Tesla Insiders
An Analysis of Financial Information Relevant to the users of Tesla Inc's financial statements
University of Pretoria Group Presentation
Overview
Tesla Inc is currently the largest manufacturer of electric vehicles worldwide.
The Cybertruck is the latest Electric Vehicle (EV) and current flagship product, plagued with problems, from design flaws to public opinion.
Elon Musk, the CEO of Tesla, often expresses his opinion on socio-political matters on X (formerly Twitter).
Lithium is very important for the batteries used in EVs, with demand projected to skyrocket and the environmental impacts a cause for concern.Our presentation will focus on why the impact that the the Cybertruck recall, Elon Musk's tweets as well lithium mining and battery manufacturing is important for the users of Tesla's financial statements.
Cybertruck Recall
The Tesla Cybertruck had multiple delays and recalls throughout its release. Due to recalls design changes, supply chain constraints, and production challenges caused a worrying loss of market share and delayed revenue.This has caused significant repair costs and reputational damage for Tesla. Earnings and revenue have both been on a decline, however while initially Tesla stock price was declining it has slowly started to recover.Nontheless, Tesla's market value remains volatile due to ongoing quality failures and public actions by Elon Musk. To counteract these issues, Tesla is enhancing quality control and production processes, including more rigorous testing of new models to prevent future recalls.
Elon Musk Social Media Posts
There is a determinable effect of the tweets made by Elon Musk and the stock prices of Tesla, however the effect is simply a short-term reaction, caused by public opinion swaying and then returning to the norm. The effects can vary, depending on the context, sentiment and content of the tweets, with varying reactions from the public for each.Furthermore, Tesla is also suffering losses in its stock prices and its market share for electric vehicle sales in the US, while also facing a decrease in its revenue in the automotive sector, largely owing to heavy competition in China.These factors show the role of social media and public opinion on stock prices of companies, while also showing the effects of competition even on industry giants.
The impact of Lithium mining and battery manufacturing
The demand for Lithium is expected to grow 40-fold by 2050, largely due to the banning of internal-combustion engines by 2030/2035 by many first world nations, as Lithium-ion batteries are used for electric vehicles.As Tesla is the world's largest electric vehicle manufacturer and is likely to remain the leader in EV innovation and dominant in the market, their own demand for Lithium will also grow in order to manufacture more lithium-ion batteries used.A cause of concern is the environmental impact that this large spike in demand will have. Seeing that Tesla is so closely connected to the Lithium mines, an argument can be made that they should disclose the environmental impacts that the extraction of Lithium will have.
Watch our video to learn more!
SUMMARY OF OUR RESEARCH
By researching Tesla from multiple angles to identify aspects that are both relevant and faithfully represented to users of the financial statements our team aimed to discuss interesting views which may or may not be thought of first when one Thinks of Tesla as a whole. The Tesla CyberTruck was clearly shown as a big part of Tesla’s current image in both quality and innovative designs in the EV landscape. It is important to be aware of how the failures of the CyberTruck have damaged the company and even more importantly is how Tesla plans to fix things moving forward. Elon Musk’s social impact is an interesting idea to think about and how it has potential to affect Tesla’s financials or image, one cannot argue against the fact Elon Musk and Tesla are synonymous. Tesla’s environmental responsibilities with lithium mining is actually quite a big and vast topic when looking at the company with a future perspective in a business world which gives more focus to nonfinancial impacts. By creating a website and short documentary video on this topic, it has allowed our group to use digital output in a creative way, letting the user go at their own pace and absorb information in a relaxed, entertaining and educational way. Perhaps disclosure from companies could lean into this more digestible style for those who might not just want to read, but rather watch, hear and interact with financial, social and environmental information from a company to leave a stronger memorable impact than any ordinary report ever could.