DOCSLIB.ORG

A Work Project, Presented As Part of the Requirements for the Award of A

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
A Work Project, Presented As Part of the Requirements for the Award of A A Work Project, presented as part of the requirements for the Award of a Master Degree in Economics / Finance / Management from the NOVA – School of Business and Economics. TESLA INC. EQUITY RESEARCH A TECH COMPANY SELLING CARS MAXIME HOZE - 41397 A Project carried out on the Master in Finance Program, under the supervision of: Nuno Vasconcelos e Sá 04.01.2021 Abstract Tesla’s market capitalization of $669bn as of 2. Jan. 2021 is disconnected from reality and can in our view not be justified by fundamental analysis. The 52-week share price range of $70,10-$718,71 implies a story-driven valuation that has given Tesla’s share price the momentum to reach unprecedented heights. Independent of the current market valuation of Tesla we see the company with great potential for growth and innovation, as it expands its production facilities towards Europe and China and has promising developments in breakthrough battery technologies, which will permit it to keep its competitive advantages and establish itself as the continued market leader in the battery electric vehicle (BEV) market and an important player in the energy generation & storage market in the future. Having almost reached the milestone of 500.000 delivered vehicles in 2020 and with ambitious expansion projects underway, we estimate that Tesla could reach close to 2 million vehicle deliveries in 2025 and 3,7 million in 2035. We reach a price target for FY21 of $160,70 through the APV valuation method and weighing three possible outcome scenarios that are detailed in the report. Keywords (up to four) Equity Research – Automotive Sector – Electric Vehicle – Energy Sector This work used infrastructure and resources funded by Fundação para a Ciência e a Tecnologia (UID/ECO/00124/2013, UID/ECO/00124/2019 and Social Sciences DataLab, Project 22209), POR Lisboa (LISBOA-01-0145-FEDER-007722 and Social Sciences DataLab, Project 22209) and POR Norte (Social Sciences DataLab, Project 22209). This report is part of the Tesla Inc. Equity Research: 2020-2021_Fall_41397_Maxime_Hoze (annexed) and should be read as an integral part of it. MASTER IN FINANCE “TESLA INC.” COMPANY REPORT “AUTOMOTIVE & TECH SECTORS” JANUARY 4TH 2021 [email protected] TUDENTS AXIME OZE ATRICIO REXHAGEN S : “M H ; P D ” [email protected] A Tech Company Selling Cars Recommendation: SELL “A story driven valuation” Price Target FY21: 160.70$ Price (as of 3-Jan-21) 705.67 $ Reuters: TSLA. OQ, Bloomberg: TSLA § Tesla’s market capitalization of $669bn as of 2. Jan. 2021 is disconnected from reality and can in our view not be 52-week range (€) 718.72-70.10 justified by fundamental analysis. The 52-week share price range Market Cap (€m) 668,905 Outstanding Shares (m) 947.9 of $70,10-$718,71 implies a story-driven valuation that has given Credit Rating (S&P, Moody’s) BB-, B2 Tesla’s share price the momentum to reach unprecedented ESG Rating (MSCI) A heights. Source: Capital IQ, Moody’s, MSCI § Independent of the current market valuation of Tesla we see the company with great potential for growth and innovation, 5Y Price Index (base 100= Jan 16) 2 000 250 1 800 as it expands its production facilities towards Europe and China 1 600 200 1 400 1 200 150 and has promising developments in breakthrough battery 1 000 800 100 600 technologies, which will permit it to keep its competitive 400 50 200 advantages and establish itself as the continued market leader in 0 0 Jul-16 Jul-17 Jul-18 Jul-19 Jul-20 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Apr-16 Oct-16 Apr-17 Oct-17 Apr-18 Oct-18 Apr-19 Oct-19 Apr-20 Oct-20 the battery electric vehicle (BEV) market and an important player Tesla (left axis) S&P 500 (right axis) in the energy generation & storage market in the future. Source: Yahoo Finance § Having almost reached the milestone of 500.000 (Values in € millions) 2019 2020E 2021F delivered vehicles in 2020 and with ambitious expansion projects ReVenues 24,578 32,198 40,436 EBITDA 2,235 4,544 6,225 underway, we estimate that Tesla could reach close to 2 million Net Income -862 955 1,699 vehicle deliveries in 2025 and 3,7 million in 2035. We reach a Source: Tesla 2019 Annual Report, Own Estimate price target for FY21 of $160,70 through the APV valuation method and weighing three possible outcome scenarios that are detailed in the report. Brief Company description Tesla was founded and established in Palo Alto, California in 2003. Its automotive segment offer includes an expanding range of models and its energy generation & storage division sells energy storage systems as well as photovoltaic energy generation products for retail, industrial and commercial use. THIS REPORT WAS PREPARED EXCLUSIVELY FOR ACADEMIC PURPOSES BY MAXIME HOZE AND PATRICIO DREXHAGEN, MASTER IN FINANCE STUDENTS OF THE NOVA SCHOOL OF BUSINESS AND ECONOMICS. THE REPORT WAS SUPERVISED BY A NOVA SBE FACULTY MEMBER, ACTING IN A MERE ACADEMIC CAPACITY, WHO REVIEWED THE VALUATION METHODOLOGY AND THE FINANCIAL MODEL. (PLEASE REFER TO THE DISCLOSURES AND DISCLAIMERS AT END OF THE DOCUMENT) Page 1/35 “TESLA INC” COMPANY REPORT Table of Contents 1. Company Description .................................................................................................................................................................................................. 3 2. Shareholder Structure ................................................................................................................................................................................................. 