Devonshire Research Group - Tesla Motors - TSLA - Public Release - Part II

8/16/2019 Devonshire Research Group - Tesla Motors - TSLA - Public Release - Part II

1/37

May 2016May 2016May 2016May 2016

Devonshire Research Group, LLCDevonshire Research Group, LLCDevonshire Research Group, LLCDevonshire Research Group, LLC

Tesla Motors, Inc.

Part II

This presentation is a research report an is !or in!or"ational purposes only. #pinions e$presse are solely those o! Devonshire Research Group an this is not a reco""enation to purchase securities iscusse

herein. This presentation is con!iential an "ay not %e reprouce or istri%ute &ithout the e$press consent o! Devonshire Research Group. Please re!er to the ne$t slie !or aitional isclosures.


2/37


3/37

-Attorney Confidential-

otice o! invest"ent interests

7

3s o! the pu%lication ate o! this report, the Devonshire Research Group LLC has a net

short position in the stoc/, put options, %ons, an creit s&aps o! Tesla Motors, Inc.'(T-L3) or (Tesla)* an stans to realie +ains in the event that the price o! T-L3s

securities eclines over the lon+ run, or i! invest"ent senti"ent i"proves the appeal o! an

e$pecte ecline in any o! its securities.

Devonshire Research Group reco+nies that &hile its strate+y re!lects a lon+ ter" %earishoutloo/ !or Teslas security instru"ents, the short ter" i"plication o! po&er!ul

"ar/etin+, incluin+ the po&er o! social "eia t&eetin+ %y the C4# an his PR !ir", &ell

orchestrate an heavily %lo++e prouct launches, an a eep an po&er!ul short ter"

"eia control an attention span, su++ests unpreicta%le short ter" volatility.

Devonshire Research Group LLC has a lon+ ter" net short position across "ultiple

security instru"ents.


4/37


otice o! nona!!iliation

8

Part I o! this analysis, release pu%licly in March 2016, &as &iely praise as e!!ective an !actriven. Critics o!

the analysis alle+e that the &or/ o! the Devonshire Research Group is un!airly %iase, ue to a!!iliations &ith

inustry players &ho see/ to li"it the "ar/et per!or"ance o! Tesla. This is interestin+, %ut untrue.

Devonshire Research Group here%y asserts that it oes not have pro!essional or %usiness relationships &ith any o!

the !ollo&in+ or+aniations9

General Motors

:or

Toyota

The City o! Detroit

;och Inustries

4$$onMo%il

Royal Dutch -hell


5/37


#n !inancial innovation an creative accountin+

=

ever assu"e "alice &hen stupiity &ill su!!ice.

anlons Raor

4verythin+ shoul %e as si"ple as it can %e, %ut not si"pler.

#cca"s Raor


6/37


4$ecutive -u""ary

6

o& closely oes T-L3s !inancin+ "oel "irror the !eatures o! co""on Poni, Pyra"i, an Matri$ sche"es>− u"erous cautionary e$a"ples share !eatures &ith T-L3, incluin+ hype riven %y (visionary leaers)

− T-L3 has accepte capital !ro" unsophisticate investors &ith %ol clai"s on return an?or prouct value

− I! T-L3 !ails to eliver on these clai"s it has the potential to enter a eath spiral

− Most co""on eath spirals o not re5uire "alicious intent, %ut rather e$cessive 'even elusional* a"%ition

The pro!ita%ility o! the Moel 7 epens on T-L3s a%ility to s5ueee its supply chain@ this is a tall orer− -ophisticate suppliers '"ost nota%ly Panasonic* &ill !i+ht !or their share o! the pro!it

− Panasonics rechar+ea%le %attery ivision is constraine in ter"s o! invest"ent capacity an pro!it e"ans

− Current suppliers o! nu"erous strate+ic, hi+htechnolo+y co"ponents have little IP an e$port to the A-

− Many Chinese suppliers are vulnera%le to patent in!rin+e"ent accusations an coul !ace ITC inunctions

T-L3s use o! ta$ creits isproportionately %ene!its the &ealthy at the e$pense o! the avera+e ta$payer

− This ine5uality is a !eature o! the lu$ury!irst "ar/et penetration strate+y

− The election year introuces si+ni!icant ris/ !or T-L3s continue reliance on ta$payer su%siies


