The Cash Cows Mathias Bohn, Rodrigo Garcia, Marlène Luce, Roman Zanoli HEC Paris Paris, March 1, 2019

The Cash Cows
Mathias Bohn, Rodrigo Garcia, Marlène Luce, Roman Zanoli

HEC Paris
Paris, March 1, 2019
The Road Ahead
By
The Cash Cows

“If I had asked people
what they wanted, they
would have said faster
horses…”
- Henry Ford
Table of contents
Executive Summary p. 7
I. Market Analysis p. 9
II. Strategic Fit p. 17
1. General Motors
2. Tesla
3. Strategic Fit
III. Financial Analysis p. 33
1. Comparables
2. Discounted Cash Flow
3. Synergies
IV. Feasibility p. 51
V. Alternative Solution p. 56
VI. Conclusion p. 63
Appendix p. 65
Bibliography p. 95
Executive Market Strategic Fit Financial Feasibility Alternative Conclusion |4

Summary Analysis Analysis Solution
Table of abbreviations
Abbreviation Explanation Abbreviation Explanation
ADAS Advanced Driver Assistance System km Kilometers
AV Autonomous Vehicle kWh Kilowatt hour
BEV Battery Electric Vehicle lbs Pounds
bn Billion m Million
CAGR Compound Annual Growth Rate M&A Mergers & Acquisitions
DCF Discounted Cash Flow mph Miles Per Hour
DOJ Department Of Justice NPV Net Present Value
EBIT Earnings before Interest and Taxes OEM Original Equipment Manufacturer
Earnings before Interest, Taxes, Depreciation, and OICA International Organization of Motor Vehicle Manufacturers
EBITDA Amortization OPEC Organization of the Petroleum Exporting Countries
EV Electric Vehicles P/E Price-to-Earnings ratio
EV Enterprise Value PHEV Plug-in Hybrid Vehicle
FCF Free Cash Flow R&D Research & Development
FTC Federal Trade Commission RMB Renminbi
FY Fiscal Year SEC Securities and Exchange Commission
GM General Motors SEO Secondary Equity Offering
HHI Herfindahl-Hirschman Index SUV Sport Utility Vehicle
HQs Headquarters USD United States Dollars
ICE Internal Combustion Engine WACC Weighted Average Cost of Capital
IEA International Energy Agency YE Year Ending
IPO Initial Public Offering
JV Joint Venture

– EXECUTIVE SUMMARY
The right choice for

General Motors
GM should not acquire Tesla, but instead acquire Rivian, an EV truck manufacturer
whose products and brand will have strategic value for GM in the future EV landscape
Should General Motors acquire Tesla?

GM should not acquire GM should acquire
The capital market currently overvalues Tesla by 18% Rivian’s brand and products, including an electric pickup
truck, would be a perfect fit with GM’s core customers
Non-substantial synergies between GM and Tesla do not
compensate for the high premium that needs to be paid, and Rivian’s technologies, such as battery packs and self-
an acquisition would, therefore, destroy USD 26.2bn in value driving tech, could be pushed by GM’s knowledge
An acquisition is not feasible from a financial perspective; After analysing the potential price and shareholder’s
a merger would make Elon Musk the major shareholder of structure, the acquisition is feasible for GM
the conglomerate; and Tesla has preventive measures in place

I MARKET ANALYSIS
The future of the

automotive industry
THE FUTURE OF THE AUTOMOTIVE INDUSTRY
By 2030, more than 50 percent of the automotive industry’s revenue will be in disrupted
business areas, such as electric vehicles (EVs) and autonomous vehicles (AVs)
More than 50 percent of the automotive industry’s revenue will be in disrupted business areas by 2030
Global automotive ecosystem revenues, in USD trillion, 2015-2030e
56% of 2030 revenues
will be coming from 7.7
Revenues from traditional
disrupted opportunities
business areas will drop
by 38% due to disruption
5.5
0.1 +4.3 4.3
-2.1
5.4
3.4
2015 2030e
Disrupted business areas, such as EVs, AVs and e-hailing Traditional business areas, such as taxis and nonautonomous vehicles
Source: Dhawan, R., Hensley, R., Padhi, A. and Tschiesner, A. (2019, McKinsey Quarterly)

ELECTRIFIED VEHICLE SALES
In the same year, 28% of all new car sales will be electric, but since forecasts have been
adjusted upwards every year in the past, this will most likely happen even sooner
By 2030, more than every fourth car sold will be electric… … and this will likely happen sooner, considering past forecasts
Annual global light duty vehicle sales in million cars, 2015-2040e Bloomberg forecasts of new vehicle sales being electric, 2016-2018
120 100%
108 110 Bloomberg is not alone – other
110 105 90% global EV sales forecasts have +57%
100
100 been adjusted upwards every 55
90 80% year by International Energy 54
90 Agency and OPEC +39%
50 70%
80 62 43 43
70 55.0% 60%
75
+27% 35
60 43.0% 50% 31
50 Some analyst even say 28
that ICE sales peaked in 40% 24
40 28.0% 22
2018 and that all future 30% +57%
growth will come from EVs 53
30 38 20% 11
20 11.0% 24 8
7
10 10%
2.3%
6 8 7
0 0%
2015 2019e 2025e 2030e 2035e 2040e 2025e 2030e 2035e 2040e
EVs as % of new sales ICE* BEV* PHEV* BNEF 2016 forecast BNEF 2017 forecast BNEF 2018 forecast
By 2040, 55% of all new car sales will be electric, and ~560 million Forecasts have been revised upwards every year in the past
EVs will be on the road, representing 33% of the global fleet couple of years, with the most change in the short and long term
Note: *: ICE: Internal Combustion Engine, BEV: Battery Electric Vehicles, PHEV: Plug-in Hybrid Electric Vehicles
Source: Bloomberg (2017, 2018), MacDonald, J. (2016, Bloomberg), McGee, P. (2018, Financial Times)
Executive Market Strategic Fit Financial Feasibility Alternative Conclusion | 10

THE PRICE OF ELECTRIFIED VEHICLES
Average purchase prices of EVs have been falling continuously and are now projected to
be on par with ICE vehicles around 2025, driven by a dramatic decline in battery cost
Purchase prices of EVs have been falling continuously… … driven by a dramatic decline in battery cost
Development in EV purchase price, in USD thousand, 2016-2030e Lithium-ion battery costs, in USD per kWh, 2010-2030e
43.0
1,000
37.0 900
800
48% 29.5 30.0
39% 700
26.0
28.0 26% 600
18% 100 USD per kWh is
5% 8% 9% 500
9% generally referred to as the
400 point where EVs become
cost competitive with ICEs
300
47% 53% 66% 73% 200
100
0
2016 2019e 2025e 2030e 2010 2015 2020e 2025e 2030e
ICE Battery Powertrain Vehicle McKinsey & Co Bloomberg The Economist
The average purchase price of EVs is projected to be on par with Lithium-ion battery cost has decreased dramatically and is
ICEs in 2025, driven by declining battery cost projected to reach USD 100 per kWh between 2022 and 2030
Source: : Bloomberg (2017, 2018), MacDonald, J. (2016, Bloomberg), McKinsey & Company (2017), The Economist (2017)

GENERAL MOTORS’ CORE MARKETS
CHINA | In 2018, EV sales topped 1m for the first time, outstripping any other country,
despite overall vehicle sales shrinking, marking China’s projected global lead in EV sales
In 2018, EV sales topped 1m in China for the first time… … and China will lead the charge as EV sales surge globally
Vehicle sales in China, in million of vehicles, 2014-2018 Annual global electric vehicle sales, in million cars, 2015-2030
24.38 24.96 By 2025, China’s leaders want 7 29.8

25 23.80 15% 30
million cars sold every year, or about 4.5
21.21 20 percent of the total, to be EVs,
19.71 25
20 even higher than Bloomberg’s forecast
6.0
10% 20 The Chinese +32%
15 government is currently
24.04 24.38 22.78 15 offering large subsidies 7.8
21.00 and exemptions from
10 19.63 10.7
4.5% 5% costly license plate fees
10 if consumers buy EVs 1.9
5 2.4% 2.4
1.4% 5 11.5
1.0% 2.2
0.4% 5.2
0.07 0.21 0.34 0.58 1.02 0.4
0 0% 0
2014 2015 2016 2017 2018 2015 2019e 2025e 2030e
China ICEs China EVs China EVs as % of new sales Rest of World USA Europe China
In 2018, vehicle sales in China, the world’s largest car market, China is not only the biggest global car market today but is also
shrank for the first time since 1990, but EV sales kept on rising projected to be the world leader in electric vehicles going forward
Source: Bloomberg (2017, 2018), Hancock (2019, Financial Times), IEA (2019), InsideEVs (2019d), OICA (2019), MacDonald, J. (2016, Bloomberg), Zhang, Y., Naughton, K., Rauwald, C. and
Sachgau, O. (2018, Bloomberg)
USA | In the US, EV sales are not climbing as fast as in China, partly due to a shift in
consumer preferences towards pickup trucks and SUVs, which have fewer EV options
EV sales in the US has continued to climb in recent years… …, however, US consumers are more interested in large cars…
Vehicle sales in the US, in million of vehicles, 2014-2018 Vehicle sales in the US, in million of vehicles, 2014-2018
70% of the US market in 2018
20 10% -9%
+12%
17.85 17.89 17.57 17.69 +3%
16.86 9%
8% 7.69 7.57 6.90
15 6.15 5.36 6.08 6.38 6.97
7% 4.75 5.18 4.91 5.04 5.36 4.42 5.10
6%
Sedans Pickup trucks SUVs
10 5%
16.74 17.74 17.73 17.37 17.33 2014 2015 2016 2017 2018
4%
… due to a shift in preferences, which is profitable for car makers
3%
5 2.1%
2%
0.9% 1.2%
0.7% 0.6% 1%
0 0.12 0.12 0.16 0.20 0.36 0% Shift in demand Transaction prices Luxury models
2014 2015 2016 2017 2018 • Low fuel prices and • SUVs’ prices are 39% • Consumers are
USA ICEs USA EVs USA EVs as % of new sales a strong economy to 51% higher than increasingly willing to
are incentivizing sedans, but have pay $70,000 to
Despite overall flat vehicle sales in the US, sales of electric consumers to buy minimal additional $100,000 for modified
vehicles has continued to climb, but not as much as in China larger vehicles manufacturing cost pickup trucks
Source: Cohen, A. (2018, Forbes), Eisenstein, P. (2018, CNBC), Ferris, R. (2018, CNBC), General Motors (2016, 2019b), Irle, R. (2018, EVVolumes), Snyder, J. (2017, Automotive News)

USA | Major car manufacturers are, therefore, readying their product portfolios for a soon-
to-be-the-present future, in which their core customers want their favorite cars to be EVs
Vehicles in the US CAGR 2014-2018 EV models in segment EV models in segment

Percent of sales, 2018 Current models Announced models
Model S/3 Chevy Bolt i3 Leaf i-MiEV ID Mission E Rapide E Urban EV

Sedans 30.3% -9%
Roadster E-golf Ioniq E i8 Focus E XJ Taycan Electric
Model X Soul e6 RAV4 EV EQ Q6 e-tron X3 Model Y

SUVs 39.4% +12%
XC90 T8 X5 Xdrive I-PACE Kona XC40 BUDD-e Niro
Pickup Workhorse F-150 electric Pickup truck

30.3% +3%
trucks W-15*
Limited availability of EV models in the growing and highly profitable
pickup truck segment represents a huge market opportunity
Note: *: The W-15 is not a pure BEV, but a plug-in range extended electric pickup (PHEV) designed for fleets. Workhorse have previously manufactured trucks for Fed Ex and U.S Postal Service;
Source: General Motors (2016, 2019b), Companies website

II STRATEGIC FIT
1 2 3
GENERAL MOTORS TESLA STRATEGIC FIT
The state of GM The state of Tesla The fit between them

II STRATEGIC FIT
1 2 3

GENERAL MOTORS OVERVIEW
General Motors is one of the largest car manufacturers in the world with a clear vision for
the future and holds market leading positions in the US and China
GM is one of the largest car manufacturers in the world… … and is selling most of its cars in the US and China
Revenues of automotive manufacturers, in USD billion, FY2018* GM’s vehicle sales, in number of vehicles, 2018
USA Europe China
GM has a vision of Zero 3.0m vehicles sold 0m vehicles sold 3.6m vehicles sold
Crashes, Zero Emissions,
and Zero Congestion 17% 83% 0% 100% 14% 86%
0
3.0m Sold through
276 270 local Joint
3.6m
192 Ventures
160 147 145 134 132 118 112
1.3m
0.6m
Brand portfolio
Other Americas Rest of World
1.3m vehicles sold
0.6m vehicles sold
15% 85% 3% 98%
No. vehicles sold GM’s market share Other players’ market share
Note: *: FY 2018 or most recent publicly available filing
Source: Thomson Reuters Eikon (2019), General Motors (2019b)

GENERAL MOTORS’ PERFORMANCE IN THE MARKET
GM has been showing stable performance, which is largely due to its great performance
with its core customers, the truck segment, of which it has a 25% share of the US market
GM has been showing stable performance in the past years… In the US, GM is doing very well within pickup trucks and SUVs…
GM’s revenues and operating margin, in billion USD, 2014-2018 GM’s vehicle sales in the US, in million of vehicles, 2014-2018
200 10 3.1 CAGR 2014 – 2018
155.9 2.9 3.0 3.0 3.0
152.4 149.2 145.6 147.0 8
150 0.9 0.9 0.7 0.6 Sedans: -12.4%
6 1.1
100 5.8% 5.9% 1.3 1.4 Trucks: 4.1%
3.0% 4 1.3 1.3
1.1
50 1.0% 3.2% 2 SUVs: 7.0%
0.7 0.9 0.8 1.0 1.0
0 0%
2014 2015 2016 2017 2018 2014 2015 2016 2017 2018
Revenue Operating income Sedans Pickup trucks SUVs
… while exiting the European market completely in 2017 … and is dominating the competition when it comes to trucks
GM’s vehicle sales, in million of vehicles, 2014-2018 Market share in vehicle sales in the US, 2018 GM Others
9.9 10.0 10.0 9.6
8.4 10.4% 14.8% 16.7%
3.4 3.6 25.4%
NA* 3.6 3.6
3.5
Asia** 4.4 89.6% 85.2%
4.5 4.6 4.7 74.6% 83.3%
SA*** 4.2
For five consecutive years, GM has sold more
Europe 1.3 1.2 1.2 0.7 0.7 pickup trucks in the US than any other manufacturer
2014 2015 2016 2017 2018 Sedans Pickup trucks SUVs Total
Note: *: North America; **: Asia/Pacific, Middle East, Africa; ***: South America
Source: General Motors (2019b)

GENERAL MOTORS’ RESPONSES TO THE AV AND EV TREND
GM has taken a leading position within autonomous vehicles and had the second largest
share of EVs sold in the US last year, having also announced multiple new EV initiatives
GENERAL MOTORS’ AV RESPONSE GENERAL MOTORS’ EV RESPONSE
GM has made headway in the AV market by acquiring Cruise… GM holds the second largest EV share, driven by two models…
Share of EVs sold in the US, 2018 Others GM Tesla
• Founded in 2013 and acquired by General
Motors in 2016
37%
Estimated value* • Deeply resourced, with more than 1,100
$14.6bn employees and 180 vehicles registered 10% The Chevrolet Volt The Chevrolet Bolt
• Launched in 2010, • Launched in 2016, it was the
• $5 billion in external capital raised in 2018 the plug-in hybrid only 238-mile range BEV for
has only seen $37,495, until the Hyundai
$1.0bn 53%
• Planning to commercialize at scale in 2019 limited success Kona EV launched this year
2016 2018
… and is now the clear number two in miles driven after Waymo In the end of 2018, GM sold its 200,000th electric vehicle
2018 in the US – the second car manufacturer to do so after Tesla
Miles driven per disengagement*, December 2017 - November 2018
11,154 … and has announced multiple new EV initiatives going forward
GM Cruise reported the second- • The Cadillac will use GM’s “BEV3” next-gen
5,204
lowest disengagement rate**,
321% better than a year ago
? electric vehicle platform, ready by 2021
• GM plans to introduce 20 electric vehicles

The Cadillac EV globally by 2023 in the US and China
1,922
1,028 1,022 • Cadillac will become
210 206 • GM aims to sell 1 million electric vehicles a
the leading electric
Waymo GM Cruise Zoox Nuro Pony.AI Nissan Baidu vehicle brand of GM year by 2026, many of them in China
Source: CA.GOV (2019), InsideEVs (2019c), Seeking Alpha (2018a), General Motors (2019a), Bloomberg (2019)
Note: *: Values estimated based on investments of GM in ‘16 and Honda/Softbank in ‘18; **: A disengagement means "deactivation of the autonomous mode when a failure of the autonomous technology is detected
or when the safe operation of the vehicle requires that the autonomous vehicle test driver disengage the autonomous mode and take immediate manual control of the vehicle."

GENERAL MOTORS’ STRENGTHS AND CAPABILITIES
GM is also greatly positioned for growth as a share leader in the world’s largest markets
and is strong within capacity and supply chain management as well as product design
GM is currently a market share leader in the US and China… GM also shows great strengths within product design…
GM ranking in terms of country market share, 2018 Research and development expenditures, in billion USD, 2016-2018
• Greatly positioned for growth in the +7% • High R&D spending in
+11%
#1 #2 largest car markets in the world autonomous and electric vehicles
USA China 7.3 7.8
6.6
• Largest foreign automaker in China • R&D spending show positive
and maintains numerous very correlation with revenues and
successful joint ventures customer satisfaction
2016 2017 2018
… with great production capabilities and capacity management … as well as favorable and improving supplier relations
Difference production and sales in China, in thousands of cars, 2018 OEM Supplier Relation Index*, 2015-2018
Dongfeng HONDA 55 350 -0.9%
SAIC Volkswagen 22 -5.2%

300
BMW Brilliance Automotive 12 +28.1%
Beijing Benz Automotive 7 250 -4.2%

In the same period of 2018, GM
SAIC GM 1 managed to sell more than 3.64
million cars in China 200 -8.9%
FAW-Volkswagen -5 -25.4%
0
-5 0 5 10 15 20 25 30 35 40 45 50 55 2015 2016 2017 2018
Note: *: A score above 250 is considered as adequate, and a score above 350 is considered as good to very good
Source: Statista (2019b, p. 22), MarketLine (2018, p. 57), Hancock (2019, Financial Times), General motors (2019b), Henke (2017, Planning Perspectives Inc.)

