Tesla Motors, Inc.

University of Oregon Investment Group
Vehicle, Options and Related Sales
April 18, 2013
Model Price (In Thousands) % of Sales
Large Battery 100.00 33%
Medium battery 85.00 57%
Low Battery 70.00 10%
Median Price 88.45
2013 Model S Unit Sales Q1 Q2 Q3 Q4 Total
Units 4.50 4.75 5.75 7.00 22.00
Median Price (In Thousands) 88.45 88.45 88.45 88.45 88.45
Revenue 398.03 420.14 508.59 619.15 1,945.90
Vehicle, Options and Related Sales consists of revenue earned from the sales of
Tesla’s Model S, Tesla Roadster, vehicle service, and vehicle options,
accessories and destination charges as well as sales of regulatory credit. This
segment is the firm’s largest revenue driver. For the year 2013 we estimated
sales in this category based on management guidance of 20,000 Model S unit
sales. Given management’s strong confidence in their ability to reach 20,000
unit sales even if they were to close all shops and fire their sales team led us to
believe that they would exceed the guidance. Therefore, we estimated that the
firm would sell 22,000 units in 2013.
In the year 2014 we grew Model S sales by 35% given the amount of stores the
firm will open. The firm currently has 32 stores opened and throughout the 2013
year the company will open 10 new stores in the United States, Europe, and
Asia/Pacific. We believe that by the end of 2014 the stores will have influenced
the firm’s sales growth proportionate to their percentage of existing stores,
31.25%. We included an additional increase of 3.75% to include the growth the
firm will experience from their existing stores.
In 2015 the firm will begin to sell the Model X. Due to the fact that Tesla will
release the Model X in 2015 we believe that cannibalization of the Model S will
occur and therefore predicted that the company would sell 85% of the units sold
in the prior year. Management has given guidance that the Model X will see
sales of roughly 70% that of the Model S. We decided to trend this percentage of
sales up from 50% in 2015 to 70% in 2017. For the year 2016 we grew Model S
sales by 3% in anticipation of an updated Model S. Model X sales were equal to
65% of the Model S unit sales. In 2017 we grew Model S sales by 4% and
Model X sales were equal to 70% of the Model S unit sales. In 2018 we
projected that Model S sales would grow by 5% and that Model X sales equal
70% of the Model S sales.
Powertrain Component and Related Sales
Powertrain Component and Related Sales are the sale of Tesla designed and
produced fully electric powertrain systems to other car manufacturers. In 2010
Tesla entered into a contract with Toyota to develop a powertrain system for the
fully electric RAV4. Under this contract Tesla would receive payments totaling
$100 million by 2014 from Toyota as certain milestones were reached. In 2012
Tesla had received a total of $29.1 million. Tesla’s relationship with Toyota is
an important factor in the future growth of Tesla. If the powertrain systems on
the RAV4 perform well and the car is in high demand it is likely that Toyota
will continue to demand powertrain systems from Tesla.
Tesla fulfilled the development agreement from the Smart fortwo and the A-
Class in 2010 but still has yet to fully complete the B-Class agreement. Tesla
has received the initial purchase order for the development of a full electric
powertrain for the B-class and is negotiating the agreement for the production of
the parts.
UOIG 15