Tesla Motors (TSLA) Last Update 1/25/24
Related: MBGAF F HMC GM
% of Stock Price
Revenue
Gross Profits
Free Cash Flow
Tesla Motors
$208.67
Yours
Trefis Price
N/A
$192
Market
 
Top Drivers for Period
Key Drivers
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RECENT NEWS AND ANALYSIS

Potential upside & downside to trefis price

Tesla Motors Company

VALUATION HIGHLIGHTS

  1. Automotive constitutes 92% of the Trefis price estimate for Tesla Motors's stock.

WHAT HAS CHANGED?

Tesla's Q4 2023 Earnings

Tesla's Q4 2023 results were weaker than expected. While revenues missed expectations, growing by about 3.5% year-over-year to $25.2 billion, earnings came in at $0.71 per share, below consensus. The near-term outlook looks mixed, as the company warned that 2024 sales growth would be notably lower amid slowing consumer demand, intensifying competition, and high interest rates.

BUSINESS SUMMARY

Tesla is focused on designing, manufacturing, and selling electric vehicles and related technologies. The company's current model line-up includes the Model S luxury sedan, the Model X luxury SUV, the Model 3 sedan, and the Model Y compact SUV. Tesla also sells renewable energy products such as solar panels and battery technology. The company's upcoming products (likely due in 2023 or later) include the Cyber Truck electric pick-up, the Semi truck, and the second-generation Roadster sports car.

SOURCES OF VALUE

Most of Tesla's value comes from its Mass Market vehicles, such as its Model 3 and Model Y.

Future model launches

Tesla currently offers four vehicles: Model 3, Model Y, Model S, and Model X. The company's upcoming vehicles include the Cybertruck pickup truck, which will likely go on sale sometime in 2023. Tesla is expected to take its first step away from the luxury passenger vehicle market into the commercial space, with plans to launch an all-electric semi-truck.

Transition to EVs should go quicker than expected

President Joe Biden committed that the United States would reduce its greenhouse gas emissions by 50% to 52% below its 2005 emissions levels by 2030. The U.S. has also pledged to achieve carbon neutrality by 2050. We are seeing similar commitments from other developed countries across the world. This means that the process of decarbonizing the transportation space will have to speed up, with gasoline-powered vehicles being replaced with cleaner EVs and hybrids. This should bode well for Tesla, the market leader in the premium EV space.

KEY TRENDS

Falling battery costs to speed up the adoption of electric cars

According to Bloomberg New Energy Finance (BNEF), the industry average battery cost (cell plus packaging) has declined from $288 per kilowatt-hour to $132 between 2016 and 2021, driven by higher volumes and improved technologies. Although the metric rose a bit in 2022, due to supply chain issues, it is unlikely to impact the longer-term trend. Tesla's battery costs are likely to be lower than the broader industry, considering the company is one of the largest EV players, giving it a better scale.

The electric car space is getting increasingly competitive

Mainstream automotive manufacturers are getting more serious about their electric vehicle programs as they look to take advantage of all-electric drive trains' performance and cost advantages. General Motors now offers the Chevy Bolt, an all-electric vehicle with a range of over 200 miles, while Nissan launched the second generation of its popular Leaf with an improved 150-mile range. Volkswagen announced it would invest as much as 70 billion euros (~$84 billion) in bringing around 300 electric models to market by 2030.