Tesla Valuation Metrics
When looking at just their Automotive business, a conservative growth rate for tesla of 12% with the implementation of cost of revenue decreases they announced on battery day which I estimate to be around 70% of revenues in 2023, tesla’s share price can be expected to be around $332 at a P/E of 47 which estimates an 18% drop from their current price.
Tesla Long Term Outlook
EV market as a whole covers less than 1% of cars on the planet and stationary storage accounts for less than 0.1%. Tesla has a 20% market share in EV’s whilst no other vehicle can boast having at least a 10% Market Share in ICE or EV.
In their recent annual shareholder meeting “Battery Day” tesla announced that the improvements they made to batteries such as:
- Tabless Battery Cells which will improve battery range. Tesla plans to manufacture its own “tabless” batteries, which will improve its vehicles’ range and power. Elon says this will reduce costs and bring the sale price of Tesla electric cars closer to gasoline-powered cars. The tabless cells, which Tesla is calling the 4680 cells, will make its batteries six times more powerful, increase range by 16 per cent and hold five times the amount of energy.
- Dry Battery Electrode Technology: Increase the performance of the battery cell and drastically reduce the footprint created at Tesla factories. Which amounts to a 10x Footprint reduction and 10x Energy reduction.
- Revolution in Body + Battery Engineering: Cell to vehicle integration which reduces 79 parts per car, increases read underbody cost savings by 40%, 10% mass reduction and 14% range increase. This integration also reduces their manufacturing cost as more manufacturing can be done on the same floor space which reduces their factory size by 35%.
- Stacking up the benefits. Tesla’s vertical integration is expected to lead to a 56% dollar per kWh reduction in costs and unlock a range increase of 54%. Tesla says it wants to make 20M vehicles a year in the long term and aims to get to the $25K price point with full autonomy. The plaid Model S is introduced for delivery next year.
Referred Sources:
Tesla’s Q2 2020 Results, Tesla’s 2019 10-K, Tesla “Battery Day”, Zacks.com and predictions made by the Author’s understanding of the company.
Disclosures:
This report contains independent commentary to be used for informational purposes only. The analyst/author contributing to this report does not hold any shares of this stock at the time of writing. The analyst/author contributing to this report does not serve on the board of the company that issued this stock. Additionally, the analyst/author contributing to this report certify that the views expressed herein accurately reflect the analyst’s/author’s personal views as to the subject securities and issuers.