7/37


Tesla has en+a+e in a++ressive accountin+ that calls to "in thee$periences o! 4nron an BorlCo"@ its !uture is hi+hly uncertain

7

2

1

0

1

2

7

8

20022001200011E1

0.0

0.1

0.2

0.7

0.8

0.=

0.6

0.C

0.E

0.D

1.0

1DD6 1DDC 1DDE 1DDD 2000 2001

2.=

2.0

1.=

1.0

0.=

0.0

0.=

2012 2017 2018 201=

BorlCo" et Inco"e BorlCo" et Inco"e BorlCo" et Inco"e BorlCo" et Inco"e

'A-


8/37


Tesla is not a car, %attery, or tech co"pany@ it is an e$peri"ental!inancial services co"pany an shoul %e re+ulate as such

E

Teslas !inancin+ "oel is !ra+ile@ it is atte"ptin+ to "ana+e "ultiple !inancial instru"ent "oels uner the sa"e

accountin+ u"%rellaF to our /no&le+e, one o! the last co"panies to atte"pt this level o! !inancial innovation &as 4nron

Teslas !inancin+ "oel is !ra+ile@ it is atte"ptin+ to "ana+e "ultiple !inancial instru"ent "oels uner the sa"e

accountin+ u"%rellaF to our /no&le+e, one o! the last co"panies to atte"pt this level o! !inancial innovation &as 4nron

Ase 4H an state

ta$ su%siies to

secure Moel -,

price point

Ase ta$ creits,

"ultiyear pay%ac/

to eploy

-uperchar+ers

Ase +lo%al (+reen)

su%siies,

incentives to

reuce price point

Convince evaa

to su%siie

creation o! %attery

!actories, lithiu"

"ines

Ase hi+h pre

orers to %oost

share price, issue

shares

-ecure Colorao

use car resale

creit to uphol

epreciation

Collect J1/

eposits !or Moel

7 to !inance -GK3

Convince

Panasonic to invest

"aority o! spen

in Gi+a!actory

T-L3 actin+ as an unre+istere %ro/er ealer

:ra+ile, unsustaina%le,

unpreicta%le approachin+

A- election year

-peculative upco"in+ (innovations)

Ase HC to

%ootstrap Roaster

prototypes

#verprice

Roaster@ use

pro!it to irect

Moel - RKD

Distri%ute cost o!

scale %y loc/in+ in

"ultiyear contracts

Pay interest on

eposits o! !uture

"oels>

Partner &ith rie

sharin+ apps such

as A%er>

I"ple"ent poole

!ractional ? share

o&nership "oels>

3llo& a %arter

syste" to convert

preorer eposits

into coupons>

4nter into a ero

o&nership "oel@

the perpetual

lease>

Develop onecar

pernei+h%orhoo

leasin+>

Introuce a pre

orer lottery, allo&

ri+hts to %e sol to

7r parties>

3%anon PKL,


9/37


onG33P strate+ies to li"it Moel - epreciation %oost stoc/

price at the cost o! increase !ra+ility an hien o&nsie ris/

-ource9 4"uns.co", 3D3 use car +uie 201=@ Devonshire Research Group analysis su++ests

traitional accountin+ strate+ies &oul %e su!!icient &ithout pro"ise resale +uarantees an %uy%ac/ pricin+

Moel 7 Moel -

RHG threshol

Moel -

Moel 7 reveal threatens to

tan/ Moel - resale values, so

Tesla hoars use vehicles to

resell uner Colorao use

4H creit incentive

Moel - resale value

+uarantee closes

ne+ative !ee%ac/ loop9

lia%ility +ro&s as Moel

- epreciates !aster


10/37


11/37


To unerstan Teslas %usiness "oel, &e "ust introuce novel

!inancial e!initions

11

I! a %usiness is operate as a :4P:, investors shoul not carry the e$pectation that such an enterprise &ill %e run

!or a pro!it@ instea, this or+aniation shoul %e ter"inate, or re+ulate as a social service or nonpro!it

I! a %usiness is operate as a :4P:, investors shoul not carry the e$pectation that such an enterprise &ill %e run

!or a pro!it@ instea, this or+aniation shoul %e ter"inate, or re+ulate as a social service or nonpro!it

:utureearnin+ pyra"ial !inancin+ ':4P:* is a %usiness yna"ic characterie %y the act o! raisin+

capital to !inance !uture losses rather than !uture returns. The assu"ption in this yna"ic is that

the !uture losses &ill %e covere %y a secon capital raise 'si"ilarly pyra"ial* &hich &ill allo&

so"e investors to e$it pro!ita%ly, althou+h "any &ill reinvest an ? or accept losses.