3 a. Investor Base, Who Owns Tesla’s Equity? ........................................................................................................................................................................ 3 b. Similarities with Tech Sector ............................................................................................................................................................................................ 4 c. Changes within Institutional Investors Base ..................................................................................................................................................................... 5 3. Automotive Industry ................................................................................................................................................................................................... 5 a. Main Challenges for EVs ................................................................................................................................................................................................... 6 i. Supercharger Network ..................................................................................................................................................................................................... 7 ii. Battery Ranges ................................................................................................................................................................................................................. 8 iii. Manufacturing costs & Battery progresses ................................................................................................................................................................ 9 b. Regional markets and policies ........................................................................................................................................................................................ 10 c. New entrants to electric mobility ................................................................................................................................................................................... 12 i. Traditional car manufacturers ........................................................................................................................................................................................ 12 ii. New Entrants .................................................................................................................................................................................................................. 12 4. Solar & Energy Storage ............................................................................................................................................................................................. 13 a. SolarCity Overview ......................................................................................................................................................................................................... 13 b. Market Outlook & Forecasts .......................................................................................................................................................................................... 14 5. ESG Performance ...................................................................................................................................................................................................... 15 a. Environmental Performance and Concerns ................................................................................................................................................................... 16 i. Energy Sourcing for Manufacturing ............................................................................................................................................................................... 17 b. Social Performance ........................................................................................................................................................................................................
Load more

Recommended publications
  • Makes & Models
    Makes & Models EV Buyers Guide Background image: Designed by senivpetro / Freepik Types of EV SUVs A Sport Utility Vehicle (SUV) is a type of automobile that combines elements of road-going passenger cars with features from off-road vehicles, such as raised ground clearance and four-wheel drive. Those three ingredients: a high driving position, better performance in icy weather and plenty of space make SUVs particularly attractive to families. Practical / Small Family EVs The most popular car being bought today in the UK still tends to be the traditional family hatchback. A hatchback offers families (even those with dogs) just about everything they could need in a car by being spacious but not as big as SUVs, making them easier to manoeuvre and park. The original problems associated with electric cars (high prices, restricted performance at higher speeds and a limited driving range) have all been addressed, providing a very attractive solution for this market segment. Small/city EVs Electric power and small cars have always been a natural fi t. Their nippy acceleration is ideal in town, where shorter journeys mean that you don’t need to worry about recharging until you get home. Future Releases The electric car revolution has continued in earnest into the 2020s, with exciting new electric cars arriving every month. Prices are just about starting to come down to affordable levels, and range is going up making them more attractive to purchase over existing petrol/diesel counterparts. Here are a few exciting models that will be released over the next couple of years.
