About Tesla, Inc.

Tesla intends to supercharge the public's passion for electric vehicles. Founded in 2003, the company designs, manufactures, and markets high-performance, technologically advanced electric cars and powertrain components. Tesla sells three models: the Model S sedan and the Model X SUV, which are among the world's top-selling electric cars, and the Model 3 sedan, introduced in 2017. The fuel-efficient, fully electric vehicles recharge their lithium-ion batteries from an outlet, and, depending on a driver's speed, are capable traveling about 300 miles per charge. Tesla is working on self-driving technology with some available on current models. US customers generate more than half of Tesla’s sales. CEO Elon Musk founded PayPal and also runs SpaceX.

Operations

Tesla designs, makes, and sells electric vehicles, which are the Model S, Model X, and Model 3. The company also offers leasing and services.

Through its acquisition of SolarCity in 2016, Tesla created an energy generation and storage segment, which makes and sells stationary energy storage products and solar energy systems to residential and commercial customers. Its Powerwall products integrate with solar panels and can store enough energy to power a two-bedroom home for a day. Tesla's commercial and utility offering, Powerpack, is an energy storage system that offers features like peak shaving, load shifting, emergency backup, self-consumption of solar generation, and demand response.

Vehicle sales account for about 70% of the company’s revenue with leasing, services, and energy generation and storage accounting for about 10% each.

The company maintains a network of around 7,000 charging ports in some 1,100 stations worldwide.

Geographic Reach

Tesla operates through 330 stores and service locations in more than 25 US states and about 25 countries. The US accounts for more than 50% of sales. Markets for which the company breaks out sales are China, more than 15%, and Norway, more than 5%.

Sales and Marketing

Tesla markets and sells cars directly to consumers through an international network of company-owned stores and galleries. Tesla is notable in that it does not use dealerships (due, in some states, to legal restrictions), and this approach means the price of its vehicles are non-negotiable.

Financial Performance

Tesla’s revenue growth has accelerated like its first car, the Roadster sportscar (0-60 in 1.9 seconds), driven by the rising number of vehicles sold each year. The company, howerver, has posted a string of net losses culminating in a loss approaching $2 billion in 2017 as it pours money into research and development and manufacturing.

Tesla’s revenue jumped more than 50% to $11.7 billion in 2017 driven by a 53% increase in automotive revenue. The number of vehicles sold in 2017 rose to more than 82,000, including about 1,700 Model 3s (introduced in July 2017) from about 51,000 in 2016. Automotive leasing revenue was up 45% in 2017 while service revenue increased about 114%. The energy generation and storage segment contributed about 10% of revenue in its first full year as part of Tesla.

As fast as the company’s sales are moving forward, its bottom line is stuck in reverse. The company lost about $1.9 billion in 2017, about $1.3 more than its 2016 loss. The cost of automotive revenue rose 58% in 2017, matching the percentage increase in the number of units sold in the year. Tesla also had higher expenses for R&D, sales, general, and administrative, and interest for 2017.

Tesla had about $3.4 billion cash on hand at the end of 2017, about the same as it did in 2016. In 2017, the company had capital expenditures of $4 billion for Model 3 production, design, acquisitions, and installation of solar energy systems.

Strategy

In 2017 Tesla entered the mass market vehicle world with the July 2017 introduction of the Model 3, which has a $35,000 starting price. But production wasn’t exactly mass-market caliber as the company struggled to match capacity with demand. The company worked in early 2018 to ramp up production, hiring more workers and trying to speed up manufacturing processes with a goal of turning out 2,500 Model 3s a week.

Tesla not only develops electric-powered cars, it is developing autonomous car technology that include cameras, sensors, radar, and an on-board computer. Many functions driving can be turned over the car, but the driver maintains responsibility how it behaves.

Electricity isn't just for cars as far as Tesla is concerned. The company is developing Tesla Semi, an electric version of diesel-powered semis, built for hauling heavy payloads around the country. The company said it will have a 500-mile battery range. Tesla intends to use the truck for its own logistics, but PepsiCo, Anheuser Busch, J.B. Hunt, UPS, and FedEx have placed orders for the trucks. Tesla plans to begin production of the semis in 2019.

While most automakers have generated armies of suppliers providing parts, Tesla tries to handle as much manufacturing as it can in-house, including batteries and drive trains. The company spreads production costs for batteries across its energy and storage unit, but the costs of funding such manufacturing operations eat up a lot of cash.

