Tesla Stock Review (FY 2020)
Reading Time: 10 minutes
10 years ago, no one in their wildest dreams would have imagined what Tesla has turned out to become. In fact, for many investors the only question was not if but when the company would eventually file for bankruptcy. Today, the company is selling almost 250.000 cars per quarter – and sales are continuously beating analyst expectations. By many measures, Tesla has challenged and even bypassed the world’s biggest and most renowned car manufacturers such as Volkswagen, Toyota, BMW and Daimler. Tesla is a full-blown disrupter to the entire automotive industry and now leading the way to a new electrified mobility. Competitors are scrambling just to keep up with the innovative power of Tesla and investing heavily in an attempt to bridge the gap to Elon Musk’s company.
Tesla | USA | Automotive | Fiscal Year 2021 | ISIN: US88160R1014
Table of Contents
Tesla Company History
Fun fact: Elon Musk is not the founder of Tesla. In fact, Martin Eberhard and Marc Tarpenning founded the company in 2003. Elon Musk was one of the early-stage investors who provided the company with additional financial resources in 2004. However, Musk soon started to become a prominent figure and public supporter of the company. While Eberhard and Tarpenning left Tesla in 2008, Musk took over as the CEO and still holds the position to this day. In 2008, Tesla did also release the world’s first electric vehicle – the Tesla Roadster – an electric sports car based on the chassis of a Lotus. Following the release of the Roadster, Tesla gradually increased its product group by several new models such as the Model S, the Model X and the Model 3. To this day, Tesla has produced 1.4 million cars in total.
In 2014, Tesla made an unprecedented move and made all its patents freely available to its competitors in order to boost the move towards a more electric focused automotive future. There were also some periods where Tesla was close to bankruptcy. For instance in 2008, an investor had to jump in and provide fresh capital, which eventually saved the company. Musk has also said, Tesla was “one month away from bankruptcy” in 2019. This time, he saved the company with some of his own money. After reporting continuous losses, Tesla eventually reported a net profit in the third quarter of 2016. However, even in the years prior to Tesla’s first profit, its stock price has seen a massive increase which – for many investors – was (and still is) not reflecting foundational valuation principles anymore. Even Musk himself has stated on several occasions that he thinks the stock price of Tesla is too high. In 2020, 17 years after its founding, Tesla reported its first annual profit.
In 2018, Musk famously announced Tesla’s delisting from the stock market on Twitter. This announcement unsettled many investors, which eventually led the SEC to invite the board of Tesla and Musk to a hearing. Eventually, Musk abandoned his plans for the delisting and said Tesla will remain listed on the stock market. Following some standoffs between Tesla and the state of California, Tesla decided to relocate its headquarters from Palo Alto to Austin in Texas. Among the reasons for this transition, Musk cited topics such as increased cost of living for Tesla employees in California. Next to its headquarter in the U.S., Tesla has five production plants – so called “Gigafactories”, where Tesla produces its cars and/or batteries. Two Gigafactories are located overseas in Shanghai and in Berlin (the latter to be ready for production in 2021) while three Gigafactories are located in the U.S. In May of 2021, Tesla’s market capitalization was at about 650 Billion USD (!) which makes it even bigger than many of the biggest companies in the auto and airline industry combined.
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Tesla Business Model
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Tesla Founder & CEO: Elon Musk
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We assume no liability for the accuracy of the financial data. Sources of the financial data are foremost IR websites of the company subject to the analysis. Additionally we rely on further data and information from Thomson Reuters EIKON. Moreover, unless better data is available, we do our own calculations of available data for KPI determination. Our stock analyses are by no means to be understood as a buy or sell recommendation and do not provide any conclusions regarding the future development of the company (and thus the future price development of the share).