GENERAL MOTORS’ KEY CHALLENGES
However, none of GM’s brands are among the top in the US, and GM is highly dependent
on pickup trucks and SUVs with high emissions for which they do not offer an EV solution
None of GM’s brands are among the top ten carmaker brands… GM is also highly dependent on vehicles with large emissions…
Most valuable global brands for carmakers, in billion USD, 2018 Global warming emissions scores by major automakers, 2018
30.0 Tesla’s brand increased 60% 112 116
25.7 25.6 108
in value from 2017 to 2018 95 98
83 89 90
#1 12.7 12.7 11.4
#2 #3 9.6 9.4 In 2018, GM’s cars had the second
6.4 6.0 largest environmental impact of the
#4 #5 #6 #7 #8 34
#9 #10 8 largest automakers, which is
Toyota MB* BMW Ford Honda Nissan Audi Tesla MS** VW especially pronounced in their
pickup truck and SUV segments
… even though GM is the carmaker that spends the most on ads
Tesla Honda HK*** Nissan VW Toyota Ford GM FC****
Advertising spending in the US, in million USD, 2017
… and GM does not currently have an EV for its core customers
General Motors Co. 3,244
2,454
# of EVs sold, 2016-2018 2016 2017 2018
Ford Motor Co.
Fiat Chrysler Automobiles 1,975 -26% -23% • GM’s CEO Mary Barra has not
Toyota Motor Corp. 1,780 announced any plans that GM is
24,739 20,349 23,297
Honda Motor Co. 1,331 building an all-electric pickup truck
18,306 18,019
Nissan Motor Co. 1,087
746 In 2019, The Chevrolet • In 2019, Mary Barra also said that GM
Volkswagen
Volt will be discontinued, does not expect to turn a profit on
Kia Motors Corp. 660 579
to enable more focus on EVs until "early next decade”
Hyundai Motor Co. 588 BEVs for GM Chevrolet Chevrolet
Subaru Corp. 431 Volt PHEV Bolt BEV GM expects higher year-over-year sales
for the Bolt in major markets in 2019
Note: *: Mercedes-Benz; **: Maruti Suzuki; ***: Hyundai-Kia; ****: Fiat Chrysler
Source: Cooke, D. (2018, Union of Concerned Scientists), MarketLine (2018), GM Authority (2019a, 2019b), General Motors (2019c), Irle, R. (2018, EVVolumes), Statista (2019b), InsideEVs
(2019c), Kantar Millward Brown (2018) , Ferris, R. (2019, CNBC)
II STRATEGIC FIT
1 2 3

TESLA OVERVIEW AND HISTORY
Tesla was an early pioneer in the EV market, but “production hell” challenged its vision of
launching a mass market vehicle with a $35,000 price tag until the second half of 2018
Tesla was an early pioneer in the EV market and BEV segment Tesla’s “production hell” challenged its scale-up until Q3-2018
Number of Tesla vehicles delivered worldwide, Q3-2015-Q4-2018
• Founded in 2003 and joined by current CEO
Elon Musk in 2004 100,000 Tesla Tesla Tesla
90,000 delivers delivers meets its
+6,338% • Popularized EVs in 2008 with its launch of its first its first production
the world’s first luxury EV, the Tesla Roadster 80,000 Model X Model 3 goal of
41,850
70,000 5,000 cars
• IPO-ed in 2010 and has since then grown in a week
from 650 to 41,850 employees 60,000 During 2018, Tesla
delivered 245,240
50,000 electric vehicles, up
650 • In 2017, Tesla launched the Model 3 with the 138% year-over-year
vision of it becoming Tesla’s mass market 40,000
Employees Employees
at IPO, 2010 today, 2019 vehicle with a $35,000 price tag 30,000
Tesla sells three EVs and offers an extensive charging network 20,000
10,000
0
Q3- Q4- Q1- Q2- Q3- Q4- Q1- Q2- Q3- Q4- Q1- Q2- Q3- Q4-
2015 2015 2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 2018
Tesla’s current lineup Tesla’s charging network
• Tesla Model S: A luxury liftback • ~13,000 Superchargers globally In 2017, CEO Elon Musk predicted that Model 3 production would
• Tesla Model X: A luxury SUV • Aims to cover 95% to 100% of the be up to 5,000 units per week by December, however, Tesla did
• Tesla Model 3: A luxury sedan population in all active markets not manage to reach this target before July 2018
Source: Gibbs (2018, Guardian), Randall, T. and Halford, D. (2019, Bloomberg), Statista (2019d), Tesla Inc. (2016, 2017, 2018, 2019a, 2019b), Vlasic (2017, New York Times)

TESLA’S PERFORMANCE IN THE MARKET
After managing to ramp up production, Tesla is not only dominating the BEV segment, but
is also threatening conventional carmakers, and sales are expected to grow more in 2019
Tesla is not only dominating the BEV segment… … but also the luxury car segment in the US…
Tesla’s BEV sales in the US, in thousand of vehicles, 2017-2018 Premium vehicles sold in the US, in thousand of vehicles, 2018
139.8 Tesla’s Model 3 was also the best-selling
In the second half of 2018, ~70% passenger car in terms of revenue in the
91.2
of Model 3 customers made a 111.6 US in both Q3 and Q4 in 2018
purchase without a test drive 80.6
76.0 70.0 69.7
#1 65.7 63.6 62.1 60.6
+22% #2
61.7 #3 #4 #5 #6 #7 #8 #9
54.3
37.4 Tesla Lexus BMW Audi Mercedes- BMW Acura Lexus Cadillac
30.4 30.5 Model 3 RX 3/4 Q5 Benz GLC X3/X4 RDX NX XT5
29.7
6.3 15.7
22.6 23.2 6.0 8.2
8.1
8.5 … and sales are expected to grow further in 2019
4.3 4.6 8.4 7.4 4.5 5.0
6.1 5.1 7.4 Number of Tesla vehicles delivered globally, 2018-2019e
5.3 5.5 7.6
12.2 13.4 15.4 15.5 11.7 11.2 10.7 13.7 +63%
• CEO Elon Musk predicts that Tesla will
Q1-2017 Q2-2017 Q3-2017 Q4-2017 Q1-2018 Q2-2018 Q3-2018 Q4-2018 400,000 deliver 360,000 to 400,000 vehicles in 2019,
245,000 driven by higher sales of the Model 3
Tesla Model 3 Tesla Model X Tesla Model S Other BEVs
Since it started with volume production in 2018, Tesla has been • In addition, Tesla expects to ramp up Model
the largest single contributor to EV growth in the US 3 deliveries and sales in Europe and China
2018 2019e
Note: *: Tesla sold 140,000 Model 3s in 2018. Pre-orders were around 455,000 after cancellations and confirmed by Tesla to be well over 400,000 in 2018. Tesla will have pre-orders for about
300,000 Model 3s globally to fulfill in 2019.
Source: InsideEVs (2019c), Car and Driver (2019), CarSalesBase (2019)
TESLA’S FINANCIAL PERFORMANCE
Due to the success of Model 3, Tesla has seen extraordinary growth, and the BEV maker
even managed to turn a profit in Q3 and Q4 of 2018, on-par with other car manufacturers
Tesla’s revenues have been increasing exponentially… … and in Q3 and Q4 of 2018, Tesla also managed to turn a profit
Tesla's revenues, in billion USD, 2008-2018 Operating margins of carmakers, in %, 2017-2018
15
22 21.46
Year of
20 Tesla’s 10%
18 IPO
5%
16
14 +107% 0%
11.76 17.63
12
-5%
10
8 7.00 -10%
6 -15%
4.05
4 3.20
2.01 1.56 -20%
2 1.39
0.01 0.11 0.12 0.20 0.41 Q1-2017 Q2-2017 Q3-2017 Q4-2017 Q1-2018 Q2-2018 Q3-2018 Q4-2018
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Tesla BMW Daimler Jaguar (Tata) Toyota GM
Total revenue Automotive Energy Services Leasing
The success of Model 3 carried over to Tesla’s financial
In 2018, more than 82% of Tesla’s revenues came from its performance in Q3 and Q4 of 2018, changing its operating margin
automotive segment (not including leasing) from being negative to on-par with other carmakers
Source: Tesla Inc. (2016, 2017, 2018, 2019a, 2019b), Thomson Reuters Eikon (2019), Statista (2019e)

TESLA’S STRENGTHS AND CAPABILITIES
Tesla’s success is based on its strong brand and consumer satisfaction as well as its
ability to produce technologically dominant cars that beat every other BEV on the market
Selling more BEVs does not just fill demand for Tesla… Tesla’s vehicles are technically dominant in the BEV segment…
All-electric range in miles for BEVs in the US, 2018-2019
Tesla Model S 100D 335
Tesla Model 3 LR* 310
#1 in customer satisfaction 4 in 5 Tesla customers buy or lease
of all car brands, according to another Tesla when they return to Tesla Model X 100D 295
Consumer Reports market, according to Experian Hyundai Kona Electric 258
… it creates demand, reflected in Tesla’s ad spending per car Chevrolet Bolt 238
Advertising spending per vehicle sold in the US, in USD, 2017 Nissan LEAF 150 Tesla’s range and price
Tesla 0 125 per mile dominance is
Without spending any money on ads, Tesla Volkswagen e-Golf
Fiat 40 due to its superior
received more than 325,000 reservations in less Hyundai IONIQ Electric 124 battery technology
Porsche 161 than a week after the announcement of Model 3
… And the Tesla’s Model 3 LR* is competitive on price as well
Honda 260
BEVs price per mile of range in USD, 2018-2019
Dodge 267
1,207 Chevrolet Bolt 158
Jaguar
Volkswagen 1,221 Tesla Model 3 LR* 162
Genesis 1,590 Nissan LEAF 204

Lincoln 2,511 Hyundai IONIQ Electric 245
Alfa Romeo 8,577 Volkswagen e-Golf 251
Note: *: Tesla Model 3 Long Range
Source: Bartlett (2019, Consumer Reports), InsideEVs (2019a), Smith (2018, Experian), Statista (2019b)

TESLA’S FUTURE AND CHALLENGES
In 2019, Tesla will unveil its pickup truck and begin production of the Model 3 in China,
but is still experiencing financial troubles, while competition is coming in fast
In 2019, Tesla will unveil its pickup truck and the Model Y… However, Tesla is still burning cash and piling up debt…
Cars models that have already been announced by Tesla Free cash flow and long-term debt, in million USD, 2014-2018
9,418 9,404
? ? 10,000
5,000 1,877 2,068
5,978
Tesla Pickup Truck Tesla Model Y Tesla Roadster 0

-1,048 -240
• An all-electric • An all-electric SUV, • A new version of -2,198 -1,540
-5,000 -4,257
pickup truck cheaper than Model x Tesla’s first-ever
• Will be unveiled • Will be unveiled in the electric sports car 2014 2015 2016 2017 2018
during 2019 first half of 2019 • Will launch in 2020
Free Cash Flow* Long-term debt
… as well as begin production in China by the end of the year … and new competitors are entering Tesla’s segments fast
New BEVs being launched in 2019 Luxury Mass market
+100% • Chinese Gigafactory will enable Tesla to
1,000,000 bypass tariffs and will qualify Tesla’s cars for
a $10,000 subsidy from the government
500,000
• Tesla plans to be able to begin production of
the Model 3 in China by the end of 2019 ** **
Planned Future global
• The factory will eventually produce 500,000
output in manufacturing
cars a year, doubling Tesla's projected output
the US capacity Q1-2019 Q2-2019 Q3-2019 Q4-2019
Note: *: Free cash flow figures are accounting numbers; **: BMW and Nissan are not launching new EVs, but the i3 and LEAF models are getting significant enough updates to be mentioned here
Source: Lambert, F. (2018d, Electrek), Tesla Inc. (2016, 2017, 2018, 2019), Zhang, Y. and Hull, D. (2019, Bloomberg), Companies annual report

II STRATEGIC FIT
1 2 3

THE STRATEGIC FIT BETWEEN GM AND TESLA
The strategic fit between GM and Tesla is especially promising when it comes to
leveraging GM’s production expertise in helping Tesla scale
Research and development Production and sales Products and brands
Self-driving tech for AVs Production capacity and expertise Product portfolio
• GM Cruise’s self-driving tech is • GM is closing down “one-shift sedan • GM has announced next-gen
industry leading, whereas Tesla’s plants”, which Tesla could take over, electric vehicle platform, which
Autopilot is more uncertain and GM could also offer expertise
? will underly 20 all-electric models
• The technologies are also different, • Tesla is ramping up production and • However, Tesla has announced an
and Tesla’s cars cannot use GM’s is aiming to double capacity in ? all-electric pickup truck, which
tech due to a lack of Lidar* China in the coming years GM’s platform does not support
GM’s tech could potentially be used in GM can support Tesla in scaling Tesla’s coming pickup truck has a lot of
future Tesla cars, but not right now production and building more factories potential among GM’s core customers
Batteries for EVs Sales networks Brand portfolio

• GM has plenty of experience and • GM’s has extensive sales networks • None of GM’s brands are as
initiatives within battery making in both the US and China strong as Tesla’s brand is,
especially within the EV segment
• However, Tesla’s battery tech is • However, instead of dealerships,
industry leading and could be Tesla uses direct sales, • However, GM already has plans to
used in GM’s cars as well showrooms and service centers make Cadillac its lead EV brand
Tesla’s battery advantage could be shared Tesla’s approach to selling is so different Tesla’s brand is still stronger and could be
with GM and increased through scale from GM’s that the potential is limited used to increase the sales of GM’s EVs
Note: *: Lidar is a surveying method that is used in control and navigation for some autonomous cars, including those of GM Cruise Deep dive on Strategic fit No strategic fit
Source: Team analysis, Goldman (2018, CNN Business), Welch (2018b, Bloomberg), Wayland (2018, Automotive News) following slide

PRODUCTION CAPACITY AND EXPERTISE
The most promising area for a fit addresses the current supply/demand gap by leveraging
GM’s mass production and delivery expertise, financial resources and empty factories
Tesla has a track record of not being able to meet the demand…
Expertise
Tesla Model 3 US deposits, in % of Apr 18, April 2017 – April 2018
• Tesla and GM could combine innovation with Units sold in
This development will continue, as China is allowed to pre-order mass, as Tesla could eventually lack the 2018
8.380.000
Hold reservation Refunded Purchased
100%
expertise to scale their production
80%
• GM is currently producing >30x Tesla’s 245.322
units, so they have the expertise Tesla GM
60%
40%
Financial resources
20%
• Tesla needs high levels of CAPEX, e.g. in CAPEX/Sales
0%
Apr- Jan- Apr- order to meet Model Y production targets 32%
17 18 18 • However, last year, their CAPEX/sales ratio 11%
… and has been going through “logistics hell” declined dramatically
• Tesla needs a capital injection 2017 2018
Empty factories
• Tesla’s main California factory is
a former Toyota-GM combined
assembly line
• Tesla could utilize the factories
GM will close in 2019, as it grows
Source: Barnard (2018, CleanTechnica), Gessner (2018, Second Measure), Seeking Alpha (2018b), Musk, E. (2018, Twitter)

III FINANCIAL ANALYSIS
1 2 3
COMPARABLES DISCOUNTED CASH FLOW SYNERGIES
Trading and Business case Assessment of

transaction multiples forecasting and DCF potential synergies
1 2 3

METHODOLOGY OF FINANCIAL ANALYSIS
To assess the financial attractiveness of Tesla, we derive its fair value based on multiple
and DCF analyses, estimate synergies and compare them to the purchasing price
GM’s shareholder value Tesla’s shareholder value
Standalone enterprise
value derivation
Comparable analysis Purchasing price

Discounted cash flow
Trading Transaction
multiples multiples
Current market valuation Premium
+
Synergies
Source: Own analysis and illustration

POTENTIAL PEER GROUP
We identified traditional automakers, pure EV producers, renewable energy firms and AV
tech companies as potential peer groups for Tesla for comparable analysis
Traditional automotive manufacturing Prospective pure EV manufacturing
Logic: Tesla competes in automotive sales with traditional Logic: Similar business model in 2025,
OEMs, from which the following have the biggest EV presence but different revenue growth
No publicly
available data
Renewable energies Tech-companies involved in autonomous driving

Logic: Following the acquisition of Tesla of Solarcity, that is Logic: Tesla’s “Autopilot” could be be a major revenue driver in
active in the production of solar energy and solar cells the future
Source: Thomson Reuters Eikon (2019), General Motors (2019b), NVIDIA (2019), Stockreports+ (2019), Brinkman (2019, Thomson Reuters), Jonas (2019, Thomson Reuters), Houchois (2019,
Thomson Reuters)
SELECTION OF PEER GROUP
Based on an analysis that assesses the CAGR, brand relevance, as well as revenue and
cost drivers, pure EV producers are the only peer group that can be retained
Industry wide analysis
Market size CAGR* Brand
(‘18) (‘18-’25) relevance Biggest revenue drivers Biggest cost driver Retained
• EV vehicle sales • Batteries for production
• Batteries • Direct labour
Tesla - 15% • Services • R&D -
• Charging stations • Other
• Other
Automotive
USD 3.4tn 3% • Services • R&D
manufacturing
• Other
Prospective pure • Batteries • Direct labour
EV manufacturing USD 0.2tn 22% • Services • R&D
• Other
Renewable
energies
• Other
Autonomous • Batteries • Direct labour
driving
• Other Yes No
Note: *: CAGR of market size
Source: Xerfi (2018), Grand View Research (2018), Businesswise (2019), Euromonitor (2016), BCG (2018a), UCSUSA (2017), NVIDIA (2019), Allied Market Research (2017)

