This presentation focused upon the SEC based reporting of Tesla's company, where my specific focus resided in the SWOT analysis. I left this area rather sparse so I could elaborate in the presentation itself. I focused upon the issues that Tesla is facing regarding their vertical monopoly, battling state legislature, and acquiring a larger market share via their lower cost cars in production.

1. Understanding Corporate Annual Reports

2. GENERAL INFORMATION
Leo Tjakralaksana

3. Battery Operated Car
• Uses Lithium-Ion
2012 super charge
network being provided
Design
• Elegant
Comfort
• Tablet as command
screen

4. Model S
Sedan
Starting price (69,900)

5. • Sport car-discontinued
• Starting price (59,900)
Roadster

6. Model X
• To be released
• SUV
• Price is to be announced

7. ACCOUNTING AND FINANCE
Nick Shmelev

8. Tesla follows Generally
Accepted Accounting Principles.
Tesla is audited by
Pricewaterhouse Coopers LLC.
Tesla uses the straight-line
method for :
•Calculating depreciation
•revenues on lease vehicles
• stock based compensations
•development compensation and
costs

9. • Tesla uses LIFO method to
value inventories, which are
valued at lower cost of
market.
• At the beginning (2007-2008),
Tesla had negative
stockholders equity.
• However, in 2009 Tesla had
positive stock holders equity.

10. • Tesla began earning revenue in 2007, selling $73000
worth of powertrains.
• Tesla also earns revenue by selling Zero Emission
Vehicle
Credits to other companies.
• Tesla is famous for their electric vehicles, the Tesla
Roadster, Model S, and the soon to be Model X
• However, Tesla had negative operating margins for the
first 3 years.
Financial Performance

11. • Tesla started selling developmental services it provides
to other companies
• Tesla also has future contractual liabilities which are not
noted on the financial statements (Purchase of a facility
and a contract with Lotus)
• Tesla does not pay dividends, and has no intention to do
so in the future
Financial Disclosures

12. • We have a positive look for Tesla's future.
• Their cars are popular, safe, and are becoming mainstream
electric cars
• In 2012 Tesla started to finally generate positive cash flow,
but the company was also increasing it's debt to a projected
$392.5M in 2013.
• The Model S is quickly becoming one the most popular
car on the streets, and is the best electric vehicle out there
Financial Health
.

13. Capital Stock
Mie Takahashi

14. Tesla’s Stock
• The Nasdaq Stock
Market LLC since
June 29, 2010
• The initial price per
stock was 17 dollars.
• It has been increasing
since 2012.
• It reached highest
price: $252.94 at
3/6/2014

16. It is worth seven times as much as last year
Its total value was over $30 billion (2/25/14)
Stock information

17. Preferred Stock
• Authorized:
100,000,000
• Issued outstanding:
None

18. Common Stock
• Authorized : 2,000,000.000
• Issued and outstanding: 123,191,938
(January 31, 2014)
• $0.001 par value
• Treasury stocks: None

19. Strategic or Commercial
Relationships
• Daimler AG
Blackstar lnvestco LLC, an affiliate of Daimler,
owned 4,867,929 shares of CS
• Toyota
2,941,176 shares of CSat $17.00 per share in July
2010 .
• Panasonic
1,418,573 shares of CS to an entity affiliated with
Panasonic at $21.15 per share in November 2010.

20. Dividends and stock
split
• Tesla is not a dividend-paying
company.
• No stock split since June 29, 2010

21. SWOT Analysis
Pierce McManus

22. Strengths
• Battery Technology
• Proven Sales
• Current monopoly
• Production value/design

23. Weaknesses
• Failing sales model
• Unreliable production
• Limited current
growth
• Increasing costs of
production

24. • Acquisition of a lower
cost market
• Focus upon foreign
sales
• Marketing/Advertisin
g
Opportunities

25. • Competition in the
market
• State legislation
• Public perception
Threats

26. MARKETING
Valeria Gomez

27. Tesla can fall under three specific markets:
Luxury vehicles
All-electric vehicles
Sport cars
Market description

28. Model S-Three main
options:
•60 kWh
•85 kWh
•85 kWh Performance
Product Review

29. • Tesla streamlines the
buying process for
consumers
• Test drives are
“delivered” to
customers
• “Tesla Store”
marketing platform:
30 stores nationwide
Channels & Logistics

30. In United States

31. In Europe

32. In Asia

33. • Different driving
experiences
• Environmentally
responsible,
sustainable energy
future.
• Fully electric cars at a
price affordable to the
average consumer
Positioning

34. Product
• The model S as a
revolutionary luxury
sedan that does not
compromise
technology,
efficiency, style,
performance or the
environment.