    [Show full text]
  • Vertically Integrated Supply Chain of Batteries, Electric Vehicles
    sustainability Review Vertically Integrated Supply Chain of Batteries, Electric Vehicles, and Charging Infrastructure: A Review of Three Milestone Projects from Theory of Constraints Perspective Michael Naor 1,* , Alex Coman 2 and Anat Wiznizer 1 1 School of Busines Administration, Hebrew University, Jerusalem 9190501, Israel; [email protected] 2 School of Computer Science, Academic College of Tel Aviv-Yaffo, Tel Aviv 61000, Israel; [email protected] * Correspondence: [email protected] Abstract: This research utilizes case study methodology based on longitudinal interviews over a decade coupled with secondary data sources to juxtapose Tesla with two high-profile past mega- projects in the electric transportation industry, EV-1 and Better Place. The theory of constraints serves as a lens to identify production and market bottlenecks for the dissemination of electric vehicles. The valuable lessons learned from EV1 failure and Better Place bankruptcy paved the way for Tesla’s operations strategy to build gigafactories which bears a resemblance to Ford T mass production last century. Specifically, EV1 relied on external suppliers to develop batteries, while Better Place was dependent on a single manufacturer to build cars uniquely compatible with its charging infrastructure, whereas Tesla established a closed-loop, green, vertically integrated supply chain consisting of batteries, electric cars and charging infrastructure to meet its customers evolving needs. The analysis unveils several limitations of the Tesla business model which can impede its Citation: Naor, M.; Coman, A.; Wiznizer, A. Vertically Integrated worldwide expansion, such as utility grid overload and a shortage of raw material, which Tesla Supply Chain of Batteries, Electric strives to address by innovating advanced batteries and further extending its vertically integrated Vehicles, and Charging Infrastructure: supply chain to the mining industry.
    [Show full text]
  • Great Founder Theory
    Great Founder Theory Samo Burja 2020 Manuscript www.SamoBurja.com/GFT © Samo Burja, 2020. All Rights Reserved. Great Founder Theory Samo Burja 2020 Manuscript Contents Preface ............................................................................................5 Introduction ....................................................................................8 On Building Theories of History ...................................................16 Social Technology .........................................................................21 How Social Engineering Drives Technology ..................................31 Honors Fuel Achievement .............................................................40 How Elon Musk is Making Engineers Cool Again .........................47 On the Loss and Preservation of Knowledge .................................50 Intellectual Dark Matter................................................................59 Live vs. Dead Players .....................................................................68 Borrowed vs. Owned Power ..........................................................72 The Succession Problem ................................................................77 How Roman Emperors Handled the Succession Problem ..............82 What Botswana Can Teach Us About Political Stability ................89 Functional Institutions Are the Exception .....................................97 How to Use Bureaucracies ...........................................................103 Competition for Power ...............................................................111
    [Show full text]
  • Tesla's Cybertruck Is Audaciously Austenitic
    AE Marubeni Ad 0620.qxp 6/3/20 1:26 PM Page 1 Citizen Productivity, Miyano Precision Supported by MCC’s local, full service distributor network. Experience the difference. BNA-42MSY2 CNC Super Turning Center with 2 Spindles and 1 Turret with Y-Axis Enhanced front and back simultaneous machining capability. Not your basic single turret, twin spindle machine The X2 axis sub-spindle and superimposed synchronization enables simultaneous, independent machining of the front and back of the workpiece. This, in effect, provides the benefi ts of a twin turret machine with the signifi cant cost savings of a single turret model. • Increased power on spindle motors Machine specifi cations • High torque revolving tool motor provides heavier cutting Max. machining diameter 1 5/8" • Fast processing and short cycle time with the high speed NC unit Standard machining length 3.9" • Cincom Control ensures reduced idle time and easy setup Main spindle speed 60 ~ 6,000 • Compact design for fl oor space effi ciency Rotary tool spindle speed 60 ~ 6,000 Back spindle speed 50 ~ 5,000 www.marucit.com Allendale, NJ Elk Grove Village, IL Fountain Valley, CA Agawam, MA (201) 818-0100 (847) 364-9060 (714) 434-6224 (413) 786-6655 Free Info at http://info.hotims.com/76516-712 AUTOMOTIVE ENGINEERING® LIGHTWEIGHT METALS SPECIAL Megacasting muscle! Tesla Model Y goes big on aluminum castings with help from Italy’s Last Chance to Enter! IDRA Group Change the world, achieve global recognition, and win $20,000. Entry Deadline: July 1, 2020 CreateTheFutureContest.com Sergey Nivens/Shutterstock.com CTF Belly Band Lightbulb.indd 1 5/13/20 4:04 PM ALSO IN THIS ISSUE: Stainless steel for Cybertruck Tata Steel innovations Mixed-materials design tools June 2020 autoengineering.sae.org Last Chance to Enter! Change the world, achieve global recognition, and win $20,000.