FINANCIAL ANALYSIS OF PEERS
We identified five prospective pure EV manufacturing peers which are projected to be at
least 60% electric by 2025 and show similar margins as Tesla
2017: China announces
EV EV
ban for fossil fuel vehicles share share EBITDA margin EBIT margin Net income margin
by 2040 Short description and rationale 2018* 2025e* 2019e 2019e 2019e
• Automotive and energy company

based in Palo Alto 100% 100% 11% 2% 1%
• Specialized in EV manufacturing
Median: 13% Median: 5% Median: 3%
• One of the top 4 automakers in the
country 6%
100% 5% 5% 4%
• 34 new energy models by 2025
• BYD Auto is an OEMs which is the

2nd largest global plug-in car 100% 100% 12% 5% 3%
Prospective manufacturer
pure EV
manufacturing • Holding automotive company 5%
• Company with highest EV market 100% 17% 14% 3%
share in China (7%)
• Automotive company, owner of Volvo 6%

since 2010 (100% electric by 2019) 60% 16% 15% 12%
• Manufacturer of electric cars,

specialized in the production and 100% 100% 13% 3% 1%
sale of SUVs
Note: *: EV share representing the share of sales in the respective years that relates to electric vehicles
Source: Hevi (2017), BYD (2018, pp. 1-2), Volvo (2018), Geely (2018)

TRADING MULTIPLES
Based on financial peer group multiples, Tesla appears to be highly overvalued; however,
innovation multiples are more in line with market expectations
Financial multiples Innovation multiples
Overvalued Good proxy for value based on innovation efforts
EV*/Patents in EV*/Engineering
EV*/Sales 2019e** EV*/EBITDA 2019e** EV*/EBIT 2019e** electric vehicles FTEs focused on EV
2,3 20,5 112,6 232,4 9,2
Median: 1.3x Median: 10.8x Median: 23.2x Median: 215.3x Median: 14.0x
0,4x 14,1x 30,8x 722,4x 5,7x
Prospective
pure EV 1,3x 10,7x 23,2x 41,3x 14,0x
manufacturing
0,5x 2,7x 3,4x 215,3x 60,0x
1,7x 10,8x 12,0x 1.889,0x 30,7x
2,1x 16,3x 76,6x 20,7x 1,0x
Note: *: EV aligned with the whole financial analysis as of 22nd of February, 2019; **: Applied multiples based on forecasts due to the growth profile of Tesla
Source: Bloomberg (2019), Thomson Reuters Eikon (2019), Justia (2019), BAIC (2018)

VALIDATION OF TRADING MULTIPLES
Nevertheless, this peer group should have a lower weight in the final valuation than the
DCF, as Tesla’s growth profile is very differentiated
EV / Sales 2019e vs. Sales CAGR 2017a-2019e Key observations
2,8
EV / Sales 2019e based on regression = 2.7x • Peers have significantly
2,6 different growth profiles
2,4 compared to Tesla
Based on market = 2.3x
2,2
• Based on the sales CAGR
2,0
of its peers, Tesla would
1,8
have a valuation 11%
EV / Sales 2019e
1,6 higher than what the

1,4 market currently
1,2 expects based on the
1,0 y = 3.6583x + 0.5866 regression analysis
0,8 R² = 0.5828 • There are big gaps
0,6 between the profiles of the
0,4 different peers in the
0,2 sample
0,0
-2 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 Multiples-based valuation
Sales CAGR 2017a-2019e should have a smaller
weight than the DCF in
Same analysis based on EBITDA financials not applicable because of decreasing profitability of some of its peers assessing Tesla’s value
Source: Bloomberg (2019), Thomson Reuters (2019)

TRANSACTION MULTIPLES
Through selected transaction multiples in the four industries, we estimate an EV / Sales
multiple for Tesla of 1.2x, but we decrease its weight as an estimate for Tesla’s valuation
Transaction multiples Conclusion
EV/Sales • The transaction multiples of the

Automotive automotive, renewables and AS
4,5 acquires
EV industries are not good proxies to
4,0 Renewables estimate the value of Tesla if
AS acquired by GM
3,5
• As underlined before, the
acquires
3,0 acquires targets in these industries differ
Deal size
substantially, especially in size
2,5
• The premium of each of the
acquires
2,0 acquires acquires acquires deals varies widely to the
1,5
synergies that GM and Tesla
Median could have
1,0 EV/Sales: 1.2 • Therefore, we will only compute the
0,5 acquires acquires median of the EV peers, but with a
lower weight as the DCF
0,0 Date
01/01/07 01/01/08 01/01/09 01/01/16 01/01/17 01/01/18 01/01/19
The EV / EBITDA multiple is only available in 3/10 deals

due to lack of data availability and negative profitability of the targets
Note: When not available in USD, the Sales and EV were converted to USD using the annual average exchange rate. *Sales multiple for Argo AI is a Bloomberg estimate.
Source: MergerMarkets (2019), Thomson One (2019), Bloomberg (2019)

1 2 3

BUSINESS PLAN FORECASTING
We expect Tesla’s production capacity to increase by 508% between 2018 and 2030e,
while its margins will increase to industry levels
Tesla’s production capacity is expected to increase by 508%... …, revenues to grow accordingly and margins to improve
Vehicle production* of Tesla, in thousand cars, 2016-2030e Revenue and margins of Tesla, in USDbn, 2016-2030e
+508%
Especially CAGR 2018 – 2030e
CAGR 2018 – 2030e
high capex in 1,491 100 Sales: 11.9% 10
Model S/X: -0.7% 1,412
1,333 82.8
2017 to ramp Model 3: 16.4% 1,244 80 72.4 76.4 79.6 5
1,155 68.5
up production Other: n/a
997
1,076
61.6 65.1
898 60 56.6 0%
749 48.3
+200% 625 41.6
490 40 34.2 -5
28.7
380 21.5
245 20 11.8 -10
51 82 7.0
0 -15
2016 2017 2018 2019e 2020e 2021e 2022e 2023e 2024e 2025e 2026e 2027e 2028e 2029e 2030e 2016 2017 2018 2019e2020e2021e2022e2023e2024e2025e2026e2027e2028e2029e2030e
Model S, X Model 3 Other

“In total, we are expecting to Sales Operating margin
• Previously poised by production deliver 360,000 to 400,000 • Revenues grow alongside the increase in production capacity,
issues, Tesla managed to ramp vehicles in 2019.” despite somewhat decreasing prices due to lower production
up capacity in 2018 Tesla, 2019 costs and increasing competition
• Given the vast amount of pre- “This year [2019] we will start • Tesla works towards a gross margin target of 25% which
orders for the Model 3 and the tooling for Model Y to seems to be feasible given the recent developments, increasing
growing market demand, achieve economies of scale and productivity benefits
vehicles sold is constrained by volume production by the • The operating margin is expected to increase up to 10%
production capacity end of 2020.” which is in line with high-end car manufacturer peers
Tesla, 2019
Note: *: Potential adaptions to the Model S/X or 3 would still be considered under the respective category
Source: Own analysis based on financial statements from Thomson Reuters, Quotes from Tesla Form 8-K filed on January 30, 2019; Tesla Inc. (2019)

SCENARIO ANALYSIS
We forecast Tesla’s cumulative free cash flow to differ from USD 24bn to 82bn in a
scenario analysis primarily based on vehicle production and prices as well as margins
Scenario analysis of free cash flow to equity projection Pessimistic case
Free cash flow to equity of Tesla, in million USD, 2016-2030e Production capacity Vehicle prices Margins
12,389
11,816
Cumulative FCF 2019e-2030e +16.1% p.a. -1.9% p.a. 9% target
10,647
9,625 Revival of production Drop faster due to Under pressure due to
$24bn $51bn $82bn 8,806 issues that prevent higher than expected missing productivity
8,440
7,874 8,062 capacity expansion competition and scale gains
7,349 7,135
6,356
5,752 Realistic case
5,287 5,076
4,666 4,796 5,025
4,137 Production capacity Vehicle prices Margins
3,484 4,065
3,001 3,056 +16.2% p.a. -1.2% p.a. 10% target
2,247 2,220 2,600
2,268
1,632 Capacity expansion is Drop in line with Become sustainable
968
379 674 506 in line with expectations expectations and in line with car
industry
-295
-760 -738
-1,161 -179
-700 Free cash flows expected to Optimistic case
-2,730 break even in 2020 in the
realistic and optimistic case, and Production capacity Vehicle prices Margins
in 2022 in the pessimistic case +16.3% p.a. -0.9% p.a. 11% target
-5,266
2016 2017 2018 2019e 2020e 2021e 2022e 2023e 2024e 2025e 2026e 2027e 2028e 2029e 2030e Capacity expansion is Drop less due to lower Develop more favorably
faster than expected than expected and reach an above-
Actuals Pessimistic case Realistic case Optimistic case
competition industry level
Source: Own analysis based on financial statements from Thomson Reuters

DCF ENTERPRISE VALUE DERIVATION
Discounting the cash flows of the realistic scenario, Tesla’s fair EV is USD 55.8bn which
translates into an equity value of USD 42.3bn that is 17% below Tesla’s market cap
Realistic free cash flow to equity projection Enterprise to Equity Value bridge
Free cash flow to equity of Tesla, in million USD, 2016-2030e In USDm
8,440
8,062 55,819
Cumulative FCF 3,878
2019e-2030e 7,135 16,002
6,356 42,305
5,752
1,390
$51bn 5,076
4,666
Compared to Tesla’s market cap*,
our analysis suggests that the
3,001
market overvalues Tesla by 17%
2,220
674 Enterprise Cash and ST Total debt Minority Equity value

379
value investments interest
-295
-700
Key valuation parameters
Tesla will generate positive cash flows Balance sheet date 12/31/2018
-2,730
starting from 2020 onwards which is driven Valuation date 02/22/2019
by positive sales and margin developments
WACC 10.3%
-5,266
Terminal growth rate 2%
2016 2017 2018 2019e 2020e 2021e2022e 2023e 2024e 2025e2026e2027e2028e 2029e 2030e
Actuals Realistic case

Terminal value EBIT margin 10%
Note: *: Based on market cap on 02/22/2019

FAIR ENTERPRISE VALUE
Based on the multiple and DCF valuation, the fair EV of Tesla is USD 55bn that translates
into an equity value of USD 41.5bn which is 18% below the current market valuation
Football field Weight* Implied multiples from valuation
Tesla’s Enterprise Value, in billion USD, as of February 22, 2019 EV / Sales 2019e EV / EBITDA 2019e
Estimated EV range:
Low High Low High
$49.6bn – $60.5bn
EV / Sales Current EV based on
EV / Sales 31.5 43.0 market cap: $64.6bn 5% 1.1x 1.5x 10.0x 13.6x
2019e
EV / EBITDA
EV / EBITDA 30.9 37.2 5% 1.1x 1.3x 9.8x 11.8x
2019e
Trading
multiples
EV / Patents**
EV / Patents 56.5 63.2 5% 2.0x 2.2x 17.9x 20.0x
EV / Engineers***
EV / Engineers 91.0 105.0 5% 3.2x 3.7x 28.8x 33.3x
Transaction EV / Sales
EV / Sales 28.7 40.2 5% 1.0x 1.4x 9.1x 12.7x
multiples 2019e
Average EV:
DCF 10.4% 50.2 61.4 USD 55bn 75%
WACC: WACC: 10.4% 1.8x 2.1x 15.9x 19.5x
Note: *: Weight assigned in calculation of final EV range; **: Number of patents related to EVs; **”: Number of engineering FTEs dedicated to EVs
Source: Team analysis 0based 10 20 statements
on financial 30 40 50 60Reuters
from Thomson 70 80 90 100 110

1 2 3

OVERVIEW SYNERGIES
Reducing management headcount, using Tesla’s battery technology and scaling up to
decrease supply/demand gap are the most tangible synergies that can be quantified
Quanti-
Synergies based on GM and Tesla merger fication Rationale
• Real estate costs through shared headquarters • Strategic relevance for Tesla
Administration
• Analyze management headcount and reduce organizational chart • Relevant - To be explored further
• Profit from Cruise technology in Tesla’s cars • Inherently different technologies

R&D • Use of Tesla’s battery technology in GM’s EV models (Chevrolet Bolt, Cadillac, etc.) • Relevant – To be explored further
• Shared information technology • Long-term, hard to quantify
Production & • Scale-up Tesla’s production to fully satisfy current demand and maximize • Relevant - To be explored further
Assembly capacity profiting from GM financial backing and expertise
• Start of Tesla products being sold through traditional distribution channels, with • A USP of Tesla is their fully owned
Distribution higher negotiation power from GMs experience for scale-up distribution network with specialists
not commissioned based on sales
for objectivity purposes
• Similar maintenance procedures • Only overlap in EV maintenance
Post-sale
• Reduce customer service teams • Specialized Tesla’s customer service
would be difficult to replicate
Few potential Tesla and GM synergies based on their respective strategic profiles are quantizable
Deep-dive in and detailed quantification in next slides

Source: Own analysis

ADMINISTRATIVE AND PRODUCTION SYNERGIES
Reducing administrative headcount and managing Tesla’s supply and demand gap could
yield up to USD 4.5bn in synergies after a GM-Tesla merger
Savings in executive and top management compensation Management of Tesla’s demand and supply gap
In million USD 784 898 997
728 749 Model S, X
676 625
583 628 196 Supply 490 Model 3
542 135 182 380
4901 58 94
27 Other
250
540 546 588 Y1 Y2 Y3 Y4 Y5 Y6
515 525 533
240 235
240
170 176
Y0 Y1 Y2 Y3 Y4 Y5 Y6 Gap
67
Expected synergies GM’s executive and top management compensation 3
Teslas’ executive and top management compensation Combined executive compensation after merger
Y1 Y2 Y3 Y4 Y5 Y6
Main assumptions and valuation*,** Main assumptions and valuation**

• A certain share of general, administrative and management functions will • Currently, the gap of Tesla is rooted in the penetration of key markets
overlap between both organizations and bear potential for elimination
• GM would be able to reduce Tesla’s mismatch between demand and
• Some compensation, such as the Elon Musk salary, cannot be addressed in supply by 20% in Y1, vs. 70% in year 6
this exercise based on feasibility constraints
• The gap will be smaller as Tesla becomes more mature, and so will the
• This overlap will be restructured from 10% in Y1, up to 50% in Y6 synergies between both entities
NPV = $2.2bn NPV = $1.7bn NPV = $2.5bn NPV = $2.9bn

Note: *: Estimated based on executive’s compensation schemes from the annual report and press research; **: Discounted at a WACC of conglomerate which equals 7.1% (see excel model)
Source: Thomson Reuters (2019), Tesla (2018), General Motors (2018a), New York Times (2018)

TECHNOLOGICAL SYNERGIES
Applying Tesla’s battery technology, which has been proven to be the most advanced in
the market, to all GMs EVs could yield synergies of USD 2.7bn following the merger
Comparing the price of Tesla’s batteries vs. GMs… Main assumptions and valuation*
In USD per kWh Price of Tesla’s battery ($/kw)
145
Price of GM’s battery ($/kw)
116 116 • Tesla’s batteries are the most advanced large-scale lithium batteries in the
104 market at the moment, following a cooperation with Panasonic
96 99 91 94 87 89 82 85 78 80 74 76 • GM’s battery prices, while less efficient than Tesla YTD, are expected to go
under USD 100/kWh in 2021, following efforts of the company to develop
an all-new platform
• The difference in performance will be much smaller in the future, but
applicable to more car units. Nevertheless, we expect Tesla to be able to
Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8
retain its competitive advantage in the years to come
… and estimating to which models it would apply • At the same time, GM is planning a full scale of its BEV production:
In thousand car units 927 • Cadillac will release its first EV model in 2021
Chevrolet EVs • GM plans to bring to the market 20 new electric vehicles by 2023, and
Cadillac EVs produce around 1m units by 2026
620
Other GM brands’ EVs
• Its 2019 Volt, the PHEV option, has been discontinued
384
253
141
30 39 71 NPV = $2.7bn
Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8
Note: *: Discounted at a WACC of conglomerate which equals 7.1% (see excel model)
Source: Own analysis, InsideEVs (2019b)

EV – PURCHASING PRICE COMPARISON
GM would lose around USD 26.2bn on the acquisition after accounting for a premium
over Tesla‘s current market capitalization that is required to convince shareholders to sell
The price to be paid for Tesla is significantly higher than its added value for GM
1
In billion USD Comparable premium paid on past
Estimated value of Tesla Estimated purchasing price of Tesla M&A transactions
Ø 37.5%
Synergies Market cap
Equity value 45.6%
Average premium*
DCF 7.4 paid on US
29.4%
Industrials M&A
transactions in 2016
and 2017 was
50.9 2016 2017 37.5%
41.5
1 2
Comparable
premium Elon Musk premium
• Elon Musk holds 20% of Tesla and is
Estimated loss on an 2 its biggest shareholder
investment in Tesla equals 19.1 • Tesla shareholders are often
Elon Musk
USD 26.2bn premium attached to Musk’s vision
5.1 • Might require an additional
premium of 10%
Note: *: Premium calculated to four week stock price
Source: Hershorn (2018, Thomson Reuters)

