Tesla Motors (NASDAQ:TSLA) just continues to soar. The stock has gained over 60% in the last month.  Tesla has been hitting the headlines so often lately that it is easy to overlook what the company’s future plans are. Besides the much talked about Model S, we look at some of its future vehicle launches such as the Model X and the high volume Gen III in this article.
We have a price estimate of $69 for Tesla, which is about 30% lower than the current market price.
- How Much Of Tesla’s Overall Revenue Is Unrecognized Due To Accounting Principles?
- How Much Do Tesla’s GAAP and Non GAAP Margins Differ?
- How Much Revenue Does Tesla Make Per Each Unit Vehicle Sold?
- How Has Tesla’s Gross Margin Behaved Over The Last Three Years?
- How Much Does Tesla Spend On Research and Development?
- How Much Does Tesla Spend On Selling, General and Administrative Expenses Per Unit Sold?
1) Model S Plans
In the most recent quarter, Tesla reported unit deliveries of the Model S at 4,900 units exceeding its initial target of 4,500 units. As a result, Tesla has revised its full year target to 21,000 units for the Model S. The car topped the list of luxury cars sold during the first quarter which was followed by the Mercedes S Class at 3,077 units, Lexus LS at 2,860 units, BMW 7 series at 2,338 units and the Audi A8 at 1,462 units.
To support the growing demand of Model S cars, the company opened 12 new service locations during the first quarter bringing its total service station base at 41 locations so far. Tesla plans to add 30 locations in total during the 2013 period.
– International Expansion
– Until now, Tesla’s deliveries have been primarily concentrated in the United States with the company having recently begun accepting orders for deliveries in Europe. The company has announced plans to start delivering the Model S this summer in Europe and in Asia later in the year.
– In a bid to expand its retail presence internationally, Tesla intends to open 15 more retail locations this year adding to its current total of 34. About half of the new store launches will be in Europe and Asia.
– The market for electric vehicles is growing very rapidly and according to a ‘The Global EV Outlook’ report which was published in April of this year, EV sales globally are expected to cross 5 million units by 2020 growing at a compounded rate of 20%.
Performance compared to competitors
Tesla has so far been widely recognized in the industry as the premier electric vehicle. Its performance is regarded to be superior in comparison to its competitors. According to a Tesla presentation, Tesla leads on range (maximum miles per single charge) compared to its competitors due to its superior battery technology and power. The Model S offers in excess of 200 miles on a single charge compared to only 73 for the Nissan Leaf.
2) New Model Launches
Tesla has moved the production of the Model X into late 2014 with deliveries expected to start the following year. The Model X provides its customers with a unique purely electric SUV crossover with three rows of seating and room for seven passengers. It will be offered with a choice of two lithium-ion battery packs (60kWh and 85kWh). While the exact pricing has not been announced for the Model X it is expected to be similar to that of the Model S. The success of the Model S is likely to be a strong barometer for the Model X.
The company plans to offer its customers a cost effective option by introducing the Gen III vehicle by 2017 with speculation that it could even come out as early as 2016. The car is expected to be priced in the mid $30k range and would compete with the likes of the BMW 3 series and Mercedes C class. This launch is likely to have mass market appeal and we expect Tesla to ramp up production for this model at its Fremont facility which currently has the capacity to produce in excess of 400,000 vehicles each year.
– In 2012 Mercedes sold 81,697 C classes compared to 12,258 S class models at a ratio of 6.6 C models to every S version. Applying a more conservative ratio and based on strong demand of the model S and global expansion, we can see easily expect Tesla to start at 30,000 units for the Gen III in 2017 and then ramping up to over 200k units within the subsequent years.
A recent report by a Goldman analysts suggests that Tesla is targeting 300,000 annual sales of Gen III in the long run. Although, the recent optimism surrounding the company could point to Tesla easily achieving its goals, we are sticking with our forecasts for the time being since we estimate that 200,000 is bullish enough a number for a car that hasn’t even hit the markets. If the company is indeed able to sell about 300,000 units, we could see a 10-15% upside to the Trefis price estimate.Notes:
- Tesla Motors Inc (TSLA) Envisions Selling Around 500K Units: Long Term, May 27, 2013, valuewalk.com [↩]