,627) (1,764) (1,128) (638) (626) (637) (529) (473)
Other liabilties 5,002 2,397 (2,212) 1,046 5,291 4,874 7,097 7,696 4,922 2,785 2,733 2,777 2,307 2,066
Unlevered Free Cash Flow (7,147) (4,753) (2,410) (754) 3,312 3,729 5,618 6,593 5,528 4,593 4,962 5,447 5,687 6,112

Cash flow calculation continued: H18 =('Balance Sheet'!H20-'Balance

O20 =O9+O14+O17+O18+O16
4. Subtract capital investments; Sheet'!G20)+('Balance Sheet'!H22-'Balance
5. Subtract increase in other assets and add increase in other Sheet'!G22)+('Balance Sheet'!H24-'Balance
Sheet'!G24)+('Balance Sheet'!H26-'Balance
liabilities; Sheet'!G26)+('Balance Sheet'!H29-'Balance
6. Unlevered Free Cash Flow = Gross Cash Flow –(+) Investments Sheet'!G29)
in Working capital – Capex –(+) Changes in Other assets +(-)
Changes in Other liabilities
 Tesla Valuation – Cash Flow

Cash Flow

Tesla Cash Flow (in mln $)

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
($ in million) Act Act Act Act Act Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst
EBIT (667) (1,632) (388) (69) 2,268 2,623 3,320 4,050 4,681 4,948 5,220 5,487 5,737 5,946
Operating taxes (21%) (27) (32) (58) (110) (476) (551) (697) (850) (983) (1,039) (1,096) (1,152) (1,205) (1,249)
NOPAT (694) (1,664) (446) (179) 1,792 2,072 2,623 3,199 3,698 3,909 4,124 4,335 4,532 4,697
Add-back D&A 947 1,636 1,901 2,154 1,291 1,572 1,884 2,225 2,594 2,991 3,411 3,850 4,302 4,759
Gross Cash Flow 253 (28) 1,455 1,975 3,083 3,644 4,507 5,424 6,293 6,900 7,535 8,185 8,834 9,457
Trade receivables (330) (16) (434) (375) (596) (626) (912) (989) (632) (358) (351) (357) (296) (265)
Inventory (790) (196) (850) (439) (4,801) (2,831) (4,072) (4,423) (2,783) (1,600) (1,567) (1,595) (1,317) (1,184)
Accounts payable 944 530 1,014 367 3,896 2,598 3,738 4,060 2,555 1,469 1,439 1,464 1,209 1,086
Investments in Working Capital (176) 318 (269) (447) (1,502) (859) (1,247) (1,352) (861) (489) (480) (488) (405) (363)
Capex (3,527) (5,681) (3,204) (1,220) (2,516) (2,813) (3,113) (3,410) (3,697) (3,964) (4,199) (4,390) (4,521) (4,574)
Other assets (8,700) (1,760) 1,820 (2,108) (1,044) (1,117) (1,627) (1,764) (1,128) (638) (626) (637) (529) (473)
Other liabilties 5,002 2,397 (2,212) 1,046 5,291 4,874 7,097 7,696 4,922 2,785 2,733 2,777 2,307 2,066
Unlevered Free Cash Flow (7,147) (4,753) (2,410) (754) 3,312 3,729 5,618 6,593 5,528 4,593 4,962 5,447 5,687 6,112
Interest expenses (79) (577) (617) (596) (503) (503) (503) (503) (503) (503) (503) (503) (503) (503)
Delta Financial liabilities 4,195 3,368 1,759 1,448 - - - - - - - - - -
Delta equity/Other equity movements 5,129 1,658 1,499 2,571 - - - - - - - - - -
Tax adjustment - - - - 106 106 106 106 106 106 106 106 106 106
Minority interest 98 279 86 (87) - - - - - - - - - -
Net Cash Flow 2,196 (25) 318 2,582 2,915 3,332 5,221 6,196 5,131 4,196 4,564 5,050 5,290 5,715

To reconcile Unlevered Free Cash Flow and Net Cash Flow, we must consider all items
O22 ='P&L’!O10
related to the financial structure of the firm, including: O23 ='Balance Sheet’!O28-'Balance Sheet’!N28
7. Interest expense, changes in debt and equity financing, minority interest, O24 ='Balance Sheet’!O32-'Balance Sheet’!N32-'P&L’!O14
8. Adjust for the difference between taxes in the P&L and Operating taxes calculated here O25 ='P&L’!O12-O6
O26 ='P&L’!O13
 Tesla Valuation – DCF
We assumed a 2% perpetuity growth rate after the explicit forecast period.
Some industry practitioners use 3% alternatively.
This input is easily changed and tested.
DCF Valuation

g (Perpetuity growth) 2%
1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
($ in million) Act Act Act Act Act Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst
Unlevered Free Cash Flow 3,312 3,729 5,618 6,593 5,528 4,593 4,962 5,447 5,687 6,112
Continuing value 84,587

Discount factor (WACC) 6.6% 6.9% 7.3% 7.7% 8.1% 8.4% 8.7% 9.0% 9.2% 9.4%
Present value of UFCF 3,107 3,261 4,544 4,895 3,743 2,825 2,764 2,740 2,579 2,496
Present value of CV 34,539

Perpetuity Growth Rate-Based Valuation

Total PV of Cash Flows 32,954
O7 =Q6*(1+$C$3)/(Q9-C3)
Continuing Value 84,587 F14 =SUM(H10:Q10) Q11 =Q7/(1+Q9)^Q4
F15 =Q7 H10 =H6/(1+H9)^H4
PV of Continuing Value 34,539
Enterprise Value 67,493 F16 =Q11 L10 =L6/(1+L9)^L4
+Cash 6,268 F17 =F16+F14 O10 =O6/(1+O9)^O4
-Financial liabilities 13,419
Equity Value 60,342
Number of shares outstanding (as of 30 Sep 2020) 932
Price per share 64.7 Enterprise value calculation:
1. Calculate company Continuing Value (CV), which is what it will be worth after
the forecast period;
2. Discount unlevered free cash flows to their present value (PV);
3. Discount company CV to present value (what it is worth today);
4. Sum discounted cash flows and PV of continuing value.
 Tesla Valuation – DCF

DCF Valuation

g (Perpetuity growth) 2%
1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
($ in million) Act Act Act Act Act Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst
Unlevered Free Cash Flow 3,312 3,729 5,618 6,593 5,528 4,593 4,962 5,447 5,687 6,112
Continuing value 84,587

Discount factor (WACC) 6.6% 6.9% 7.3% 7.7% 8.1% 8.4% 8.7% 9.0% 9.2% 9.4%
Present value of UFCF 3,107 3,261 4,544 4,895 3,743 2,825 2,764 2,740 2,579 2,496
Present value of CV 34,539

Perpetuity Growth Rate-Based Valuation

Total PV of Cash Flows 32,954
Continuing Value 84,587
PV of Continuing Value 34,539 F17 =F16+F14
Enterprise Value 67,493
F18 ='Balance Sheet'!G5
+Cash 6,268
-Financial liabilities 13,419
F19 ='Balance Sheet'!G28
Equity Value 60,342 F20 =F17+F18-F19
Number of shares outstanding (as of 30 Sep 2020) 932
Price per share 64.7

Equity value and price per share calculation:

1. Calculate company Enterprise Value (EV), which is the PV of UFCF+CV;
2. Add present cash balance;
F22 =F20/F21 3. Subtract present long term liabilities;
4. This gives you intrinsic Equity Value at present.
5. Divide by the number of shares outstanding to obtain intrinsic share price.