top of page

Tesla Microeconomic Analysis (5)

Tesla’s business has been increasing rapidly throughout the entirety of its lifespan, from creation to now. Evidence is shown by the company’s profit and loss statement in that from the fiscal years of 2017 to 2021, Tesla’s revenue has gone up almost by five hundred percent, at 11,759 million dollars in 2017 and 53,823 million dollars in 2021. In fact, we see that the revenue growth is increasing for every single fiscal year from 2017 to 2021. Of course, more revenue makes for more profits, which in return makes for more growth in areas such as research and development, one of Tesla’s greatest aspects. In fact, research and development expenses have almost doubled from 2017 through 2021, from 1,378 million dollars to 2,593 dollars. This increase in research and development could lead to a long run increase in the company’s productivity, supply, and quality, which can in turn lead to the company’s product growing in demand, as more supply can allow for more of the market share, and higher quality, of course, results in more consumers desiring the product. Its EPS, or earnings per share, which also shows that the company is growing in profitability. The EPS calculates the amount of money Tesla makes per share of stock. Though both its basic and diluted EPS grew, I will be using diluted EPS as it better represents the value of Tesla stocks. In 2017, the EPS of Tesla was negative, at -2.37. The EPS also showed patterns of growth for every single year from 2017 through 2021- indeed, in 2020, the company experienced a 164.96 percent growth in their EPS. (Tsla | Tesla Inc. Annual Income Statement - WSJ.) These past tendencies show that the worths of Tesla’s stocks have been rising and will likely continue to rise. This will likely lead to more investors who will pay more, as they see that higher profits can be retained by investing in the company’s stock. (Earnings Per Share (EPS): What It Means and How to Calculate It) All in all, we see that overall, Tesla has been getting financially stronger.

One of Tesla’s flouted avant-garde features is that of autopilot. Up until very recently in 2021, the government has had little to no regulation over autopilot features in cars. But, in June of 2021, the NHTSA, or National Highway Traffic Safety Administration, changed this. The NHTSA announced that any crashes made by self-driving or drivers-assist cars must be reported. Because Tesla’s system, and the self-driving systems of many other vehicle companies, are still in Beta, the NHTSA stated that this would be for the safety of drivers, as there have been numerous deadly crashes involving the auto-driving system. In fact, it is twice as likely for a self-driving car to experience a crash than a regular car. (Are Self-Driving Cars Safer Than Human Drivers?) Though it doesn’t seem like the new enforcement on self-driving cars have really affected the company, if accidents continue to be high, the information may turn off potential customers.


Bibliography

“2020 Impact Report.” Tesla, https://www.tesla.com/en_eu/impact-report/2020.

“2022 Q2 Tesla Quarterly Update” - Tesla-Cdn.thron.com. https://tesla-cdn.thron.com/static/EIUQEC_2022_Q2_Quarterly_Update_Deck_J8VLIK.pdf?xseo=content-position.

“By 2030, You'll Be Astonished Where Tesla Will Be with Master Plan Part 3.” Torque News, https://www.torquenews.com/14335/buy-2030-youll-be-astonished-where-tesla-will-be-master-plan-part-3.

Carlier, Mathilde. “Tesla: Vehicle Sales by Quarter 2022.” Statista, 21 Oct. 2022, https://www.statista.com/statistics/502208/tesla-quarterly-vehicle-deliveries/.

Crider, Johnna. “Auto Industry Spent Less on Advertising in 2022; Tesla Already Spends $0.” TESLARATI, 18 Sept. 2022, https://www.teslarati.com/auto-industry-advertising-tesla-0/.

Fernando, Jason. “Earnings per Share (EPS): What It Means and How to Calculate It.” Investopedia, Investopedia, 22 Nov. 2022, https://www.investopedia.com/terms/e/eps.asp#:~:text=EPS%20indicates%20how%20much%20money,relative%20to%20its%20share%20price.

Fleck, Anna, and Felix Richter. “Infographic: The Top Electric Car Manufacturers.” Statista Infographics, 6 July 2022, https://www.statista.com/chart/27733/battery-electric-vehicles-manufacturers/.

“How Tesla Sets Itself Apart.” Harvard Business Review, 28 Feb. 2020, https://hbr.org/2020/02/how-tesla-sets-itself-apart.

iBEV. “Tesla's Insane Mode of Pricing (NASDAQ:TSLA).” SeekingAlpha, Seeking Alpha, 29 July 2015, https://seekingalpha.com/article/3361615-teslas-insane-mode-of-pricing.

Journal, Wall Street. “Tsla | Tesla Inc. Annual Income Statement - WSJ.” The Wall Street Journal, Dow Jones & Company, https://www.wsj.com/market-data/quotes/TSLA/financials/annual/income-statement.

Nash, Gordon. “Are Self-Driving Cars Safer than Human Drivers?” Way Blog, 20 Apr. 2022, https://www.way.com/blog/are-self-driving-cars-safer-than-humans/#:~:text=Self%2Ddriving%20cars%20also%20have,severe%20injuries%20than%20regular%20accidents.

Plc, GlobalData. “Tesla Inc Company Profile - Overview.” GlobalData, https://www.globaldata.com/company-profile/tesla-inc/#:~:text=Tesla%20Inc%20(Tesla)%20is%20an,energy%20generation%20and%20storage%20systems.

“Tesla Cost of Goods Sold 2010-2022: Tsla.” Macrotrends, https://www.macrotrends.net/stocks/charts/TSLA/tesla/cost-goods-sold.

Tesla Operating Expenses 2010-2022 | TSLA | Macrotrends. https://www.macrotrends.net/stocks/charts/TSLA/tesla/operating-expenses.

“Tesla's Musk Promises Dramatic Cuts in EV Costs.” Automotive News Europe, 23 Sept. 2020, https://europe.autonews.com/automakers/teslas-musk-promises-dramatic-cuts-ev-costs.

17 views0 comments

Recent Posts

See All

Tesla Microeconomic Analysis (6)

Tesla plans to make the use of electrical cars more popular and widespread over the years. Of course, there are environmental reasons for this, but a growth in the use of electrical cars would also le

Tesla Microeconomic Analysis (4)

Two of Tesla’s largest costs would include its cost of revenues (or cost of goods sold) and its operating expenses. The total expenses are almost split around half and half between these two, with the

Comentarios


bottom of page