IV FEASIBILITY
Beyond the value of

Tesla
ACQUISITION/CASH DEAL
Acquiring Tesla by means of cash is not a viable option because either there would be no
synergies, or GM would overstep its financial capacity
Acquiring a minority stake lacks benefits GM’s financing capacity does not allow to acquire a majority stake of Tesla
Net debt / EBITDA ratio; Below mix of financial sources for payment
GM + Tesla via GM + Tesla via
GM standalone
equity raise debt raise
5.9x
5.0x
3.9x
• A minority stake could allow to Cash 18.0 Cash 18.0
pressure for a seat on the board of Equity 20.0 Equity 0.0
Debt 0.0 Debt 20.0
directors, access to insider
information, and the like
• Yet, Elon Musk has a lot of decision
• GM is already highly • Requires one of the • Requires one of the
power and would most likely not
levered largest equity issuances largest debt issuances
approve GM to exercise power
• In order to control Tesla, ever* ever*
• Therefore, none of estimated
GM needs to acquire 51% • Shareholders would be • GM might loose its
synergies would materialize
of Tesla’s equity, i.e. a massively diluted investment grade credit
purchasing price of • Leverage increases to an rating
$38.3bn (incl. premium) unsustainable level • Leverage increases to an
• GM has USD 26.8bn cash dangerous level
No synergies to be realized, as of YE2018
therefore, unviable option for GM
Note: *: Overview about the biggest deals can be found in the appendix
Source: Ouimet (2012), Bloomberg (2019)

MERGER/EQUITY DEAL
A merger would result in an ownership structure with Elon Musk as the major shareholder,
which may not be desirable for GM
Tesla’s ownership structure Evolution of GM’s ownership structure
In % of its market capitalization as of February 22, 2019 In % of its market capitalization as of February 22, 2019
Before merger After merger
USD 75.1bn Elon Musk would
7% become the major
19% 11% shareholder of GM!
7% 4%
3%
USD 50.9bn 8% 7% 3%
5% 3%
5% 5% 3%
19%
8% 2% 3%
5% Elon Musk 67%
5% 73%
Baillie Gifford & Co.
63% T. Rowe Price Associates
63% Fidelity Mngmt & Research Elon Musk The Vanguard Group, Inc. Fidelity Mngmt & Research
Others* Baillie Gifford & Co. Brock Capital Group Berkshire Hathaway Inc.
Capital World Investors T. Rowe Price Associates Others*
Current After offer price Concerns
• Elon Musk has been Tesla’s CEO since 2008, and emotionally
very involved in his company
Assumptions • Musk lacks professionality, e.g. he was punished by the SEC
Tesla market capitalizaton USD 50.9bn (as of 02/22/2019) because of a tweet about his desire to make Tesla private (fine
GM market capitalization USD 56.3bn (as of 02/22/2019) of $20m for both Tesla and Musk)
• Can GM allow itself to have a person with such an
Acquisition premium 47.5%** unpredictable behavior as major shareholder?
Note: *: Parties holding less than 5% of outstanding shares; **: Average premium to 4 week stock price for M&A transactions in the US Industrials sector between 2016 and 2017
Source: Thomson One (2019), Nasdaq (2019), Hershorn (2018, Thomson Reuters)

OTHER DIMENSIONS
The acquisition is threatened as well in other dimensions, especially regarding the post-
merger integration and the measures set by Tesla to avoid unwanted M&A operations
Areas of concern following GM’s Threat assessment Overall
Description acquisition of Tesla Descriptive assessment Threat level threat
• Willingness to prevent M&A • Already concentrated market • HHI* lower than 1,500 Low
operations that lead to a • Strong increase of the market • Increase of HHI* of less than 200 points Low
Antitrust
monopoly or drastically reduce concentration
regulation
competition (Sherman Act & • Resulting monopoly in the EV • Rising players in the EV segment, but Medium
Clayton Act) segment strong leadership of Tesla
• Merging different organizations • Difficulty to engage the teams of • Tesla & GM’s values differ which may High
(culture, values) can cause the acquired company hinder employee’s engagement
Post-merger uncertainty among workers, • Difficulty to align management • Elon Musk acting as a charismatic and High
integration
leading to lower productivity and teams’ interests strongly independent leader: may be
failure of the acquisition reluctant to follow GM’s objectives
• Defense strategies set up by • Voting structure preventing • Supermajority voting structure (two High
Preventive Tesla’s management in advance acquisitions thirds of the shares required for any
measures set to deter unwanted acquisitions major change, e.g. acquisitions)
by Tesla • Resistance of shareholders • Elon Musk owns c. 19% of Tesla and High
considered getting the company private
• Tendency of markets to value a • Strong diversification • Acquisition within the auto industry Low
diversified group at less than the • Limited strategic rationale for the • Limited synergies (cf. financial analysis) Low
Conglomerate sum of its part – as issues arising acquisition
discount from an M&A operation can offset • Different management styles • Tesla puts emphasis on a very flat Medium
the benefits of controlling several management style, which may be hard
companies to achieve in a bigger structure
Note: *: The Herfindahl-Hirschman Index is a measure commonly used in economics to assess the concentration of a market Low High
Source: Xerfi (2018), DOJ (2019), FTC (2019), Korus (2016, Ark Invest), Boudette (2018, New York Times), Thomson One (2019) threat threat

General Motors should not acquire Tesla
An acquisition of, or merger with, Tesla would Several challenges fundamentally question
destroy around USD 26.2bn of value the feasibility of such a transaction
• Our multiples and DCF valuations suggest • Using cash to acquire a minority stake of
that Tesla’s equity is currently 18% Tesla would lack synergies, and a majority
overvalued stake would overstep GM’s financial
capacity
• Tesla’s shareholders likely require a
premium of 47.5% on top of the current • Merging with Tesla would result in an
market cap in order to sell their shares ownership structure where Elon Musk is the
major shareholder of the conglomerate
• This purchasing price does not justify USD
7.4bn in estimated synergies • Additionally, there is a risk of post-merger
integration and preventive measures put in
place by Tesla

V ALTERNATIVE SOLUTION
The road ahead

ALTERNATIVE INVESTMENT OPPORTUNITIES
There are multiple alternative investment opportunities that GM could exploit, but the
most attractive one is to expand its product portfolio by EV truck
R&D opportunity Product opportunity Market opportunity
Invest in new battery technology Expand EV product portfolio Go solo in China with EV venture
• The battery is the most expensive • Demand continues to grow for • In 2018, the Chinese government
part of EVs, and many new battery pickup trucks, and a market for scrapped the 50% ownership cap
technologies show potential electric versions is emerging for EV producers*
• This represents an opportunity to • This represents an opportunity to • This represents an opportunity for
acquire a battery maker or invest acquire a carmaker of electric GM to establish a local EV
in a new battery technology trucks or develop them inhouse venture independently
GM’s current efforts within batteries GM’s current efforts within EV trucks GM’s current efforts in China
• In 2018, GM expanded its battery • GM has not announced any plans $1,981M • In 2018, GM earned USD 1,981m
lab in Michigan to accelerate efforts to launch an electric pickup truck in equity income from its highly
successful JVs in China
• GM also teamed up with Honda to • GM’s next-gen EV platform is not
build next-gen batteries for EVs designed to support a truck • GM’s success in China is partly
due to its partnership with SAIC,
• GM is developing faster-charging • GM’s brand portfolio could need which is regarded as one of the
batteries with Delta Electronics too a modernization or new addition 2018 strongest partners in the region
Since GM is already doing well, GM Considering GM’s core customers, GM Given GM’s successful JVs with its
should focus its efforts on other options should acquire or develop an EV truck partners, GM should not go solo
Note: *: In 2020, the same limits will be removed for automakers of commercial vehicles, and in 2020, for passenger vehicles as well
Deep dive on
Source: Team analysis, Edelstein, S. (2018, The Drive), Lambert (2018e, Electrek), Zhang, Y. and Hull, D. (2019, Bloomberg) following slide

WAYS TO EXPLOIT PRODUCT OPPORTUNITY
GM could either develop an EV truck by itself, acquire an EV truck producer, or design a
truck in a partnership, but acquiring an existing EV truck maker holds the most promise
Develop Acquire Cooperate
Develop the EV pickup truck alone Buy a company that produces one Establish a joint venture or an alliance
• Would allow GM to develop an EV • Will allow GM to rapidly bring • Would allow GM to design the EV
pickup truck from the ground up electric powertrain technology powertrain technology for trucks
and be in full control of the design into its top-selling truck line and cheaper and with less risk
potentially a hyped brand as well
• However, it would take time to • However, it would involve
develop the EV powertrain, and • However, it might be expensive, sacrificing control over a key
in the meantime GM’s competitors and difficulties with integration part of the EV truck and sharing
might launch EV trucks could limit the potential upside the gains with a partner as well
Feasibility of developing alone Feasibility of acquiring a producer Feasibility of cooperating with partner
• GM is already the largest pickup • GM ended 2018 with ~USD • GM has plenty of experience in
truck maker and also has plenty 23.5bn in cash and has more establishing JVs, also within
of experience producing EVs experience than most in buying and research and development
integrating companies and brands
• However, GM would risk losing • However, GM would risk that its
the opportunity for a “first mover • However, GM risks overpaying for partner breaks up the agreement
advantage” in making EV trucks technology that is not good enough to exploit the tech by itself
GM is greatly positioned to build an EV Acquiring an EV pickup truck maker is Developing an EV truck in a partnership
pickup truck, but it would take too long very attractive, if a target can be found is too risky and limits the upside
Deep dive on
Source: Team analysis, General Motors (2019b) following slide

POTENTIAL ACQUISITION TARGETS
Multiple companies are currently trying to bring EV trucks to market, but only Rivian is far
enough in the development process and attractive enough to consider for an acquisition
Company EV Truck model Specifications Launch date and price Operations and finance Verdict
• 0-60 MPH in 5 seconds • Production of the XT • Does not plan to make
• 120 mph top speed might begin in 2020 more than 100 units at
• 500 miles of range • No price has been the beginning
• 5,000 lbs payload announced • Funding still not fully
The XT Pickup • 17,000 lbs tow capacity secured to launch
• 0-60 MPH in 4.5 seconds • Production of the B2 • Only renderings of the

• 100 mph top speed might begin in 2020 B2 exist right now
• 200 miles of range • The B1 is supposed to • Is still looking for
• 5,000 lbs payload start around USD 60,000 partners to get its first
B2 Pickup Truck • 7,500 tow capacity vehicle into production
• 0-60 MPH in 3 seconds • Production of the R1T • In January 2019, Rivian

• 125mph top speed will begin in 2020, secured USD 700m of
• 400 miles of range together with Rivian’s funding by Amazon
• 1,763 lbs payload R1S SUV model • It already has a
Rivian R1T • 11,000 lbs tow capacity • R1T will start at $69,000 functional factory
• 0-60 MPH in 5.5 seconds • Production of the W-15 • In January 2019,

• 80 miles of electric range will start in 2019 Workhorse secured
• Gasoline range extender • The W-15 has a planned USD 35m in financing
• 2,200 lbs payload starting price of $52,000 from Marathon Asset
The W-15* • 5,500 lbs tow capacity Management
Deep dive on
Note: *: The W-15 is not an actual pure BEV, but a plug-in range extended electric pickup (PHEV) Very attractive Not attractive
following slide
Source: Atlis Motor Vehicles (2019), Bollinger Motors (2019), Lambert, F. (2018f, 2018g, Electrek), O’Kane, S. (2018, Verge), Randall C. (2019, Electrive.com), Rivian (2019), WorkHorse (2019)

ATTRACTIVENESS OF RIVIAN AS TARGET
Rivian’s products are a perfect fit with GM’s customers, and its skateboard platform can
be used for future GM vehicles as well, while its brand is already hyped by customers
Rivian’s products would be a perfect fit with GM’s customers… Rivian’s brand is very hyped among consumers and investors…
“I am stunned by the “If Rivian can deliver on “Tesla’s domination of

Rivian R1T Rivian’s skateboard platform Rivian R1S specs here. We are its promise… then the the electric vehicle market
• All-electric • Is built from a clean sheet • All-electric talking about a best-case EV market will surely is unsustainable and
5-passenger • Can be modified and used 7-passenger scenario for an all- gain itself a whole will soon be disrupted
pickup truck for future GM vehicles too SUV electric pickup truck” new sector” by start-up Rivian”
- Fred Lambert - Wired’s best EVs from - Adam Jonas
Because of the shared electric powertrain, the R1T and R1S have 91%
Editor in Chief, Electrek the LA Motor Show Morgan Stanley Analyst
shared components – future GM vehicles could have the same
… and Rivian is already very far in the development process … and Rivian’s technologies are also quite attractive for GM
10 years of experience Already owns a fully Both vehicles will go Battery packs Self-driving tech Connected car
in building cars functional factory on sale in 2020 • Battery sizes all the • Hardware suite enables • Cloud-based
• Founded in 2009 by • Bought auto plant in • Rivian aims to sell a way up to 180 kWh “Level 3”* and includes platform that learns
M.I.T. engineer 2017, previously owned total of 20,000 • Have the highest Lidar, making it driver’s preferences
• Has been working by Mitsubishi Motors vehicles in 2021 capacity of any compatible with GM and adapts to his or
on EVs since 2011 • Employs 700 people and 40,000 in 2022 other passenger EV Cruise’s technologies her driving habits
Note: *: Level 3 ("eyes off") automation: The driver can safely turn their attention away from the driving tasks, e.g. the driver can text or watch a movie
Source: Charlton, A. (2018, Wired), Lambert, F. (2018h, Electrek), Loveday, S. (2018, InsideEVs), Rivian (2019), Seppala, J. (2018, Engadget) Sheetz (2019, CNBC), Tannert, C. (2019, Forbes)

VALUATION AND FEASIBILITY OF ACQUIRING RIVIAN
To acquire Rivian, GM must account for the varied profiles of the investors, especially
since Rivian’s valuation is very uncertain and ranged between USD 1.2bn and 4bn
Rivian has gone through two major financing rounds… … And the acquisition has to account for different shareholders
Debt Official shareholders based on currently publicly available data
Equity 700
500
200
0 1 300
Dec-11 Aug-12 May-18 Feb-19
• Rivian has gone through two major financing rounds in the last • According to the current situation…
12 months to be able to expand capacity by buying a factory and • Rivian does not require additional liquidity to de-risk its
employing more talent goal of producing an all-electric pickup by 2020
… But this has not made its valuation any clearer… • Shareholders are committed to seeing the company
succeed and would not part with their shares lightly
1.2-4
• But…
Remaining
• Rivian will still need an automaker’s expertise to fully scale
1,2 Invested capital its production in the next years, as Amazon is looking at
2019 EV Valuation Rivian as a partner to develop its delivery vehicles
• While past investments provide an idea of the value of Rivian, the • GM has the financial capabilities to go through the
share acquired by Amazon in its February 2019 investment acquisition, even with at a substantial premium, which is
round has not been officially disclosed justified based on its strategic relevance
Source: Pyper (2019, GTM), Prenzler (2018, AdaptBN)

POST-ACQUISITION STRATEGY
Rivian’s brand should be positioned as a premium brand, while its underlying architecture
should be used to develop cheaper electric trucks under the Chevrolet and GMC brands
Rivian’s brand should be positioned as a premium brand… Rivian’s powertrain technology should be used extensively…
The world’s first Electric Adventure Vehicles

The Chevrolet Rivian’s platform The GMC Sierra pickup
Silverado pickup truck • Will serve as GM’s truck
• Starting price: $28,285 next-generation • Starting price: $29,000
• The Silverado is battery-electric • The GMC Sierra is
labeled as the more architecture for known for being a bit
The R1T pickup truck and the R1S SUV should be
affordable truck EV pickup trucks more luxurious truck
branded as premium vehicles
• The starting price should be kept around USD 70,000 The GMC Sierra and the Chevrolet Silverado already share the same
• The brand should be used only for premium EVs underlying platform, as well as conventional internal combustion powertrains
• Focus should be on delivering the highest quality
… and be promoted as part of GM’s portfolio of core brands … in order for GM to maximize the value of the Rivian acquisition
No development cost Economies of scale Choice for the consumer

• Will eliminate cost of • Will decrease vehicle • “The GMC is a GMC”
Rivian’s developing powertrain production cost • “The Chevy is a Chevy”
logo
Source: Eisenstein (2019, CNBC), General Motors (2018b), Smith, A. (2019, PonyParts)

VI CONCLUSION
Sometimes it is simply
not meant to be
THE CONCLUSION
GM should not acquire Tesla, but instead acquire Rivian, an EV truck manufacturer
whose products and brand will have strategic value for GM in the future EV landscape
Should General Motors acquire Tesla?

