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Tesla Financial Plan
1
Tesla Financial Plan
Antoinette Winfield University of Phoenix
FIN/571: Corporate Finance
Bryan Carey
July 31, 2023
Business Case
Tesla Financial Plan
2
This financial plan is for Tesla. Tesla is an automobile company that sells cars that run on
electricity instead of gasoline. On the stock market its ticker is TSLA. Tesla needs funding to make the current charging station universal so that any electric car can charge. They also need to build more universal chargers for the future. It is predicted that electric car sales will increase in the coming years. Tesla can use federal funding to improve the current chargers as well as use the money to build universal chargers. A downside of using federal funding is if you do not follow or meet guidelines you will not get the funding. Tesla can also borrow money from a bank
to make the improvements as well as build more chargers. By getting a loan the bank can deny you or the interest rates can be so high that you can be paying the loan back for years. The company can also issue shares of stock to be sold to raise the money needed to improve the current chargers as well as build more. By issuing shares of stocks there can be an issue with the price decreasing. If the price decreases the company can lose some of the money to invest in the current project. The current interest rate is 5.5% (Wile, 29023). The current stock sales price is $266.44 as of July 28, 2023 (Dow Jones & Company, n.d.). As a business manager I would suggest that we make all modifications based on the Federal regulations to receive the federal funding. If we cannot meet the requirements, then we will not get the funding. I would say to go for a loan. With the way our revenue has increased over the past three years I do not see the bank
turning us down so that we can make improvements to the current chargers and then build new universal chargers.
Profit and Loss Revenue for Tesla over the past three years has increased. In 2020 it was 31.536 billion. In 2021 it was 53.823 billion and in 2022 it was 81.462 billion. Between 2020
Tesla Financial Plan
3
and 2021 revenue increased by 22.287 billion. Revenue between 2021 and 2022 increased by 27.639 billion. Based on the previous three years I think that revenue for 2023 will be 110.462 billion. I also think that for 2024 it will be 137 billion and for 2025 it will be 145 billion. This revenue is not just from the sale of cars but from the sale of chargers as well as the income received from the payments for charging. I estimate the direct cost for this project to be around 1 million dollars. I also estimate marketing to be around $40,000. I think it would cost this amount because Tesla is going to have to advertise on television, billboards, online and in print and not just to Tesla customers but to all electric car owners. To make the current chargers universal and to build universal chargers the labor estimate is $300,000. I estimate the supply costs to be around $200,000
this is because the parts used for the universal chargers has to be made in the United States if Tesla wants to receive the federal funding. Based on the history of the company and the current stock rate I think the estimated capital would be $600,000. Year
Projected Revenue
2023
$110.462 Billion
2024
$137 Billion
2025
$145 Billion
Expenditures
Estimate
Direct Costs
$ 1 Million
Capital
$ 600,000 Marketing
$40,000
Labor
$300,000
Supply Costs
$200,000
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Tesla Financial Plan
4
In conclusion, working on a financial plan can be a great thing for a large
company. The financial plan allows the company to think about ways to receive funding
and the pros and cons of the ways. Working with a financial plan also allows the
company to look at their financials and estimate what their revenue will be in the future
as well as estimate what the expenditures will be for the project, they are looking to
invest in. References
Dow Jones & Company. (n.d.). The Wall Street Journal. https://www.wsj.com/market-data/quotes/TSLA/financials
Dow Jones & Company. (n.d.). The Wall Street Journal. https://www.wsj.com/market-data/quotes/TSLA/historical-prices
Tesla Financial Plan
5
Wile, R. (2023, July 26). Federal Reserve raises interest rates to highest point in more than 20 years
. NBCNews.com. https://www.nbcnews.com/business/economy/interest-rate-hike-
july-2023-how-much-higher-federal-reserve-rcna96210
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