35. • Buying system is
unique because it all
happens through their
website; sells
expensive vehicles
now with mainstream
ambitions
Pricing

36. Distribution
• Tesla has changed the
dreaded experience of
buying a car:
• Galleries in highly
populated shopping
centers
• Buying experience
tailored to costumer’s
life schedule

37. INVEST IN TESLA?
Reiner Bennardo Riatan

38. In 2012:
• Net Loss:
$396.213 M
• Cash: ($53.376 M)

39. “Tesla announced that it achieved
profitability in the first quarter of 2013 for
the first time in history”
- Mashable, April 1 ,2013 -

40. Tesla’s stock price 2012-2014

41. $35,000 – 200 miles E Model will come
within 3-4 years
How?
Why do investors care?

42. Nasdaq’s recommendation

43. NEWS & CURRENT EVENTS
Brad Nicholl

44. Future Factory
Plans
• Production numbers of electric vehicles:
• 2013: 22,300 units
• 2014 estimate: 40,000 units
• 2020 desired output: 500,000 units
• Lithium-Ion Battery-Supply Shortage
• Limited supply of batteries causes limitations:
• Sales of Toyota Prius (2009, 2011)
• Preventing expansion

45. “The Gigafactory”
Plan
• A factory to produce lithium-ion batteries will:
• Overcome the shortage of lithium-ion batteries
• Reduce costs of batteries by more than 30%
• Costs of the factory:
• Between $4 billion to $5 billion
• $2 billion from Tesla Motors
• $3 billion from partners
(Panasonic & material suppliers)
through 2020

46. Factory details and requirements:
• Facility Area: 10 million square feet
• Total Land Area: 500 acres to 1000 acres
• Total Factory Employees: 6500
• Powered by: Solar & wind power
• Transportation (to California) by: Freight train
Possible & ideal locations:
Arizona, Nevada, New Mexico, or Texas

47. Issuance of
Convertible Bonds
What is a convertible bond?
• Ability to convert the bond to stock shared
• Potential to benefit from an increase in share price
• Share price must be above conversion premium/price
• Conversion rate, price, & premium are all directly related

48. • Additional stock issued will dilute the share price
• No interest payments received after conversion
• No maturity (principal) value received if converted
• Allows corporations to offer lower interest rates
• Bonds converted reduce the corporation’s liabilities
• Callable: Corp. generally has power to force conversion
Issuance of
Convertible Bonds

49. Issuance of
Convertible Bonds
• Tesla needed to raise funds to finance the massive
battery factory and expand operations
• Planned to raise $1.6 billion
• Raised $2 billion due to excess demand, issuing:
• $800 million convertible bonds issued @ 0.25%
due 2019
• $1.2 billion convertible bonds issued @ 1.25% due
2021

50. • Details of the convertible bonds:
• Conversion Premium: 42.5% above last reported share
price on pricing date (2/27/14 = $252.54)
• Conversion Price: $359.87/share ($252.54 x 1.425)
• Conversion Rate: 2.7788 shares/$1000 bond
(1000/359.87)
• Senior Note status: Takes precedence over other debt

51. Direct-sales method
• Selling Tesla vehicles
directly to costumers
through Tesla dealerships
• Skips the “middleman,”
independent dealerships
• Creates a better
experience and increased
understanding of the Tesla
electric vehicles
Issue With Direct-
Sales Method

52. Issue With Direct-
Sales Method
States that have banned Tesla’s direct-sales method:
• Arizona, Texas, & recently New Jersey, with others possibly
to join in the future
Why ban direct-sales method?
• Hurts established, independent dealerships
• Fear of similar tactics from foreign automakers
• Campaign money received
from a dealers association

53. • Solutions to bans on direct-sales method
• Display rooms only
• Limit to cars displayed depending on state law on ban
• Ability to test-drive depends on state law on ban
• Purchasing information cannot be provided
• Customers must purchase via online

54. QUESTIONS

55. • Which Tesla’s car has been discontinued?
a)Model S
b)Model X
c)Roadster
d)Model E
Prize: Bluetooth

56. • What Type of bonds is Tesla planning to sell?
a)Convertible
b)Debenture
c)Callable
d)Treasury
Prize: Key Finder