• Despite having the second largest share of EVs sold in the US in 2018, GM is still highly dependent on
How is GM’s and pickup trucks and SUVs that are causing very high emissions
Tesla’s strategic fit?
• GM could use Tesla’s brand and products, while Tesla could leverage GM’s expertise in scaling
• Tesla’s fair valuation is estimated at an EV and Equity Value of USD 55bn and 41.5bn, respectively
How much is Tesla
• GM would lose around USD 26.2bn on the acquisition after accounting for synergies and a reasonable
worth?
premium over Tesla‘s current market capitalization that is required to convince shareholders to sell
• Acquiring Tesla by means of cash is not viable due to either the lack of synergies or financial capacity
How feasible is an
• A merger would result in an ownership structure where Elon Musk is the major shareholder
acquisition?
• There are concerns about the post-merger integration and Tesla’s preventive M&A measures
GM should not buy Tesla
• Acquiring an existing EV pickup truck maker is the most promising solution for GM
What should GM • Rivian is the most attractive target due to its product portfolio and brand
do instead? • The Rivian brand should then be kept as a premium brand, while its underlying powertrain technology
should be used to develop cheaper electric pickup trucks under the Chevrolet and GMC brands

– APPENDIX
More insights
(yes, more)
Table of contents
I. Referenced deep dives p. 67

1. Strategic fit
2. Financial analysis
3. Feasibility
4. Alternative solution
II. Additional insights p. 76
1. Market analysis
2. Strategic fit
Appendix | 65
Table of contents

1. Strategic fit
3. Feasibility
1. Market analysis
2. Strategic fit
Appendix | 66
FINANCIAL ANALYSIS – TRADING MULTIPLES
Based on 5 key differences between Tesla and traditional OEMs, we reach the conclusion
that this peer group should not be retained as a peer
Return 5 key differences between
Stock prices of traditional automotive manufacturers peer group 13a-18a Tesla and traditional OEMs
• The growth profile of Tesla is
1200
vastly different, with part of the
demand for their cars still unmet
1000
• Tesla just became EBITDA
743%
positive in 2018, vs. the rest of
800 the industry that shows rather
stable profitability
600 • The scale of traditional OEMs
-27% dwarfs Tesla’s current production
400
• Tesla constantly remodels its
-11% assembly line, vs. other
200 automakers that keep it the same
-16% for years
0 • Fast vehicle updates are
feb maj aug nov feb maj aug nov feb maj aug nov feb maj aug nov feb maj aug nov feb maj aug nov
13 13 13 13 14 14 14 14 15 15 15 15 16 16 16 16 17 17 17 17 18 18 18 18 39% common in Tesla, realizing fixes
via overnight software download
Tesla Inc Ford Motor Co General Motors Co
Bayerische Motoren Werke AG Volkswagen AG Nissan Motor Co Ltd
or make physical changes fast
-32%
S&P 500 INDEX/d
Based on this evidence, traditional automakers are not retained as a peer
Source: Bloomberg (2019)
Appendix | 67
FINANCIAL ANALYSIS – TRANSACTION MULTIPLES
Through selected transaction multiples in the four industries, we estimate an EV / Sales
multiple for Tesla of 1.2x
M&A transactions
# Date Target company Description Buyer Deal value EV/ EV/
($m) Sales EBITDA
Negative
1 Jan-08 Jaguar Land Rover Automotive manufacturer Tata Motors 2,300 0.3
EBITDA
2 Jan-09 Chrysler Automotive manufacturer Fiat 10,400 0.6 3.2
National Electric GaoXin BoHua

3 Mai-15 Company engaged in the manufacturing of electric automobiles 930 1.1 n.a.
Vehicle Sweden Investment Co
Agile Electric Sub Igarashi Electric
4 Jul-15 Indian eletric motor manufacturer 118 1.2 n.a.
Assembly Works
Mitusbishi Motors
5 Oct-16 Automotive manufacturer Nissan Motor Co 2,486 1.4 6.0
Corporation
Negative
6 Jan-17 SolarCity Manufactures and installs residential and commercial solar panels Tesla 2,600 4.2
EBITDA
Negative
7 Jan-17 SPower Private owner of operating solar assets AES/AIMCO 853 1.9
EBITDA
8 Feb-17 Argo AI Start-up developing softwares for self-driving technology Ford 1,000 1.2* n.a.
Energy company that designs and manufactures crystalline silicon Negative

9 Oct-18 SunPower Total 1,300 0.7
photovoltaic cells and solar panels EBITDA
Max 4.2
Average 1.4
Median 1.2
Min 0.3
Note: When not available in USD, the Sales and EV were converted to USD using the annual average exchange rate. *Bloomberg estimate
Source: MergerMarkets (2019), Thomson One (2019), Bloomberg (2019)
Appendix | 68
FINANCIAL ANALYSIS – DCF VALUATION
In the realistic scenario of our DCF analysis, we value Tesla at an EV of USD 55.8bn
which translates into an equity value of USD 42.3bn
Actuals Realistic case Norm.
FYE 31/12 - USDm 2014a 2015a 2016a 2017a 2018a 2019e 2020e 2021e 2022e 2023e 2024e 2025e 2026e 2027e 2028e 2029e 2030e TV Year
Sales 3’198 4’046 7’000 11’759 21’461 28’680 34’199 41’587 48’275 56’643 61’618 65’093 68’492 72’416 76’360 79’630 82’827 84’484
growth% 58.8% 26.5% 73.0% 68.0% 82.5% 33.6% 19.2% 21.6% 16.1% 17.3% 8.8% 5.6% 5.2% 5.7% 5.4% 4.3% 4.0% 2.0%
EBITDA 45 -294 280 4 1513 3155 4104 5406 7241 9063 9859 9764 10274 10862 11454 11945 12424 12588
% margin 1.4% -7.3% 4.0% 0.0% 7.0% 11.0% 12.0% 13.0% 15.0% 16.0% 16.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 14.9%
EBIT -187 -717 -667 -1632 -388 574 1368 2495 3862 5664 6162 6509 6849 7242 7636 7963 8283 8448
% margin -5.8% -17.7% -9.5% -13.9% -1.8% 2.0% 4.0% 6.0% 8.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0%
Tax rate 27.9% 27.9% 27.9% 27.9% 27.9% 27.9% 27.9% 27.9% 27.9% 27.9% 27.9% 27.9% 27.9% 27.9% 27.9% 27.9% 27.9% 27.9%
(-) Tax on EBIT 52 200 186 455 108 (160) (381) (695) (1’076) (1’579) (1’717) (1’814) (1’909) (2’018) (2’128) (2’220) (2’309) (2’355)
NOPAT -135 -517 -481 -1177 -280 414 987 1800 2786 4086 4444 4695 4940 5223 5508 5743 5974 6094
(+) D&A 232 423 947 1636 1901 2581 2736 2911 3379 3399 3697 3255 3425 3621 3818 3982 4141 4140
% Capex 23.4% 25.3% 66.9% 39.0% 81.3% 90.0% 84.2% 77.8% 82.4% 75.0% 80.0% 71.4% 76.9% 83.3% 90.9% 100.0% 100.0% 98.0%
(+) Stock-based compensation 156 198 334 467 749 1147 1368 1663 1931 2266 2465 2604 2740 2897 3054 3185 3313 3379
% sales 4.9% 4.9% 4.8% 4.0% 3.5% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 2.0%
(-) Capex (990) (1’674) (1’416) (4’196) (2’337) (2’868) (3’249) (3’743) (4’103) (4’531) (4’621) (4’556) (4’452) (4’345) (4’200) (3’982) (4’141) (4’224)
% sales 31.0% 41.4% 20.2% 35.7% 10.9% 10.0% 9.5% 9.0% 8.5% 8.0% 7.5% 7.0% 6.5% 6.0% 5.5% 5.0% 5.0% 5.0%
(-) Change in trade working capital (442) (345) (2’113) (1’995) (327) (1’974) (1’463) (1’958) (1’773) (2’217) (1’318) (921) (901) (1’040) (1’045) (867) (847) 864
% sales 13.8% 8.5% 30.2% 17.0% 1.5% 6.9% 4.3% 4.7% 3.7% 3.9% 2.1% 1.4% 1.3% 1.4% 1.4% 1.1% 1.0% 1.0%
Unlevered free cash flow -1178 -1915 -2730 -5266 -295 -700 379 674 2220 3001 4666 5076 5752 6356 7135 8062 8440 10253
Present value of free cash flows 30% 16’634

Present value of terminal value 70% 38’398 Enterprise Value (€$bn)
Key valuation parameters
Enterprise value 31.12.2018 55’032 WACC WACC
Future value factor 1.01
55.8 9.27% 9.77% 10.27% 10.77% 11.27%
Balance sheet date 12/31/2018
Enterprise value 22.02.2018 55’819
1.0% 61.2 56.0 51.4 47.4 43.8 Valuation date 02/22/2019
growth rate
Perpetual
EV - EquityV bridge 1.5% 64.1 58.4 53.5 49.2 45.3
+ Cash and ST Investments 3’878 2.0% 67.4 61.2 55.8 51.1 47.0 WACC 10.3%
- Total Debt (16’002) 2.5% 71.2 64.3 58.4 53.4 48.9
- Minority Interest (1’390) 3.0% 75.6 67.9 61.4 55.8 51.0 Perpetual growth rate 2%
Total EV-EqV adjustments (13’514)
Equity value 42’304.9 Perpetual EBIT margin 10%

Appendix | 69
FINANCIAL ANALYSIS – DCF VALUATION
The equity betas for Tesla and General Motors were derived based on CAPM regressions
Tesla CAPM regressions
Return frequency Weekly
S&P 500 Nasdaq

Sample period (31/12/2018 - x years) Beta t statistics R-squared Beta t statistics R-squared
1 year 1.3263965 3.2003615 0.1700186 1.1333018 3.7209910 0.2168628
2 years 1.3470997 4.0339210 0.1375850 1.1567973 4.6897035 0.1773750
3 years 1.5920039 5.9509014 0.1869628 1.3926345 7.0206576 0.2424601
4 years 1.5066548 6.8463311 0.1853594 1.3577518 8.0359592 0.2386630
5 years 1.5416553 7.4947275 0.1787910 1.4330957 9.0284881 0.2400893
Average beta 1.4627620 1.2947162
Average beta S&P500 and Nasdaq 1.3787391
General Motors CAPM regressions

Return frequency Weekly
S&P 500 Nasdaq

Sample period (31/12/2018 - x years) Beta t statistics R-squared Beta t statistics R-squared
1 year 1.0076880 3.6675755 0.2119917 0.7081105 3.3454446 0.1828997
2 years 1.1156166 5.3102361 0.2165815 0.7716598 4.7503322 0.1811547
3 years 1.1839723 7.5532588 0.2703210 0.8400113 6.7938874 0.2306036
4 years 1.2286241 9.4530649 0.3025471 0.8775339 8.1694879 0.2447034
5 years 1.2354371 10.9813061 0.3185223 0.8820318 9.3305158 0.2523007
Average beta 1.1542676 0.8158695
Average beta S&P500 and Nasdaq 0.9850686
Appendix | 70
FEASIBILITY – PREMIUM
The acquisition premium for M&A deals in the US Industrials sector is estimated at a
value of 37.5%
Premium estimates Conclusion
2016 2017
Ø 37.5% • We use the 37.5% average
premium to 4 week stock price as
45.6%
an estimate for the acquisition
24.8% 24.0% 29.4%
premium for M&A deals in the US
Industrials sector
Average one-week Average premium to
Median premium
deal premium 4 week stock price • The other two metrics are left behind
for the following reason:
Year 2017 2019 2017 • the BCG estimate is a
worldwide estimate, not
specific to the automotive
Location industry
• the FactSet estimate, though
Industry Global Global Industrials specific to the US, is computed
on an industry scope that is too
broad
BCG 2018 M&A FactSet Flashwire Thomson Reuters
Source
Market Report Monthly 2017 M&A Review
World USA
Source: BCG (2019), Hershorn (2018, Thomson Reuters), FactSet (2019)
Appendix | 71
FEASIBILITY – ACQUISITION/CASH DEAL
Overview about the largest equity and debt issuances of all time
Largest corporate bond deals ever (USDbn) Largest IPOs ever (USDbn) Largest SEOs ever (USDbn)
Royal Bank of
Verizon, 2013 49 Alibaba, 2014 22 24
Scotland, 2008
Actavis, 2015 21 Visa, 2008 18 HSBC, 2009 19
AT&T, 2015 18 ENEL spA, 1999 17 Fortis, 2007 19
Apple, 2013 17 Facebook, 2012 16 UBS, 2008 15

General Motors,
Medtronic, 2014 17 16 Rio Tinto, 2009 15
2010
Deutsche Telekom, Imperial Tobacco,
AbbVie, 2015 17 13 10
1996 2008
Credit Agricole,
Roche, 2009 17 AT&T, 2000 11 9
2008
France Telecom, Banco Santander,
16 Kraft Foods, 2001 9 9
2001 2008
France Telecom, Société Générale,
Visa, 2015 16 7 8
1997 2008
Charter Comms., Telstra Corporation, Anheuser-Busch
16 6 8
2015 1997 Inbev, 2008
Ø 20 Ø 13 Ø 14
Source: Backman (2016, Atlas), Renaissance Capital (2019), Statista (2019c)
Appendix | 72
FEASIBILITY – OTHER DIMENSIONS – ANTITRUST REGULATION
The US automotive industry is considered an unconcentrated market by the US antitrust
regulators: an acquisition is quite unlikely to fall under scrutiny
Concentration analysis Conclusion
Herfindahl-Hirschman index for selected US markets

• The automotive
Level of industry has a
concentration Herfindahl-Hirschman
Index below 1500,
7,000 which means that the
High
industry is
considered by the
antitrust regulators
as an
1,120 1,200 Moderate unconcentrated
900 market
Unconcentrated
US automotive Airlines Smartphone OS Smartphone vendors • Therefore, the

industry likelihood that a
Three major US Antitrust laws are preventing the development of monopolies merger in this
• Sherman Act: prohibits new business combinations and stock purchase that result in the creation of a monopoly
• Clayton Act: illegal for one company to purchase the stock of another company if their combination results in reduced industry would fall
competition within the industry under the DOJ or the
• Hart-Scott-Rodino Antitrust Improvements Act: requires that acquisitions involving companies of a certain size cannot be FTC scrutiny is quite
completed until certain information is supplied to the federal government and a specified waiting period has elapsed
low
Note: The Herfindahl-Hirschman index for selected industries is based on market shares of 2018 (for the automotive industry) and of 2016 (all other industries)
Source: Xerfi (2018), DOJ (2019), FTC (2019), Korus (2016, Ark Invest)
Appendix | 73
ALTERNATIVE SOLUTION – R&D OPPORTUNITY
Batteries are a crucial part and key challenge for EVs, but thanks to early efforts in solid-
state batteries and successful partnerships GM is already very well positioned
New battery technology is needed GM is a leading player and early mover in battery technology…
Patent filings related to solid-state EV batteries
Lithium-ion Solid-state
batteries batteries
233 GM invested $3.2m in Sakti3 already
79 in 2010 as one of the first movers
56
• Hit limit of storage • Cheaper and safer 53
29 28 26 25
capacity and charging • Capable of travelling 23 15
speed 500 miles on a single
Toyota Semi- Integrated Sakti3 Hyundai Bosch Nissan Radlok Quantum- Murata
• Not capable of travelling charge and allow faster conductor Power Scape
500 miles on a single charging Solutions
charge … and is maintaining very successful partnerships
Battery production is very competitive Battery technology Charging systems

• Batteries are increasingly becoming the leading Cost per kWh Miles per
minute of
power source for mobility -31.0% • GM develops, LG charge18
• Development of
• Battery manufacturers are expanding production 145
Chem produces and solid-state fast
capacity significantly to capture market share and Honda sources the 12 charging system
economies of scale 100 batteries • GM expects to
• However, BCG expects that battery cell production • Higher storage 6 have vehicle fleet
will exceed demand by 40% in 2021, which will lead capacity and faster ready with it by
to tremendous price pressure charging 2023
2018 2021e
Source: Welch (2018a, Bloomberg), Lienert, P. and White, J. (2018, Thomson Reuters), Greenwood (2018, Engineering.com), Stringer, D. and Buckland, K. (2019, Bloomberg), Motavalli (2010,
New York Times), Lambert (2018c, Electrek), BCG (2018c)
Appendix | 74
Table of contents

1. Strategic fit
3. Feasibility
1. Market analysis
2. Strategic fit
Appendix | 75
MARKET ANALYSIS
Globally, as well as in the US, the plug-in sales mix has been pushed towards BEVs
Globally, the plug-in sales mix has been pushed towards BEVs In the US, the mix has been pushed towards BEVs as well
Plug-in sales mix globally, 2012 – 2018 Plug-in sales mix in the US, 2016 – 2018
100% 100%
90% 90%
27% 28%
80% 36% 38% 80%
45% 41%
47% 46% 47% 46% 46%
55% 52%
70% 70%
60% 60% In all of 2018, BEVs

represented 66% of total
plug-in sales, which to
50% 50%
a large degree is due
to the high level of
40% 40% Tesla’s Model 3 sales 73% 72%
30% 64% 62% 30%
55% 59%
53% 54% 53% 54% 54%
45% 48%
20% 20%
10% 10%
0% 0%
2012 2013 2014 2015 2016 2017 2018 2016 2017 Q1-2018 Q2-2018 Q3-2018 Q4-2018
Plug-In Hybrids Battery Electric Vehicles Plug-In Hybrids Battery Electric Vehicles
Source: Irle, R. (2018, EVVolumes)
Appendix | 76
MARKET ANALYSIS
Americans bought over 17 million vehicles in 2018, 68 percent of which were pickup
trucks and SUVs, continuing a years-long trend away from cars
The best-selling cars in the US are mostly pickup trucks and SUVs
Top 10 best-selling cars in # of vehicles sold in the US, 2018
Ford F-series 909,330
Chevrolet Silverado 585,581
Dodge Ram 536,980
Toyota Rav4 427,170
Nissan Rogue/Rogue Sport 412,110
Honda CR-V 397,013
Toyota Camry 343,439
Chevrolet Equinox 332,618
Honda Civic 325,760
Toyota Corolla 303,732
Pickup trucks SUVs Sedans
Source: Capparella, J. (2019, Car and Driver), Focus2Move (2019), Gastelu, G. (2019, Fox News)
Appendix | 77
MARKET ANALYSIS
China is in a leading position in the field of e-mobility

China is in a leading position in the field of e-mobility
Leading countries, Roland Berger’s E-mobility Index 2018
China 0.9 5.0 5.0 10.9
The U.S. 1.8 4.6 4.5 10.9
Japan 1.8 4.3 4.2 10.3
Germany 2.2 3.0 5.0 10.2
South Korea 2.1 3.8 3.1 9.0
France 2.9 1.5 5.0 9.4
Technology Industry Market
Source: Roland Berger’s E-mobility Index 2018
Appendix | 78
MARKET ANALYSIS
An overview of car markets and the EV segment in various regions from 2012 – 2017
Global car registration and sales by region
EUROPE – EV segment CHINA – EV segment
USA – EV segment • Market share: 1% • Market share: 2%
• Market share: 1% • CAGR12-17: +59% • CAGR12-17: +126%
• CAGR12-17: +30% 300
Thousands
800
Thousands
200 600
300 +50%
Thousands
100 400 +117%