    [Show full text]
  • Automotive Journal
    AUTOMOTIVE JOURNAL ni.com Q2 + 2021 Accelerating the Path to Vision Zero by Enabling Product Performance The ambition of a world with zero crashes, zero emissions, and zero congestion is a reality we are seeing come together before our eyes. Two critical roadblocks between here and there remain: testing the new software-defined capabilities in the car and building the trust of a doubtful consumer market. What role does test play in Vision Zero? We believe test is the key enabler for accelerating timelines regardless of the component involved. Ensuring the safe and reliable operation of an autonomous vehicle is a complicated process. At NI, we understand not only the individual requirements of the vehicle components but also how they harmonize. Though each element has its own technology and supply chain requirements, the interdependency is undeniable. NI is here to help bridge the gap between the test needs across the entire automotive supply chain—at a speed our competition cannot meet—while building consumer trust along the way. Our portfolio of modular hardware and open software has a proven track record in helping companies keep up with the technological innovation driving their industry. Our commitment is to partner with you to accelerate product performance for your company, delivering new capabilities to market faster, more reliably, and more profitably. Our team of expert connectors is here to help you Engineer Ambitiously. CHAD CHESNEY VICE PRESIDENT AND GENERAL MANAGER, TRANSPORTATION BUSINESS, NI National Instruments is now
    [Show full text]
  • SEMA Top Light Trucks for Accessorization
    WELCOME TO THE SEMA LIGHT-TRUCK MARKET SNAPSHOT Light trucks–pickups, SUVs, CUVs, and vans–are a diverse and growing group of vehicles. Over the past few decades, light trucks have overtaken cars to represent the majority of vehicles on the road in the United States. They also account for the bulk of sales in the specialty-equipment market, with pickups alone representing nearly a third of total sales. But the light-truck market is evolving, shaped by trends in vehicle sales, technology, and consumer behavior. What does the market for light trucks look like? How is it changing? What do businesses need to know in order to succeed amid the growing diversity of the light-truck market? This report will help answer these questions and more. With this report, your business can get a better understanding of the light-truck market and where it’s going, so that you can have more success in 2021 and beyond. This report is meant to help you understand the overall truck market. SEMA members can also get access to more comprehensive vehicle sales and VIO information through the SEMA Market Research department partnership programs. For more information, visit our website at www.sema.org/research. TABLETABLE OFOF CONTENTS CONTENTS Key Takeaways 4 Overall Vehicle Landscape 9 Opportunity for the Aftermarket 17 Detailed Vehicle Segments Pickups 22 SUVs 36 CUVs 50 Vans 60 Off-Roading 69 Overlanding 75 Outdoor Recreation 79 Powertrain & Technology Trends 86 Additional Information 95 4 THE LIGHT-TRUCK MARKET IS DIVERSE AND GROWING New Light-Vehicle Sales Forecast by Vehicle Type 17.5M 16.4M 17.2M 16.4M 16.9M 17.1M 17.2M Light trucks represent the majority of passenger 14.5M vehicles sold in the United States and their share is 10.6M 8.7M 11.9M 13.7M 14.0M 14.2M growing.