Tesla pioneered the electric car market of the 21st century, but other automakers are appearing bigger in the rearview mirror. Companies such as Honda, Toyota, Ford, GM, Nissan, BMW, Daimler are investing in development programs designed to shift large parts, in some cases all, of their fleets to electric power in the coming years. Volvo is to switch to all electric vehicles in 2019. Tesla has delivered highly ranked vehicles so far, but the automakers can call on deep resources, extensive supply chains, and global markets in developing and selling their vehicles.

Mergers and Acquisitions

Tesla made two acquisitions in 2017 to beef up its factory automation technologies. Minnesota-based Perbix had been a parts supplier to Tesla and that acquisition brings its capabilities in-house. Tesla bought Grohmann Engineering , based in Germany, for $109 million to improve the speed and efficiency of its manufacturing processes.

In 2016 Tesla made its most important acquisition to date when it purchased SolarCity in a deal valued at $2.6 billion. Both companies are led by Elon Musk and expect to achieve cost synergies of $150 million in the first full year after closing. By combining Tesla's new electric vehicles with SolarCity's newest solar products, the companies expect to lower hardware costs, reduce installation costs, and improve their manufacturing efficiency. The acquisition also created generation and storage, a new segment that designs, manufactures, installs, and sells stationary energy storage products and solar energy systems to residential and commercial customers.

Company Background

Tesla Motors is named for Nikola Tesla (1856-1943), the renowned Serbian-American engineer and inventor. Tesla Motors was incorporated in July 2003.

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Tesla, Inc.

3500 Deer Creek Rd
Palo Alto, CA 94304-1317
Phone: 1 (650) 681-5000
Fax: 1 (650) 413-6210

Stats

  • Employer Type: Public
  • Stock Symbol: TSLA
  • Stock Exchange: NASDAQ
  • Chairman, CEO, and Product Architect: Elon Musk
  • Chairman, CEO, and Product Architect: Elon Musk
  • CTO: Jeffrey B. Straubel
  • 2017 Employees: 37,543

Major Office Locations

  • Palo Alto, CA

Other Locations

  • Phoenix, AZ
  • Brea, CA
  • Buena Park, CA
  • Burbank, CA
  • Burlingame, CA
  • Canoga Park, CA
  • Cathedral City, CA
  • Fremont, CA
  • Fresno, CA
  • Hawthorne, CA
  • Hercules, CA
  • Lathrop, CA
  • Los Angeles, CA
  • Mission Viejo, CA
  • Newark, CA
  • Newport Beach, CA
  • Palm Desert, CA
  • Riverside, CA
  • Rocklin, CA
  • Sacramento, CA
  • San Diego, CA
  • San Rafael, CA
  • Santa Clara, CA
  • Seaside, CA
  • Sunnyvale, CA
  • Torrance, CA
  • Van Nuys, CA
  • Walnut Creek, CA
  • Denver, CO
  • Littleton, CO
  • Parker, CO
  • Washington, DC
  • Newark, DE
  • Boca Raton, FL
  • Dania Beach, FL
  • Miami Beach, FL
  • Riviera Beach, FL
  • Honolulu, HI
  • Chicago, IL
  • Highland Park, IL
  • Oak Brook, IL
  • Villa Park, IL
  • Hingham, MA
  • Watertown, MA
  • Beltsville, MD
  • Rockville, MD
  • Grand Rapids, MI
  • Troy, MI
  • Independence, MO
  • Kansas City, MO
  • Matthews, NC
  • Raleigh, NC
  • Rocky Mount, NC
  • Cranbury, NJ
  • Paramus, NJ
  • Pine Brook, NJ
  • Albuquerque, NM
  • Las Vegas, NV
  • Brooklyn, NY
  • Elmsford, NY
  • New York, NY
  • Syosset, NY
  • White Plains, NY
  • Blue Ash, OH
  • Cleveland, OH
  • Columbus, OH
  • Portland, OR
  • King Of Prussia, PA
  • Brentwood, TN
  • Austin, TX
  • Houston, TX
  • The Woodlands, TX
  • Draper, UT
  • Salt Lake City, UT
  • Bellevue, WA
  • Seattle, WA
  • Aartselaar, Belgium
  • Bruxelles, Belgium
  • Hasselt, Belgium
  • Sint-Martens-Latem, Belgium
  • Zaventem (Brucargo), Belgium
  • Ciudad De Mexico, Mexico
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