200 +72%
+48% 200
0 +236%
100 0
+19% 201220132014201520162017
0 201220132014201520162017
201220132014201520162017
29.1m
17.6m 20.9m
+3.5% +2.3% +8.6%
OTHER AMERICAS – EV segment

• Market share: less than 1% 8.2m
REST OF WORLD – EV segment
• CAGR12-17: +51% -1.6% • Market share: less than 1%
20
• CAGR12-17: +32%
Thousands
15 20.9m 150
10 +66% LEGEND
+0.5%
Thousands
5 100
+41% 2017 +26%
0 BEV
Sales 50
2012 2013 2014 2015 2016 2017
Source: OICA (2019), IEA (2019) CAGR12-17 +41%
PHEV 0
201220132014201520162017
Appendix | 79
MARKET ANALYSIS
Car manufacturers need to find new sources of profits as their core business is doomed
to sluggish revenue growth and more heated competition coming from consolidation
The growth sales of passenger cars and …while the industry consolidates, … which has put profits on a
commercial vehicles is sluggish… leading to more heated competition… downward trend since 2013
Global car & vehicles registration and sales Global automotive M&A deal volume and Operating margin of 2016 top 10
(2012-2017) [Mio. Units and %] value (2012-2017) players (2012-2016)1)
Volume [Mio. Units]
YoY growth [%] Deal volume [units] 6,8%
5% Disclosed deal value ($bn) 6,1%
140
591 583 598 5,1% 5,2% 4,9%
120 543
490 4,5%
100 465
3% 3%
80
60 2%
62
40 53
20 39 41
30
22
0
2013 2015 2017
2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017
Source: OICA (2019), Xerfi (2017, pp. 16-46), Thomson One (2019)
Appendix | 80
MARKET ANALYSIS
The automotive industry is currently converging to a software-driven industry where the
value chain is expanded to incorporate digital services, and hardware/software providers
From supply and manufacture of cars … … to mobility as a software-driven service
Traditional automotive industry New ecosystem
2015 share of profits: 68% 2015 share of profits: 32%

2030 share of profits: 49% 2030 share of profits: 51%
Vehicle sales Aftermarket Financing Hardware & software Shared mobility
• Representation of “Freedom” • Representation of “Efficiency”

• Strategy focused on individuals’ parts quality, safety, performance • Strategy focused on data gathering, integration of multiple
and mass production technologies, connectivity and the larger mobility network
• R&D focused on performance-oriented features, such as • R&D focused on content requirements, emissions reduction and
horsepower and gadgetry safety
• Sold mostly for retail customers • Sold to fleets that provide mobility as a service
Source: Xerfi (2017), PwC (2017a)
Appendix | 81
MARKET ANALYSIS
Becoming a key player in the BEV market will become a necessity for automakers in 10
years, based on increasing regulatory pressure and customer preferences
Very attractive prospects for BEVs worldwide Decreasing CO2 emission targets
EU China • Fuel economy

Number of BEVs in use worldwide [in ’000] regulations in major
170 markets
125.000
130
• Financial incentives,
CAGR ’15-’30 such as subsidies, VAT
90 and vehicle registration
Engine Electric 70
tax exemptions
-2.4% 41%
13.000 • City access restrictions
in 20 major cities
2015 2025 worldwide
Resolved customer expectations
• Driving range constantly improving: Several EVs models

have a 250-mile-plus range, with 95% of car journeys are
under 25 miles
1.928 • Costs are coming down: Increase in grants and break-
727 1.186
even point turning lower, as operating an EV currently at a
cost of 2 cents per mile
2015 2016 2017 … 2020 … 2030 • Increased public charging points for EVs: As there are
Source: McKinsey & Company (2018), Deloitte (2018) currently 16,000 charging points and 340 added monthly
Appendix | 82
MARKET ANALYSIS
The ADAS market is exponentially growing giving rise to new players and disrupting
traditional industries such as mobility, logistics, insurance or entertainment
The growing autonomous market is giving birth to new players … and shifting the profit pools towards providers of
that don’t regularly play in the automotive industry… ADAS technology, software and digital services
Top 5 players Scenario for profit shifts in the automotive industry, 2015–2030 [%]3
Fully and semi-autonomous volume of cars [in Mn]
(2018) by market
ADAS1 OEMs2
1%
17,8 2% 1% 5% Digital services New
1 14% 11% Supplier (new technology/software) players
14% 20% Shared mobility

2 12,7
11% 4% Supplier (traditional/hardware))
11% Insurance
3 8,4 16%
10% Financing
10% Aftermarket
4 5,0
3,1 41%
29% Vehicle sales
1,8
5 1,0
0,3 0,5
Non-automakers
2017 2018 2019 2020 2021 2022 2023 2024 2025 2015 2030e
Note: 1. By average number of miles driven in autonomous mode without human intervention in 2018; 2. By revenues; 3. Based on a PwC scenario with a non-consolidated view: supplier value
pools not eliminated from vehicle/ aftermarket revenues to show full industry value pools
Source: Backman (2016, Atlas), PwC (2017a)
Appendix | 83
MARKET ANALYSIS
Because of carsharing and changing customers’ behaviors, the expected increase in
private vehicle-sales will be dampened worldwide
Global carsharing growth worldwide (2006-2014) Annual global vehicle sales (millions of units)*
Users [Mio.] 104.125

Shared vehicles [Mio.] 4.843 23
41 10
43.554 87
31.967 1.788
11.501 19.403 1.164
347 671
115
2006 2008 2010 2012 2014
Willingness to trade in own car and use a robo-taxi in % of
respondents (2018)
100%
19%
47% 39% 46%
70% 56% 58%
64% 2015 Urbanization Fewer New share 2030
44% 50% 45%
41% 35% private and macro- private vehicles private
29% 17%
8% 11% 9% 1% 3% 7% vehicles economic vehicles vehicles
Total 18-29 30-64 65-75 China Germany U.S. growth
CAGR
By age By country
No, I would want to keep my car Yes, I would be willing to pay a premium
3.6 1.9-2.4
Yes, if the cost is lower or equal 2010-2015 2015-2030
*in high disruption scenarios, McKinsey Shared Mobility Report
Source: Goodall, W., Dovey Fishman, T., Bornstein, J. and Bonthron, B. (2017, Deloitte Review), Grosse-Ophoff, A., Hausler, S., Heineke, K., and Möller, T. (2017, McKinsey)
Appendix | 84
MARKET ANALYSIS
Individuals are likely to switch from manufacturers or pay a premium to have the right
applications and media on the car – which gives rise to new business models
Preferences of individuals regarding connectivity services [% of New business models arising by providers and customer segments
respondents answering “yes”] Customer segments
I would switch to another I would be willing to pay for Providers Drivers/ Governments/ Dealers/
manufacturer if it was the only connected services in my car in a
of… passengers municipalities aftersales
one offering a car with full access subscription based model
to applications, data and media Consolidated
Cars Connected navigation (real-time traffic, Diagnostic
37% 32% weather, road conditions) vehicle data-
and
based road
ordering
maintenance
Remote preventing diagnostics and (remote
(deicing, snow
+52% maintenance based on car/fleet data clearance)
checkups)
+85% 21%
Content/ For drivers: For passengers: Traffic
20% Services Phone, office, e- Internet, social media,
management and
Data-driven
mail video games connected
V2I
marketplace
communication
Content feed by linear providers (cable for
(usage-based
networks) and dynamic streaming services tolling, adaptive repair/mainte
(Spotify, Netflix) nance
traffic control)
Enhancement of
Mobility Personalized
Taxi/e-hailing/ride- public transport
2014 2015 2014 2015 dynamic car
sharing with car sharing
pooling
fleet
Both willingness to switch manufacturer and to pay a Infra. SIM cards and LTE sites along highways Networked
subscription fee for connected car services has increased to enable broadband traffic parking
significantly year after year Personalized insurance policies based Further extensions
McKinsey Connectivity and Autonomous Driving Consumer Survey 2014 and 2015 Insurance
on driving behavior/pattern analysis possible
McKinsey (2018)
Appendix | 85
MARKET ANALYSIS
All major OEMs are already making big bets in carsharing, AV and EV technology, and car
connectivity, to stay relevant when this future arrives
Initiatives taken by the 2018 Top 5 car manufacturers, for EVs, AVs, car sharing and connectivity
Electric
vehicles Announced investment of
JV with JAC to mass-market Collaboration with Mazda on 12 new BEVs announced to Hyundai’s Kona EV to be on
$11bn in EVs by 2022
electric cars in China (2016) electric vehicles (2017) be available by 2022 (2018) sale in the US early 2019
(2019)
Autonomous
vehicles Collaboration with Ford to Autonomous prototype ProPilot driver assist system Hyundai and Aurora will Acquisition of Argo AI to add
develop autonomous based on a Lexus model available on Nissan Leaf and develop level 4 autonomous to Ford’s self-driving
vehicles (2019) (2019) Infiniti Q50 sedan (2017) vehicles by 2021 (2018) technology (2017)
Carsharing
“We Share” offering in Yuko car-sharing services in Tested carsharing system Ford Credit Link: group-
Carsharing service launched
selected major cities (service Europe, to be launched in with 100 fully electric Ioniqs lease of Ford vehicles
by Renault (Moov’in Paris)
to begin in 2019) 2019 in Amsterdam (2017) (2016)
Connectivity
Integration of Siri in the car Addition of Android Auto and Microsoft teams up with Hyundai Tucson integrating Partnership with Vodafone
connectivity VW Car-Net Apple CarPlay to Toyota’s Renault-Nissan on in-car connectivity features (Apple on 4G LTE connectivity with
mobile app trucks and SUVs (2019) productivity and connectivity CarPlay, Android Auto) the FordPass Connect
modem (2017)
Source: Xerfi (2017)
Appendix | 86
STRATEGIC FIT – TESLA
Tesla trumps Audi and Jaguar EVs in independent efficiency test

Audi and Jaguar consume a quarter more energy than Tesla Tesla also takes the lead with regards to range
Consumption KWH/100 KM at average speed of 120 KM/H Range in KM at average speed of 120 KM/H
Technology
Tesla Model X 90D 24.8 Tesla Model X 90D 339.0
+23% -19%
Audi E-Tron 30.5 Audi E-Tron 274.0
+3% -1%
Jaguar I-Pace 31.3 Jaguar I-Pace 272.0
0.00 5.00 10.00 15.00 20.00 25.00 30.00 35.00 0.00 100.00 200.00 300.00 400.00
Source: NextMove (2019)
Appendix | 87
In the end of 2018, Tesla’s market capitalization overtook Daimler as the third most-
valuable automaker, but has now fallen back to a fourth place
Tesla is now the fourth most valuable automaker in the world
Market caps of the world’s most valuable car companies, 2019
Toyota 190,460,000,000
Volkswagen 80,320,000,000
Daimler 57,380,000,000
Tesla Model 3 54,560,000,000
BMW 49,370,000,000
Honda 48,030,000,000
General Motors 47,040,000,000
Nissan Altima 33,770,000,000
Ford 32,140,000,000
Fiat Chrysler 26,460,000,000

Note: Stock values in USD, as of Jan. 6
Source: Bloomberg (2019)
Appendix | 88
In the second half of 2018, Tesla became a “real car company” by breaking into America’s
top ten in terms of sedan sales
In the second half of 2018, Tesla broke into America’s top ten…
US sedan sales in number of cars sold in the second half of 2018
Toyota Camry 164,600
Toyota Corolla 153,900
Honda Accord 152,800
Honda Civic 149,500
Tesla Model 3 119,000
Hyundai Elantra 100,700
Nissan Sentra 97,400
Ford Fusion 86,600
Nissan Altima 85,400
Chevrolet Malibu 68,100

Note: Tesla’s Model 3 tally includes some deliveries in Canada
Source: Bloomberg (2019), Tesla (2019a)
Appendix | 89
Tesla has made net losses in every year that it has existed
Tesla has made net losses in every year that it has existed
Tesla’s net loss in million US dollars, FY 2008 to FY 2018
0
-200 -83 -56 -74
-154
-400 -254 -294
-396
-600
-800 -773
-1,000 -889
-1,200 -1,063
-1,400
-1,600
-1,800
-2,000
-2,200
-2,241
-2,400
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Source: Tesla (2011, 2015, 2016, 2017, 2018, 2019a)
Appendix | 90
Tesla’s brand is the 8th most valuable globally in the automotive sector
Tesla is the 8th most valuable brand in the automotive sector
Most valuable global brands for carmakers in billion US dollars, 2018
Toyota #1 29.99
Mercedes-Benz #2 25.68
BMW #3 25.62
Ford #4 12.74
Honda #5 12.70
Nissan #6 11.43
Audi #7 9.63
Tesla #8 9.42 Tesla’s brand increased by

60% in value from 2017 to
Maruti Suzuki #9 6.38 2018 – this makes Tesla #8
on the list for top risers as
well
Volkswagen #10 5.99
Source: Kantar Millward Brown, the 2018 BrandZ™ Top 100 Most Valuable Global Brands ranking and report, Tesla; FY 2010 to FY 2018
Appendix | 91
Tesla’s R&D development expenses have increased steadily

Tesla's research and development expenses has increased…
Tesla’s R&D expenses million US dollars, FY 2010 to FY 2018
1,500 1,460
1,400 1,378
1,300
1,200
1,100
1,000
900 834
800
718
700
600
500 465
400
300 274
209 232
200
93
100
0
2010 2011 2012 2013 2014 2015 2016 2017 2018
Source: Kantar Millward Brown, the 2018 BrandZ™ Top 100 Most Valuable Global Brands ranking and report, Tesla; FY 2010 to FY 2018
Appendix | 92
Tesla is currently addressing the main concerns regarding EVs and has been a key driver
in the rise of acceptance of EVs
Customer concerns regarding BEVs [% of respondents] Tesla has created the following solutions:
1 ▪ The upcoming Tesla Roadster

Tesla’s Next Gen
(2020) is the BEV with the highest
Driving
31% 31% 35% 4% 26% 25% 14% 18% 10% 24% Roadster driving range
range
▪ Range to keep progressing based
on new components in batteries
2 ▪ Premium EV’s model 3 released at

$35,000 (with governmental
Price Tesla’s
28% 32% 22% 19% 24% 9% 14% 31% 22% 26% Tesla’sRoadster
Model 3 subsidies), the cheapest premium
premium
BEV and 50% cheaper than the
second cheapest Tesla model
3 ▪ Tesla’s Supercharger infrastructure

Lack of
grew ten-fold from 119 in 2014 to
charging Tesla’s Supercharger
20% 16% 20% 44% 22% 18% 25% 23% 34% 25% 1,063 station in 2017
infra-
structure
xx Largest concern in each market