    [Show full text]
  • Tesla and Ford Trade Challenges in Macho Truck World 26 November 2019
    Tesla and Ford trade challenges in macho truck world 26 November 2019 "Hey @Elon, send us a Cybertruck and we will do the apples to apples test for you," Madra tweeted. "Bring it on," Musk fired back. Musk's boasts ignited online debate, with Ford defenders arguing the F-150 was at a disadvantage for reasons that included lacking a load to enhance rear-wheel drive traction and that the Cybertruck may have gotten a head-start. Tesla's new electric pickup truck has secured almost 150,000 orders, Musk said on Twitter just two days after its big reveal went embarrassingly Tesla co-founder and CEO Elon Musk presentING the all- wrong. electric battery-powered Tesla Cybertruck at Tesla Design Center in Hawthorne, California The billionaire Tesla co-founder floundered on stage in California last week when the vehicle's armored glass windows cracked in a demonstration intended to prove their indestructible design. Tesla and Ford were in a virtual stare-down on Tuesday in the macho truck world, each claiming The industrial-looking Cybertruck is covered in the their electric pick-up was strongest. same steel alloy Musk plans to use for his SpaceX Starship rocket and will be able to go from 0 to 100 Dueling tough talk was exchanged on Twitter after kilometers (62 miles) per hour in about three Tesla chief executive Elon Musk posted a video of seconds, the Tesla chief executive claimed in his a freshly-unveiled "Cybertruck" trouncing a Ford presentation. F-150 in a tug-of-war. He said the entry-level model will have a starting The video had logged nearly 13 million views at price of $39,900 and a 400-kilometer (250-mile) Twitter as of early Tuesday in California, and been range, while a deluxe option will be able to travel "retweeted" more than 110,000 times.
    [Show full text]
  • Electrifying Trucks: from Delivery Vans to Buses to 18-Wheelers
    Electrifying Trucks: From Delivery Vans to Buses to 18-Wheelers Steven Nadel and Eric Junga January 2020 An ACEEE White Paper © American Council for an Energy-Efficient Economy 529 14th Street NW, Suite 600, Washington, DC 20045 Phone: (202) 507-4000 • Twitter: @ACEEEDC Facebook.com/myACEEE • aceee.org ELECTRIFYING TRUCKS © ACEEE Contents About the Authors ..............................................................................................................................iii Acknowledgments ..............................................................................................................................iii Abstract ................................................................................................................................................ iv Introduction .......................................................................................................................................... 1 Why Electrify Trucks? ......................................................................................................................... 3 Energy Use and Operating Costs ........................................................................................... 3 Emissions ................................................................................................................................... 4 Health ........................................................................................................................................ 6 Torque .......................................................................................................................................
    [Show full text]
  • Electric Vehicle Market Status - Update Manufacturer Commitments to Future Electric Mobility in the U.S
    Electric Vehicle Market Status - Update Manufacturer Commitments to Future Electric Mobility in the U.S. and Worldwide April 2021 Contents Acknowledgements ................................................................................................................................. 2 Executive Summary ................................................................................................................................ 4 Drivers of Global EV Growth – Global Goals to Accelerate Sales ............................................................ 8 Policy Drivers of U.S. Electric Vehicle Growth ..................................................................................... 11 Manufacturer Commitments .................................................................................................................. 14 Job Creation .......................................................................................................................................... 18 Charging Network Investments .............................................................................................................. 21 Commercial Fleet Electrification Commitments ..................................................................................... 23 Sales Forecast ........................................................................................................................................ 25 Battery Pack Cost Projections and EV Price Parity ...............................................................................
    [Show full text]
  • How a Fossil-Fuel Power Plant Prompted Elon Musk's Bitcoin U-Turn | Torque News 5/16/21, 12:19 PM
    How a Fossil-Fuel Power Plant Prompted Elon Musk's Bitcoin U-Turn | Torque News 5/16/21, 12:19 PM News Reviews EV Performance Pickup Trucks Submit a Tip SEARCH Jobs VIDEO Home / Tesla News and Updates Related to This Story Tesla Gets Approval To Use This Helicopter At Giga Berlin Tesla Owner Tells How His Model 3 Disobeyed Him, Saving His Life Batteries, Not Cars, May Be the Reason for Tesla to Go to India Watch a Tesla Drive Itself Through Traffic Highlighting Autopilot and FSD Features Tesla Insurance To Offer 70% Discount Based On Driving Data Driving School in Shanghai Driving School Starts Offering Driving Lessons To New Tesla Owners By Daniel Cappo May 13 2021 - 4:08pm How a Fossil-Fuel Power Plant Prompted Elon Musk's Backseat Autopilot Driving a Tesla Bitcoin U-Turn Means a Night in Jail The news recently broke that Tesla has planned to stop accepting Bitcoin. A retired fossil Elon Musk Provides New Update on fuel power plant seems to be the reason why Elon Musk decided to pull back on Bitcoin. Tesla's FSD V9 With "Gigantic" Difference Advertisement Watch Tesla's Cylindrical 4680 Battery Pack Compared with 2170 Pack Tesla Stock Price Forcast › Tesla Authorizes A Third Party To Current Fuel Prices › Repair its Cars Initial NTSB Report On Crashed Renewable Electricity › Energy Sources "Driver-less" Model S Published - Easy Link Here Best Investments for › Beginners Hidden Tesla Cybertruck Front End Sponsored | Business Focus Camera May Pose Problems for YouTube 55K Drivers Charging Your Tesla Could Be As Simple As Going for a Ride Tesla recently started to accept Bitcoin as a form of payment but will now no longer accept it.
