Tesla_Financial Plan_Design4

Tesla Motors Company

Karen Brady / Samuel Sutanto / Tsien White / Yefta Surya

Gigafactory Economies of Scale

Current Problems With Tesla’s Manufacturing Model

Current Production of Lithium Ion Batteries Is insufficient to meet production demands

WHICH CONSTRAINS DEMAND

The Cost to Produce Lithium Ion Batteries is High

Which Increases the Cost of the Vehicle

Solution

Build a Lithium Battery Factory to . . .

To mass produce batteries in order to . . .

Mass produce cars . . .But not just any factory . . .

It must be a factory as efficient . . .As state of the art as . . .

The Tesla Car

Gigafactory

• Lithium-Ion Battery Factory

5 to 10 Million Square Feet

Powered With Renewable Energies

Battery Production Starts In 2017

Full Production of 500,000 batteries in 2020

Gigafactory Price Tag

$5 Billion45% Tesla 35%

Panasonic1.6 Billionin Convertible

Notes

345

17735

52835

96000

2010 2011 2012 2013

Sales of all Electric and Plug in Hybrid electric cars in the U.S.

Reno, Nevada

The factory must be built with efficiency in mind• Near a lithium mine• Near the Tesla car factory in Fremont, CA• Railroad is available• Near an interstate highway• Where renewable energy can be harnessed• Where high speed internet access is

available• Where the environment is pro-business

Size = Efficiency

Battery Manufacturing

Battery Packaging

Co-Locate Suppliers

Battery Recycling Center

Under One Large Roof

Lithium-Ion Battery Production Cost

60 kWh Battery

85 kWh Battery

48 kWh Battery

Car Price $71,000 $85,000 $35,000

Current Battery Cost

$238 kWh – $278 kWh (avg. $256 kWh)

$15,360(21.63% of total

cost)

$21,760(25.6% of total

cost)

$12,288(35.11% of total

cost)

30% Reduction on Battery Cost

$10,752(15.14% of total

cost)

$15,232(17.92% of total

cost)

$8,602(24.58% of total

cost)

Tesla WACC

• Risk Free Rate: 2.65%• Beta: 1.52• Market Risk Premium: 12%• Rate of Equity = 2.65% * 1.52 (12%)• Rate of Equity = 20.89%

Tesla WACC

• Debt (D): $2.47 Billion• Debt/Equity Ratio: 257.68%• Equity (E): $958,553,244.33 • Debt + Equity (V):

$3,428,553,244.33 • Coupon Rate: 1.50%• Rate of Equity: 20.89%• Tax Rate: 40%

Tesla WACC

Perpetuity Formula

• 30% of cost reduction ($76.80 kWh)• Battery Capacity sample: 60 kWh• Total Cost Savings: $4,608• Quantity: 500,000• Total Cost Savings in 2020, 2021,

2022, 2023, and the following years: $2.304 Billion

• Discount Rate: 15%• Present Value (PV): $15.36 Billion

Net Present Value & Internal Rate of Return

• NPV = $1,640,551,873.20 • IRR = 20.57% • WACC = 9.99%

2015

2016

2017

2018

2019 2020

$(5,000,000,00

0.00) 0 0 0 0 0$15,360,000,000.

00

*NPV and IRR is based on 30% cost savings

Growth Through Batteries

Cars Mass Transit Electronics Energy Storage

Thank You

Questions?