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Tesla Valuation Based on 5 Year Outlook

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Amazon began it's continous string of profits in 2015. I used the Amazon P/E multiples to project Tesla's value.
With this I get a fair value of $1,200 by the end of this year and $4,500 by 2026.
I am using GAAP EPS for Tesla although, I believe the higher non-GAAP number is a better gauge of profit but I use the GAAP number to be consistent with Amazon's numbers.


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Key Points:
To meet the 6m units in 2026,
- Model Y will need to become the best selling vehicle in the world
- the Cybertruck launch will need to go well
- the new Compact vehicle will need to launch by mid 2023
- a new vehicle will need to be introduced by 2025. I have selected a van but other analysts include either a small crossover (smaller Model Y) or a city car (smaller than compact).
 
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KeyPoints
- In 2022, Model S/X margins improve due to the recent $5k price increase and reduced cost to manufacture the refreshed models.
- Margins on Models 3/Y improve as sales start to skew more toward the higher margin Model Y in combination with increased manufacturing efficiencies.


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Key Points:
- Increased scale brings improved Auto margins
- After solving the battery constraint issue, Energy & Storage margins reach 25% margins by 2025.
 
It would be interesting to see what Tesla makes per kWh of batteries and extrapolate that forward to 3 TWh of annual production. A super rough estimate: Megapacks are around $300-400/kWh. A model 3 and Y are about $600/kWh. Model S and X are closer to $1000/kWh. So a rough guess is 3TWh, which is 3 billion kWh, would be more than $1T in revenue.
 
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By comparison for 2026 my own model has:
= $334 bn revenue
= 18% GM%
= $58 bn GP
= 16% NM%
= $53 bn NP
= 515 GWh battery production

All this is approximately what you have, except you do not explicitly give a GWh number. Care to share ?

(I tend to agree with you on share price.)
I have to compute that number as I have it in a few different schedules. I will post it tomorrow.
 
Excellent to see your estimates!
I also think that you should plug an average kWh pack size per vehicle model to allow easy GWh estimates for each year. You’ll have to do the same for energy division, but you have the framework to reveal this.
I feel your semi margins are way too high. You have it higher than MS/MX is for this year, yet it’s only slightly more expensive than a plaid but with almost 1,000kWh battery….

Thank you for sharing!
 
Excellent to see your estimates!
I also think that you should plug an average kWh pack size per vehicle model to allow easy GWh estimates for each year. You’ll have to do the same for energy division, but you have the framework to reveal this.
I feel your semi margins are way too high. You have it higher than MS/MX is for this year, yet it’s only slightly more expensive than a plaid but with almost 1,000kWh battery….

Thank you for sharing!

Yes - my Semi cost of production was really a stab in the dark. The low number of deliveries makes the Semi insignificant to the overall results.
I'll try digging around for a better cost estimate.
 
1/6

Amazon began it's continous string of profits in 2015. I used the Amazon P/E multiples to project Tesla's value.
With this I get a fair value of $1,200 by the end of this year and $4,500 by 2026.
I am using GAAP EPS for Tesla although, I believe the higher non-GAAP number is a better gauge of profit but I use the GAAP number to be consistent with Amazon's numbers.


View attachment 685636
This is totally a question, not criticism, is it Apples-to-Apples* to use Amazon’s p/e?
I am not well versed with Amazon’s revenue distribution across its divisions (starting 2015), thus not sure about the margins, and the comparison to Tesla (from 2021).

*I did not intend to bring in Apple into this discussion :p
 
1/6

Amazon began it's continous string of profits in 2015. I used the Amazon P/E multiples to project Tesla's value.
With this I get a fair value of $1,200 by the end of this year and $4,500 by 2026.
I am using GAAP EPS for Tesla although, I believe the higher non-GAAP number is a better gauge of profit but I use the GAAP number to be consistent with Amazon's numbers.


View attachment 685636
Does this factor in the newly released FSD subscription?
 
This is totally a question, not criticism, is it Apples-to-Apples* to use Amazon’s p/e?
I am not well versed with Amazon’s revenue distribution across its divisions (starting 2015), thus not sure about the margins, and the comparison to Tesla (from 2021).

*I did not intend to bring in Apple into this discussion :p

I too wonder if Amazon's current P/E could be low for Tesla in 2026, given that Tesla will still have enormous growth ahead. @The Accountant's 2026 vehicle production estimate (6.3M vehicles) is only a third of Tesla's announced 2030 target (20M vehicles). Has Amazon guided for (or does anyone expect) a tripling of Amazon's revenues in the next four years?

Edit: On the other hand, using Amazon as a precedent is a nice tactic to impress simpleminded analysts who don't understand Tesla.
 
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