    [Show full text]
  • Electric Cars
    electric cars: an Believe it or not, Electric Vehicles (EVs) first made their debut in 1904 during the era of the horse and buggy! In honor of more than a century of electrified vehicles, ILLUME offbeat dug into automobile archives in search of a forgotten history.1 HISTORY 1974 The Electrobus was capable of 1904 35‐mile‐an‐hour First Lady Edith Wilson speeds while in an electric car at the transporting up to Who says the nation’s capital. 40 passengers. two-wheel crowd EVs were popular wasn’t in on with urban dwellers 1917 the fun? and doctors making Newspaper house calls. ad 1937 Buzzkill! As Prohibition ended, so did the early heyday of EVs due to better roads 1904 1917 1937 and cheap, plentiful fossil 1919 fuels. 1919 Promotional trip 1970 1974 from Seattle to 1973 1977 Mt. Rainer in a Detroit Electric Environmental car. 1919 concerns, crude oil Electric car supply disruptions, charging. and the Clean Air Act in 1970 were catalysts for an EV resurgence. 1973 The Electra was based off a 1974-77 The Citicar by ‘72 Fiat 850. Sebring-Vanguard Three electric sold enough units motors replaced in 1976 to be the original the #6 automaker gas engine. in the US. Photo credits: U.S. Library of Congress Published in INGENUITY AND RESILIENCE, Vol. II electric cars: an Believe it or not, Electric Vehicles (EVs) first made their debut in 1904 during the era of the horse and buggy! In honor of more than a century of electrified vehicles, ILLUME offbeat dug into automobile archives in search of a forgotten history.1 HISTORY 1974 The Electrobus was capable of 1904 35‐mile‐an‐hour First Lady Edith Wilson speeds while in an electric car at the transporting up to Who says the nation’s capital.
    [Show full text]
  • Chicago Chesed Fund 2021 Grand Raffle Official Rules & Regulations You Are Responsible for Reading These Official Rules
    Chicago Chesed Fund 2021 Grand Raffle Official Rules & Regulations You are responsible for reading these official rules and regulations. The Grand Prize Drawingwill be held on Thursday,August 26, 2021. The drawing is limited to a maximum of 9,999entrants. The odds of winning depend on the number of tickets sold. The Grand Prize winnerwill choose to receive either (1) his or her choice of a 2021/2022 Tesla Model S (hereinafter“Tesla”), a 2021/2022 Tesla Model 3, 2021/2022 Tesla Model X, 2021/2022 Tesla ModelY, or a Tesla Cybertruck when it becomes available (collectively referred to as the “Tesla Grand Prize”); or (2) an “Alternate Grand Prize” of acertified check in the amount of $50,000.00 USD. The Tesla Grand Prize shall be the winner’s choice of a Tesla Model S, a Tesla Model 3, TeslaModel X, Model Y, or a Tesla Cybertruck when it becomes available. Chicago Chesed Fund will tender up to $8,930 towards any associatedfees (title, taxes, or other fees associated with the transfer of the vehicle to the winner),however, under no circumstances shall the total amount of the Tesla Grand Prize packageexceed $83,000.00 USD. The Grand Prize winner has the option to customize the Tesla vehiclebeyond base model specifications. If customization costs exceed the maximum Tesla GrandPrize value of $83,000.00 USD. The Grand Prize winner shall be responsible for any and allcharges, costs, taxes and fees over and above the Tesla Grand Prize value. For more details onthe Tesla Model S, Tesla Model X, Model 3, Tesla Model Y, and Tesla Cybertruck and available options, pleasevisit the Tesla Motors Website and the Design Studio.
    [Show full text]