Source: Deloitte (2018)
Appendix | 93
– BIBLIOGRAPHY
What inspired us along

the way
Bibliography
Allied Market Research. (2017) Renewable Energy Market by type. Allied Market Research [online]. Available at: Subscription Service (Accessed: 9 February 2019)
Atlis Motor Vehicles. (2019) Company website. Atlis Motor Vehicles [online]. Available at: https://www.atlismotorvehicles.com/ (Accessed: 20 February 2019)
Backman, M. (2016) The 10 largest corporate bond deals of all time. Atlas [online]. Available at: https://www.theatlas.com/charts/NkxGaqJOx (Accessed: 26 February 2019)
BAIC. (2018) Annual report 2017 [online]. Available at: http://www.baicmotor.com/Uploads/file/20180425/20180425182120_51593.pdf (Accessed: 15 February 2019)
Barclays. (2019) Tesla Inc. Debat shifts to Model 3 run rate. Thomson Reuters, Barclays, 31 January [online]. Available at: Subscription Service (Accessed: 18 January 2019)
Barnard, M. (2018) Will Tesla Sales Plummet In 2019 With Loss Of Tax Credit & Backlog Filled? CleanTechnica, 23 December [online]. Available at: https://cleantechnica.com/2018/12/23/will-tesla-
sales-plummet-in-2019-with-loss-of-tax-credit-backlog-filled/ (Accessed: 19 February 2019)
Bartlett, J. (2019) Car Brands Ranked by Owner Satisfaction. Consumer Reports, 5 February [online]. Available at: https://www.consumerreports.org/car-reliability-owner-satisfaction/car-brands-
ranked-by-owner-satisfaction/ (Accessed: 13 February)
BCG. (2018a) Batteries for Electric Cars: Challenges, Opportunities, and the Outlook of 2020. BCG [online]. Available at: https://www.bcg.com/documents/file36615.pdf (Accessed: 20 February
2019)
BCG. (2018b) The Future of Battery Production for Electric Vehicles. BCG, 11 September [online]. Available at: https://www.bcg.com/publications/2018/future-battery-production-electric-
vehicles.aspx (Accessed: 16 February 2019)
BCG. (2019) The 2018 M&A Report. BCG [online]. Available at: http://image-src.bcg.com/Images/BCG-Synergies-Take-Center-Stage-Sep-2018_tcm9-202243.pdf (Accessed: 17 February 2019)
Bloomberg (2017) Electric Vehicle Outlook 2017. Bloomberg [online]. Available at: https://data.bloomberglp.com/bnef/sites/14/2017/07/BNEF_EVO_2017_ExecutiveSummary.pdf (Accessed: 25
February)
Bloomberg (2018) Electric Vehicle Outlook 2018. Bloomberg [online]. Available at: https://bnef.turtl.co/story/evo2018?teaser=true (Accessed: 25 February)
Bloomberg. (2019) Bloomberg Professional [Online]. Available at: Subscription Service
Bollinger Motors. (2019) Company website. Bollinger Motors [online]. Available at: https://www.bollingermotors.com/ (Accessed: 20 February 2019)
Bibliography | 95
Bibliography
Boudette, N. (2018) Tesla Turns Back Rare Challenge From Shareholders. New York Times, 5 June [online]. Available at: https://www.nytimes.com/2018/06/05/business/tesla-once-a-wall-street-
darling-faces-investor-challenge.html (Accessed: 27 February 2019)
Brinkman, R. (2019) Tesla Inc. See Negative Reaction After 4Q Free Cash Flow Impresses But Aspects of 2019 Outlook and CFO Departure Disappoint. Thomson Reuters, J.P. Morgan, 31
January [online]. Available at: Subscription Service (Accessed: 13 February 2019)
Businesswise. (2019) Businesswise [online]. Available at: https://www.businesswise.com/ (Accessed: 19 February 2019)
BYD. (2018) Annual report 2017 [online]. Available at: http://www3.hkexnews.hk/listedco/listconews/sehk/2018/0327/ltn201803271463.pdf (Accessed: 12 February 2019)
CA.GOV. (2019) Autonomous disengagement report. State of California, Department of Motor vehicles [online]. Available at:
https://www.dmv.ca.gov/portal/dmv/detail/vr/autonomous/disengagement_report_2018 (Accessed: 10 February)
Campbell, P. (2018) Should you buy an electric car? Financial Times, 31 August [online]. Available at: https://www.ft.com/content/6940cbaa-a7b7-11e8-8ecf-a7ae1beff35b (Accessed: 10 February
2019)
Capparella, J. (2019) The Best-Selling Cars, Trucks, and SUVs of 2018. Car and Driver, 3 January [online]. Available at: https://www.caranddriver.com/news/g25558401/best-selling-cars-suv-
trucks-2018/ (Accessed: 12 February 2019).
Car and Driver. (2019) The Best-Selling Luxury Cars and SUVs of 2018. Car and Driver [online]. Available at: https://www.caranddriver.com/news/g25741172/best-selling-luxury-cars-suv-2018/
(Accessed: 26 February 2019)
CarSalesBase. (2019) US Car Sales Data. CarSalesBase [online]. Available at: http://carsalesbase.com/us-car-sales-data/ (Accessed: 26 February 2019)
Changan. (2018) Brand new EV model EADO EV460 Launches in Beijing. Changan website, 24 October [online]. Available at: http://www.globalchangan.com/article/news_content_395.html
(Accessed: 26 February)
Charlton, A. (2018) The best electric cars and hybrids from the LA Motor Show. Wired, 1 December [online]. Available at: https://www.wired.co.uk/article/best-electric-cars-at-la-motor-show
CNBC. (2019) GM's Cadillac is said to plan to introduce electric vehicle in fight against Tesla. CNBC website, 10 January [online]. Available at: https://www.cnbc.com/2019/01/11/gms-cadillac-is-
said-to-plan-to-introduce-ev--in-fight-against-tesla.html (Accessed: 10 February 2019)
Bibliography | 96
Bibliography
Cohen, A. (2018) GM Must Adapt Or Die: A Lesson For U.S. Automakers. Forbes, 30 November [online]. Available at: https://www.forbes.com/sites/arielcohen/2018/11/30/gm-must-adapt-or-die-a-
lesson-for-u-s-automakers/#1eb3eb932c2d (Accessed: 25 February 2019)
Cooke, D. (2018) Automakers Rankings 2018. The Environmental Performance of Car Companies. Union of Concerned Scientists [online].
https://www.ucsusa.org/sites/default/files/attach/2018/06/cv-automaker-rankings-2018-report.pdf (Accessed: 10 February 2019)
Cox Automotive. (2017) EV Consumer study. EIA Energy Conference, 27 June [online]. Available at: https://www.eia.gov/conference/2017/pdf/presentations/rebecca_lindland.pdf (Accessed: 16
February 2019)
Customer Guru. (2019) General Motors net promoter score 2019 benchmarks. Customer Guru [online]. Available at: https://customer.guru/net-promoter-score/general-motors (Accessed: 26
February 2019)
Dhawan, R., Hensley, R., Padhi, A. and Tschiesner, A. (2019) Mobility’s second great inflection point. McKinsey Quarterly [online]. Available at: https://www.mckinsey.com/industries/automotive-
and-assembly/our-insights/mobilitys-second-great-inflection-point (Accessed: 28 February 2019)
DOJ. (2019) Department of Justice [online]. Available at: https://www.justice.gov/ (Accessed: 13 February 2019)
Edelstein, S. (2018) GM to Expand Michigan Battery Lab Ahead of Electric Car Push. The Drive, 7 September [online]. Available at: http://thedrive.com/tech/23424/gm-to-expand-michigan-battery-
lab-ahead-of-electric-car-push (Accessed: 13 February 2019)
Eisenstein, P. (2018) Luxury car owners trade up for American pickups as Ford, GM and Ram trucks dominate market. CNBC, 5 November [online]. Available at:
https://www.cnbc.com/2018/11/03/luxury-car-owners-trade-up-for-us-pickups-as-ford-gm-dominate-market.html (Accessed: 22 February 2019)
Eisenstein, P. (2019) General Motors is looking at building an all-electric line of GMC SUVs, Sierra pickup trucks. CNBC, 24 January [online]. Available at:
https://www.cnbc.com/2019/01/23/pickups-ready-to-plug-in.html (Accessed: 26 February 2019)
Euromonitor. (2016) Evolution of Cost Drivers in the Auto Industry. Euromonitor [online]. Available at: https://blog.euromonitor.com/evolution-cost-drivers-auto-industry/ (Accessed: 20 February
2019)
FactSet. (2019) US M&A News and Trends. FactSet Flaswhire US monthly [online]. Available at: https://www.factset.com/hubfs/mergerstat_em/monthly/US-Flashwire-Monthly.pdf (Accessed: 25
February 2019)
Ferris, R. (2018) The steadily disappearing American car. CNBC, 7 April [online]. Available at: https://www.cnbc.com/2018/04/06/the-steadily-disappearing-american-car.html (Accessed: 23
February 2019)
Bibliography | 97
Bibliography
Ferris, R. (2019) GM is going 'all-electric,' but it doesn't expect to make money off battery-powered cars until early next decade. CNBC, 6 February [online]. Available at:
https://www.cnbc.com/2019/02/06/gm-doesnt-expect-to-make-money-off-electric-cars-until-next-decade.html (Accessed: 23 February 2019)
Ferris, R. and LeBeau, P. (2018) Elon Musk could make more than $50 billion from pay plan shareholders approved...but he has a lot to deliver. CNBC, 21 March [online]. Available at:
https://www.cnbc.com/2018/03/21/tesla-shareholders-approve-elon-musks-multibilion-dollar-compensation-plan.html (Accessed: 16 February 2019)
FTC. (2019) Federal Trade Commission [online]. Available at: https://www.ftc.gov/ (Accessed: 13 February 2019)
Gastelu, G. (2019) The 10 best-selling vehicles in the United States in 2018 were mostly trucks and SUVs. FoxNews, 4 January [online]. Available at: https://www.foxnews.com/auto/the-10-best-
selling-vehicles-in-the-united-states-in-2018-were-mostly-trucks-and-suvs (Accessed: 15 February 2019)
Geely. (2018) Annual report 2017 [online]. Available at: http://www.geelyauto.com.hk/core/files/financial/en/2017-02.pdf (Accessed: 14 February 2019)
General Motors. (2016) Annual report 2015 [online]. Available at: http://www.annualreports.com/HostedData/AnnualReportArchive/g/NYSE_GM_2015.pdf (Accessed: 24 February 2019)
General Motors. (2018a) Annual report 2017 [online]. Available at: http://www.annualreports.com/HostedData/AnnualReports/PDF/NYSE_GM_2017.pdf (Accessed: 24 February 2019)
General Motors. (2018b) General Motors Accelerates Transformation. General Motors, 26 November [online]. Available at:
https://media.gm.com/media/us/en/gm/news.detail.html/content/Pages/news/us/en/2018/nov/1126-gm.html (Accessed at: 26 February 2019))
General Motors. (2019a) General motors strengthens core business and future mobility. General Motors [online]. Available at:
https://media.gm.com/content/dam/Media/gmcom/investor/2019/jan/Press-Release-1-11-19.pdf (Accessed: 26 February 2019)
General Motors. (2019b) Annual report 2018 [online]. Available at: https://investor.gm.com/static-files/cbb78eee-fd3b-47bc-93c8-2c73c4800042 (Accessed: 24 February 2019)
General Motors. (2019c) GM’s U.S. Crossover Sales Topped 1 million in 2018. General Motors, 3 January [online]. Available at:
https://media.gm.com/media/us/en/gm/home.detail.html/content/Pages/news/us/en/2019/jan/0103-gmsales.html (Accessed: 1 March 2019)
Gessner, K. (2018) Tesla faces accelerating rate of Model 2 refunds. Second measure, 4 June [online]. Available at: https://secondmeasure.com/datapoints/tesla-faces-accelerating-rate-of-model-3-
refunds/ (Accessed: 14 February 2019)
Gibbs, S. (2018) Tesla finally hits weekly production target for Model 3 cars. Guardian, 2 July [online]. Available at: https://www.theguardian.com/technology/2018/jul/02/tesla-finally-hits-weekly-
production-target-for-model-3-cars (Accessed: 27 February 2019)
Bibliography | 98
Bibliography
GM Authority. (2019a) Chevrolet Bolt EV Sales Numbers. GM Authority [online]. Available at: http://gmauthority.com/blog/gm/chevrolet/chevrolet-bolt-ev/chevrolet-bolt-ev-sales-numbers/
(Accessed; 24 February 2019)
GM Authority. (2019b) Chevrolet Volt Sales Numbers. GM Authority [online]. Available at: http://gmauthority.com/blog/gm/chevrolet/volt/chevrolet-volt-sales-numbers/ (Accessed; 24 February 2019)
Goldman, D. (2018) GM is reinventing itself. It's cutting 15% of its salaried workers and shutting 5 plants in North America. CNN Business, 26 November [online]. Available at:
https://edition.cnn.com/2018/11/26/business/gm-oshawa-plant/index.html (Accessed: 12 February)
Goodall, W., Dovey Fishman, T., Bornstein, J. and Bonthron, B. (2017) The rise of mobility as a service. Deloitte Review [online]. Available at:
https://www2.deloitte.com/content/dam/Deloitte/nl/Documents/consumer-business/deloitte-nl-cb-ths-rise-of-mobility-as-a-service.pdf (Accessed: 10 February 2019)
Grand View Research. (2018) ADAS market report. Market Research Reports [online]. Available at: Subscription Service (Accessed: 10 February 2019)
Greenwood, M. (2018) Honda and GM Partnering on Next Gen Battery. Engineering.com, 27 June [online]. Available at:
https://www.engineering.com/AdvancedManufacturing/ArticleID/17078/Honda-and-GM-Partnering-on-Next-Gen-Battery.aspx (Accessed: 13 February 2019)
Grosse-Ophoff, A., Hausler, S., Heineke, K., and Möller, T. (2017) How shared mobility will change the automotive industry. McKinsey [online]. Available at:
https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/how-shared-mobility-will-change-the-automotive-industry (Accessed: 11 February 2019)
Hancock, T. (2019) Carmakers face cuts and gloom as China sales shift into reverse. Financial Times, 16 January [online]. Available at: https://www.ft.com/content/bcb902e4-1895-11e9-9e64-
d150b3105d21 (Accessed: 10 February)
Harper, G. (2014) The role of business model innovation in transitioning ULEVs to market (Doctoral dissertation, Cardiff University)
Henke, J. (2017) 17th Annual North American Automotive OEM – Tier 1 Supplier Working Relations Index Study. Planning Perspectives Inc., 16 May [online]. Available at:
https://societyofautomotiveanalysts.wildapricot.org/resources/Documents/SAA%20-Presentation-5-16-17_Henke.pdf (Accessed: 9 February 2019)
Hershorn, G. (2018) Merger & Acquisition Review. Full Year 2017. Thomson Reuters [online]. Available at: https://www.thomsonreuters.co.jp/content/dam/openweb/documents/pdf/japan/market-
review/2017/ma-4q-2017-e.pdf (Accessed: 13 February 2019)
Hevi, X. (2017) Inauguration speech. New Energy Vehicle Technology Innovation Centre, Beijing, 4 September [online]. Available at: http://sse.cuhk.edu.cn/en/news/3848 (Accessed: 15 February
2018)
Bibliography | 99
Bibliography
Holland-Letz, D., Kässer, M., Müller, T. and Tschiesner, A. (2018) Profiling tomorrow’s trendsetting car buyers. McKinsey & Company [online]. Available at:
https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/profiling-tomorrows-trendsetting-car-buyers (Accessed: 10 February 2019)
Houchois, P. (2018) Tesla Inc. Playing a positive sum game - Upgrade to Buy from Hold. Thomson Reuters, Jefferies, 7 December [online]. Available at: Subscription Service (Accessed: 10
February 2019)
IEA. (2019) Global EV Outlook 2018. IEA Website [online]. Available at: https://www.iea.org/gevo2018/ (Accessed: 24 February 2019)
InsideEVs. (2019a) Compare Plug-ins. InsideEVs [online]. Available at: https://insideevs.com/compare-plug-ins/ (Accessed: 23 February 2019)
InsideEVs. (2019b) GM’s Electric Future – 300 Miles Of Range, Desirable And Affordable. InsideEVs [online]. Available at: https://insideevs.com/gm-electric-future-300-miles-range-desirable-
affordable/ (Accessed: 11 February 2019)
InsideEVs. (2019c) Monthly plug-in EV sales scorecard: Historical charts. InsideEVs [online]. Available at: https://insideevs.com/monthly-plug-in-ev-sales-scorecard-historical-charts/ (Accessed: 15
February 2019)
InsideEVs. (2019d) China Electric Car Sales Soar To Almost 160,000 In December. InsideEVs, 15 January [online]. Available at: https://insideevs.com/china-electric-car-sales-december/
Irle, R. (2018) Global Plug-in Sales for the 1st Half of 2018. EVVolumes [online]. Available at: http://www.ev-volumes.com/country/total-world-plug-in-vehicle-volumes/ (Accessed: 10 February 2019)
Jonas, A. (2019) Tesla Inc. Can Tesla be self-financing in 2019? Thomson Reuters, Morgan Stanley, 5 February [online]. Available at: Subscription Service (Accessed: 10 February 2019)
Justia. (2019) Justia [online]. Available at: https://patents.justia.com/ (Accessed: 15 February 2019)
Kandi Technologies. (2018) Annual report 2017 [online]. Available at: https://www.sec.gov/Archives/edgar/data/1316517/000106299316008324/form10k.htm (Accessed: 17 February 2019)
Kantar MillwardBrown. (2018) Brandz Top 100 Most Valuable Global Brands 2018. Kantar MillwardBrown [online]. Available at: http://brandz.com/admin/uploads/files/BZ_Global_2018_DL.pdf
Korus, S. (2016) The automotive industry is on the threshold of massive consolidation. Ark Invest, 26 August [online]. Available at: https://ark-invest.com/research/automotive-consolidation
Bibliography | 100
Bibliography
Lambert, F. (2018a) Tesla Model 3 reservations keep growing but 23% were refunded, report says. Electrek, 4 June [online]. Available at: https://electrek.co/2018/06/04/tesla-model-3-reservations-
refunded-report/ (Accessed: 19 February 2019)
Lambert, F. (2018b) Tesla’s Gigafactory 1 battery cells have a 20% cost advantage over LG, new report says. Electrek, 20 November [online]. Available at: https://electrek.co/2018/11/20/tesla-
gigafactory-battery-cells-made-cost-advantage-panasonic-lg-report/ (Accessed: 13 February 2019)
Lambert, F. (2018c) Volkswagen becomes latest automaker to invest in solid-state batteries for electric cars. Electrek, 22 June [online]. Available at: https://electrek.co/2018/06/22/volkswagen-
invest-solid-states-batteries-electric-cars/ (Accessed: 16 February 2019)
Lambert, F. (2018d) What to expect from Tesla in 2019: Model Y, Model S/X Refresh, and more. Electrek, 31 December [online]. Available at: https://electrek.co/2018/12/31/tesla-2019-model-y-
model-s-x-refresh/ (Accessed: 37 February 2019)
Lambert, F. (2018e) GM and Honda are partnering to build next-generation batteries for electric vehicles. Electrek, 7 June [online]. Available at: https://electrek.co/2018/06/07/gm-honda-partner-
next-gen-batteries-electric-vehicles/ (Accessed: 11 February 2019)
Lambert, F. (2018f) Closer look at Rivian’s R1T all-electric pickup truck and why I ordered it. Electrek, 29 November [online]. Available at: https://electrek.co/2018/11/29/rivian-r1t-electric-pickup-
truck-order/ (Accessed: 11 February 2019)
Lambert, F. (2018g) A $52,000 plug-in electric pickup truck w/ range extender receives over 5,000 fleet orders, opens reservation to the public. Electrek, 9 January [online]. Available at:
https://electrek.co/2018/01/09/workhorse-opens-reservation-electric-pickup-truck/ (Accessed: 13 February 2019)
Lambert, F. (2018h) Rivian unveils all-electric pickup truck with unbelievable specs. Electrek, 26 November [online]. Available at: https://electrek.co/2018/11/26/rivian-r1t-all-electric-pickup-specs/
Lienert, P. and White, J. (2018) GM races to build a formula for profitable electric cars. Thomson Reuters, 9 January [online]. Available at: https://www.reuters.com/article/us-gm-electric-insight-
idUSKBN1EY0GG (Accessed: 12 February 2019)
Loveday, E. (2019) Might there be a competitor for the Rivian R1T electric pickup truck? InsideEVs, 6 January [online]. Available at: https://insideevs.com/video-atlis-xt-electric-pickup-truck-500-
mile-range/ (Accessed: 16 February 2019)
Loveday, S. (2018) In-Depth Look At Rivian’s History, Funding & Present. InsideEVs, 26 November [online]. Available at: https://insideevs.com/rivian-automotive-history-future/ (Accessed: 22
February 2019)
Bibliography | 101
Bibliography
MacDonald, J. (2016) Electric vehicles to be 35% of global new car sales by 2040. Bloomberg, 25 February [online]. Available at: https://about.bnef.com/blog/electric-vehicles-to-be-35-of-global-
new-car-sales-by-2040/ (Accessed: 28 February 2019)
MarketLine (2018). Company Profile: General Motors. MarketLine, 16 November [online]. Available at: Subscription Service (Accessed: 10 February 2019)
Maynard, M. (2015) 4 Differences Between Tesla And Other Carmakers. Forbes, 19 August [online]. Available at: https://www.forbes.com/sites/michelinemaynard/2015/08/19/4-differences-
between-tesla-and-other-carmakers/ (Accessed: 17 February 2019)
McGee, P. (2018) Combustion engine car sales to hit peak demand in 2018, say analysts. Financial Times, 30 December [online] Available at: https://www.ft.com/content/62506c24-0aae-11e9-
9fe8-acdb36967cfc?sharetype=blocked (Accessed: 25 February 2019)
McKinsey & Company. (2017) Electrifying insights: How automakers can drive electrified vehicle sales and profitability. McKinsey & Company [online]. Available at:
https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/electrifying-insights-how-automakers-can-drive-electrified-vehicle-sales-and-profitability (Accessed: 26 February 2019)
MergerMarkets. (2019) MergerMarkets [online]. Available at: Subscription Service (Accessed: 13 February 2019)
Motavalli, J. (2010) G.M. Ventures Invests $3.2 Million in Battery Company. New York Times, 9 September [online]. Available at: https://wheels.blogs.nytimes.com/2010/09/09/g-m-ventures-invests-
3-2-million-in-battery-company/ (Accessed: 16 February 2019)
Musk, E. (2018) 16 September. Available at: https://twitter.com/elonmusk/status/1041500594467270656?lang=en (Accessed: 19 February 2019)
Nasdaq. (2019) Nasdaq [online]. Available at: https://www.nasdaq.com/ (Accessed: 13 February 2019)
NVIDIA. (2019) Annual report 2018 [online]. Available at: https://s22.q4cdn.com/364334381/files/doc_financials/annual/2018/NVIDIA2018_AnnualReview-(new).pdf (Accessed: 20 February 2019)
O’Kane, S. (2018) Bollinger Motors teases a rugged electric pickup truck with 200 miles of range. Verge, 10 October [online]. Available at: https://www.theverge.com/2018/10/10/17961494/bollinger-
motors-b2-electric-pickup-truck (Accessed: 16 February 2019)
OICA. (2019) International Organization of Motor Vehicle Manufacturers [online]. Available at: http://www.oica.net/ (Accessed: 12 February 2019)
Ouimet, P. (2012) What Motivates Minority Acquisitions? The Trade-Offs between a Partial Equity Stake and Complete Integration. EFA 2007 Ljubljana Meetings Paper, 20 October [online].
Available at http://dx.doi.org/10.2139/ssrn.966700 (Accessed: 12 February 2019)
Bibliography | 102
Bibliography
Prenzler, C. (2018) Rivian announces “Half a Billion” in Funding, Including $200M in Debt from London-based Bank. AdaptBN, 23 May [online]. Available at:
https://www.adaptbn.com/home/2018/5/23/rivian-announces-half-a-billion-in-funding-raising-200m-in-debt-from-london-based-bank (Accessed: 16 February 2019)
Pressman, M. (2018) Tesla’s Business Model More Similar To Amazon’s Than You Think. CleanTechnica, 30 June [online]. Available at: https://cleantechnica.com/2018/07/30/teslas-business-
model-more-similar-to-amazons-than-you-think/ (Accessed: 17 February 2019)
Pulliam, S., Ramsey, M. and Mullins, B. (2016), Elon Musk Supports His Business Empire With Unusual Financial Moves. The Wall Street Journal, 27 April [online]. Available at:
https://www.wsj.com/articles/elon-musk-supports-his-business-empire-with-unusual-financial-moves-1461781962 (Accessed: 14 February 2019)
PwC. (2017a) Connected Car Report 2016. PwC [online]. Available at: https://www.strategyand.pwc.com/media/file/Connected-car-report-2016.pdf (Accessed: 9 February 2019)
PwC. (2017b) The 2017 Strategy & Digital Auto Report. PwC [online]. Available at: https://www.strategyand.pwc.com/media/file/2017-Strategyand-Digital-Auto-Report.pdf (Accessed: 11 February
2019)
Pyper, J. (2019) A Q&A with Rivian, the Amazon-Backed Electric Truck Startup. GTM, 20 February [online]. Available at: https://www.greentechmedia.com/articles/read/rivian-amazon-backed-
electric-truck-startup#gs.6FUn46T8 (Accessed: 21 February 2019)
Randall, C. (2019) Atlis presents electric pickup with 800 km range. Electrive.com, 7 January [online]. Available at: https://www.electrive.com/2019/01/07/atlis-presents-electric-pickup-with-800-km-
range/ (Accessed: 25 February 2019)
Randall, T. and Halford, D. (2019) Tesla Model 3 Tracker. Bloomberg, 27 February [online]. Available at: https://www.bloomberg.com/graphics/2018-tesla-tracker/ (Accessed: 27 February 2019)
Renaissance Capital. (2019) All Time Largest U.S. IPOs. Renaissance Capital [online]. Available at: https://www.renaissancecapital.com/IPO-Center/Stats/Largest-US-IPOs (Accessed: 25 February
2019)
Rivian. (2019) The world’s first Electric Adventure Vehicles. Rivian [online]. Available at: https://products.rivian.com/ (Accessed: 22 February 2019).
Seeking Alpha. (2018a) Cruise Valuation up to $15bn. Seeking Alpha, 3 October [online]. Available at: https://seekingalpha.com/news/3394743-cruise-valuation-15b (Accessed; 9 February 2019)
Seeking Alpha. (2018b) Tesla's Low 2019 Capex Could Harm Its Growth Story And Brand Value. Seeking Alpha, 25 February [online]. Available at: https://seekingalpha.com/article/4243835-teslas-
low-2019-capex-harm-growth-story-brand-value?dr=1 (Accessed; 26 February 2019)
Seppala, J. (2018) Inside the automotive startup taking EVs off-road. Engadget, 21 May [online]. Available at: https://www.engadget.com/2018/05/21/rivian-ev-truck-suv-detroit/?guccounter=1
Bibliography | 103
Bibliography
Sheetz, M. (2019) Tesla's electric vehicle dominance is about to have 'serious competition,' Morgan Stanley says. CNBC, 11 February [online]. Available at:
https://www.cnbc.com/2019/02/11/morgan-stanley-serious-tesla-electric-vehicle-competition-from-rivian.html (Accessed: 20 February 2019)
Smith, A. (2019) Silverado vs. Sierra. PonyParts, 13 February [online]. Available at: https://www.cjponyparts.com/resources/chevy-silverado-vs-gmc-sierra (Accessed: 15 February 2019)
Smith, B. (2018) The future of EVs: “greener pasture”. Experian, 2 November [online]. Available at: http://www.experian.com/blogs/insights/2018/11/future-evs-greener-pastures/ (Accessed: 12
February 2019)
Snyder, J. (2017) Crossovers and SUVs fatten profit margins. Automotive News, 24 July [online]. Available at: https://www.autonews.com/article/20170724/RETAIL01/170729911/crossovers-and-
suvs-fatten-profit-margins (Accessed: 22 February 2019
Soule, M. (2019) Cadillac Shows Brand’s First Fully Electric EV. Cadillac website, 13 January [online]. Available at:
https://media.cadillac.com/media/us/en/cadillac/news.detail.html/content/Pages/news/us/en/2019/jan/0114-cadillac-ev.html (Accessed: 12 February 2019)
Statista. (2019a) US light truck retail sales from 1980 to 2018. Statista [online]. Available at: Subscription Service (Accessed: 10 February 2019)
Statista. (2019b) Car brands: General Motors. Statista [online]. Available at: Subscription Service (Accessed: 10 February 2019)
Statista. (2019c) Volume of the ten largest secondary equity offerings until June 2009. Statista [online]. Available at: Subscription Service (Accessed: 24 February 2019)
Statista. (2019d) Number of Tesla vehicles delivered worldwide from 3rd quarter 2015 to 4th quarter 2018. Statista [online]. Available at: Subscription Service (Accessed: 27 February 2019)
Statista. (2019e) Tesla's revenue from FY 2008 to FY 2018. Statista [online]. Available at: Subscription Service (Accessed: 27 February 2019)
Stockreports+. (2019) Tesla Inc. Detailed Stock Report. Thomson Reuters, 14 February [online] Available at: Subscription Service (Accessed: 18 February 2019), pp. 3-5.
Stringer, D. and Buckland, K. (2019) Before the Electric car takes over, someone needs to reinvent the battery. Bloomberg, 6 January [online]. Available at:
https://www.bloomberg.com/news/articles/2019-01-06/before-the-electric-car-takes-over-someone-needs-to-reinvent-the-battery (Accessed: 12 February 2019)
Tannert, C. (2019) Meet R.J. Scaringe, Founder Of Rivian Automotive—And Tesla’s Worst Nightmare. Forbes, 8 February [online]. Available at:
https://www.forbes.com/sites/chucktannert/2019/02/08/meet-rj-scaringe-founder-of-rivian-automotiveand-teslas-worst-nightmare/#75b90e617113 (Accessed: 23 February 2019)
Tesla Inc. (2011) Annual Report 2010 [online]. Available at: http://www.annualreports.com/HostedData/AnnualReportArchive/t/NASDAQ_TSLA_2010.pdf (Accessed: 20 February)
Bibliography | 104
Bibliography
Tesla Inc. (2018) Annual Report 2017 [online]. Available at: http://www.annualreports.com/HostedData/AnnualReports/PDF/NASDAQ_TSLA_2017.pdf (Accessed: 20 February)
Tesla Inc. (2019a) Annual Report 2018 [online]. Available at: http://ir.tesla.com/static-files/15df7636-8cd8-4b18-989b-4badeeda806c (Accessed: 25 February)
Tesla Inc. (2019b). Company website. Tesla Inc. [online]. Available at: https://www.tesla.com/
The Economist. (2017) After electric cars, what more will it take for batteries to change the face of energy? The Economist, 12 August [online]. Available at: Subscription Service (Accessed: 25
February 2019)
Thomson One Banker. (2019) Thomson One Banker. Thomson Reuters [Online]. Available at: http://banker.thomsonib.com/
Thomson Reuters Eikon. (2019) Thomson Reuters Eikon. Thomson Reuters [Online]. Available at: Subscription Service
UCSUSA. (2017) Barriers to Renewable Energy Technologies. UCSUSA, 20 December [online]. Available at: https://www.ucsusa.org/clean-energy/renewable-energy/barriers-to-renewable-energy
Vlasic, B. (2017) In Pivotal Moments, Tesla Unveils Its First Mass-Market Sedan. New York Times, 29 July [online]. Available at: https://www.nytimes.com/2017/07/29/business/tesla-model-3-elon-
musk.html (Accessed: 27 February)
Volvo. (2018) Annual report 2017 [online]. Available at: https://www.volvogroup.com/content/dam/volvo/volvo-group/markets/global/en-en/investors/reports-and-presentations/annual-reports/annual-

and-sustainability-report-2017.pdf (Accessed: 15 February 2019), pp. 20-30.
Wayland, M. (2018) Unlike 2008, GM cutting jobs, plants proactively. Automotive News, 3 December [online]. Available at: https://www.autonews.com/article/20181203/OEM/181209962/unlike-
2008-gm-cutting-jobs-plants-proactively (Accessed: 27 February 2019)
Wedbush. (2019) Tesla Inc. Company report. Thomson Reuters, Wedbush, 11 February [online]. Available at: Subscription Service (Accessed: 19 January 2019)
Bibliography | 105
Bibliography
Welch, D. (2017) GM Sees Path to Elusive EV Profits, 1 Million Sales a Year. Bloomberg, 15 November [online]. Available at: https://www.bloomberg.com/news/articles/2017-11-15/gm-forecasts-1-
million-electric-car-sales-by-2026-as-costs-drop (Accessed: 12 February 2019)
Welch, D. (2018a) GM Races Tesla to Quicker Electric-Car Battery Recharging Times. Bloomberg, 30 August [online]. Available at: https://www.bloomberg.com/news/articles/2018-08-30/gm-races-
tesla-to-quicker-electric-car-battery-recharging-times (Accessed: 10 February 2019)
Welch, D. (2018b) GM Plans More than 14,000 Job Cuts, Seven Factory Closing. Bloomberg, 26 November [online]. Available at: https://www.bloomberg.com/news/articles/2018-11-26/gm-to-cut-
10-000-jobs-targets-5-factories-for-closing-next-year (Accessed: 12 February 2019)
Welch, D., Bergen, M. and Barinka, A. (2018) GM is exploring listing shares of cruise self-driving unit. Bloomberg, 15 June [online]. Available at: https://www.bloomberg.com/news/articles/2018-06-
15/gm-is-said-to-explore-listing-shares-of-cruise-self-driving-unit. (Accessed: 9 February 2019)
WorkHorse. (2019) Company website. WorkHorse [online]. Available at: https://www.bollingermotors.com/ (Accessed: 20 February 2019)
Xerfi. (2018) The Global Carmaking Industry: The Market, Xerfi Market Research. Available at: Subscription Service (Accessed: 10 February 2019)
Zhang, Y. and Hull, D. (2019) Elon Musk in China to Break Ground for First Tesla Factory Outside U.S. Bloomberg, 7 January [online]. Available at: https://www.bloomberg.com/hyperdrive
Zhang, Y., Naughton, K., Rauwald, C. and Sachgau, O. (2018) China is Leading the World to an Electric Car Future. Bloomberg, 14 November [online]. Available at:
https://www.bloomberg.com/news/articles/2018-11-14/china-is-leading-the-world-to-an-electric-car-future (Accessed: 27 February 2019)
Bibliography | 106

The Cash Cows Mathias Bohn, Rodrigo Garcia, Marlène Luce, Roman Zanoli HEC Paris Paris, March 1, 2019

Uploaded by

Copyright:

Available Formats

The Cash Cows Mathias Bohn, Rodrigo Garcia, Marlène Luce, Roman Zanoli HEC Paris Paris, March 1, 2019

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

The Cash Cows Mathias Bohn, Rodrigo Garcia, Marlène Luce, Roman Zanoli HEC Paris Paris, March 1, 2019

Uploaded by

Copyright:

Available Formats

The Cash Cows

Mathias Bohn, Rodrigo Garcia, Marlène Luce, Roman Zanoli

The Cash Cows

Executive Market Strategic Fit Financial Feasibility Alternative Conclusion |4

Executive Market Strategic Fit Financial Feasibility Alternative Conclusion |5

The right choice for

Should General Motors acquire Tesla?

Executive Market Strategic Fit Financial Feasibility Alternative Conclusion |7

The future of the

Executive Market Strategic Fit Financial Feasibility Alternative Conclusion |9

Executive Market Strategic Fit Financial Feasibility Alternative Conclusion | 10

Executive Market Strategic Fit Financial Feasibility Alternative Conclusion | 11

24.38 24.96 By 2025, China’s leaders want 7 29.8

Executive Market Strategic Fit Financial Feasibility Alternative Conclusion | 13

Vehicles in the US CAGR 2014-2018 EV models in segment EV models in segment

Model S/3 Chevy Bolt i3 Leaf i-MiEV ID Mission E Rapide E Urban EV

Roadster E-golf Ioniq E i8 Focus E XJ Taycan Electric

Model X Soul e6 RAV4 EV EQ Q6 e-tron X3 Model Y

XC90 T8 X5 Xdrive I-PACE Kona XC40 BUDD-e Niro

Pickup Workhorse F-150 electric Pickup truck

Executive Market Strategic Fit Financial Feasibility Alternative Conclusion | 14

The state of GM The state of Tesla The fit between them

The state of GM The state of Tesla The fit between them

Executive Market Strategic Fit Financial Feasibility Alternative Conclusion | 17

Executive Market Strategic Fit Financial Feasibility Alternative Conclusion | 18

• GM plans to introduce 20 electric vehicles

Executive Market Strategic Fit Financial Feasibility Alternative Conclusion | 19

SAIC Volkswagen 22 -5.2%

Beijing Benz Automotive 7 250 -4.2%

Executive Market Strategic Fit Financial Feasibility Alternative Conclusion | 20

The state of GM The state of Tesla The fit between them

Executive Market Strategic Fit Financial Feasibility Alternative Conclusion | 23

Executive Market Strategic Fit Financial Feasibility Alternative Conclusion | 25

Genesis 1,590 Nissan LEAF 204

Executive Market Strategic Fit Financial Feasibility Alternative Conclusion | 26

Tesla Pickup Truck Tesla Model Y Tesla Roadster 0

Executive Market Strategic Fit Financial Feasibility Alternative Conclusion | 27

The state of GM The state of Tesla The fit between them

Batteries for EVs Sales networks Brand portfolio

Executive Market Strategic Fit Financial Feasibility Alternative Conclusion | 29

Executive Market Strategic Fit Financial Feasibility Alternative Conclusion | 30

Trading and Business case Assessment of

Trading and Business case Assessment of

Comparable analysis Purchasing price

Current market valuation Premium

Source: Own analysis and illustration

Executive Market Strategic Fit Financial Feasibility Alternative Conclusion | 33

Renewable energies Tech-companies involved in autonomous driving

Executive Market Strategic Fit Financial Feasibility Alternative Conclusion | 35

• Automotive and energy company

• BYD Auto is an OEMs which is the

• Automotive company, owner of Volvo 6%

• Manufacturer of electric cars,

Executive Market Strategic Fit Financial Feasibility Alternative Conclusion | 36

2,3 20,5 112,6 232,4 9,2

0,4x 14,1x 30,8x 722,4x 5,7x

0,5x 2,7x 3,4x 215,3x 60,0x

1,7x 10,8x 12,0x 1.889,0x 30,7x

2,1x 16,3x 76,6x 20,7x 1,0x

Main assumptions and valuation*, Main assumptions and valuation