Bhen properly reco+nie, "ana+e, an re+ulate, :4P: can %e a sustaina%le arran+e"ent that

operates &ithin %oth the spirit an letter o! the la&. 4$a"ples "ay %e !oun in the real" o! pu%lic

services, nonpro!its, an social service pro+ra"s. o&ever, &hen per!or"e "aliciously &ith

intent to e!rau, :4P: !or"s the yna"ic unerlyin+ ille+al Poni, pyra"i, an "atri$ sche"es.

3++ressive cashne+ative +ro&th ventures that rely entirely on pro!ita%ility at scale occupy a

an+erous "ile +roun &here elusion o!ten su%stitutes !or "alice.

:uture4arnin+

Pyra"ial :inancin+

':4P:*

LossTolerant

Investors

'LTIs*

3 cate+ory o! investors that are capa%le o! losin+ their invest"ent in an enterprise, co"pany, or

asset &ith or &ithout their /no&le+e o! this loss.

:inancin+ Pyra"iReportin+

':PR*

3 !or" o! !inancial reportin+ aopte !ro" nonpro!it an venture capital investin+ that accurately re!lects %usinesses that are esi+ne to lose "oney !or lon+ perios o! ti"e until su%se5uent

investors are secure, &ho "ust con!ront the nees to %uilin+ a pro!ita%le %usiness


12/37


13/37


14/37


Bhile !utureearnin+ !inancin+ is o!ten not "alicious, elusional

a"%ition can %e a i!!erent path to the sa"e outco"e

18

Ansustaina%le -ustaina%le

Lar+escale

-"allscale

TheTheTheThe ! !! !utureutureutureutureearnin+ pyra"ial !inancin+ lanscapeearnin+ pyra"ial !inancin+ lanscapeearnin+ pyra"ial !inancin+ lanscapeearnin+ pyra"ial !inancin+ lanscape

(Too %i+ to !ail)

4veryay !rau 3cceptance o! value loss

Massive !rau

Mas/s !rau %y "i$in+ &ith

le+iti"ate %usiness activities Care!ully %alances +ro&th an

ris/ to prolon+ sche"e

4scapes %e!ore sche"e !ully

collapses

Hital, u%i5uitous, an

nationalie pu%lic +oos #perates outsie the pu%lic

"ar/etplace

Li"its accountin+ scrutiny

an speculative invest"ent

Tar+ets unsophisticate ? vulnera%le investors

4ncoura+es investor

(entrepreneurialis")

Re"ains anony"ous, then

vanishes

3r+ues !or non!inancial valueproposition to o!!set loss

3ppeals to e"otion an

instinct '%ranin+, PR, etc.*

:ails !ast an ac/no&le+es

li"its to +ro&th

Meiu"scale

Many HC%ac/e startups

3++ressive+ro&th Anicorns

Giants poise to !ail

Typical Poni, pyra"i,

an "atri$ sche"es Charities an pu%lic &or/s

Delusional ? #vera"%itious

-ource9 Devonshire Research Group analysis an opinion@ co""entary !ro" 4lon

Mus/ intervie&s an 5uarterly reports


15/37


Bhile Tesla has %et the !ar" on e$tre"e +ro&th, insolvency is an

unaccepta%le !all%ac/ strate+y !or a pu%licly trae co"pany

1=

-ustaina%le

Lar+escale

-"allscale

ota%le pyra"ialota%le pyra"ialota%le pyra"ialota%le pyra"ial ! !! !inancin+ enterprisesinancin+ enterprisesinancin+ enterprisesinancin+ enterprises

Meiu"scale

4nron

A- -ocial

-ecurity

:ractional

Reserve


16/37


To sustain its !inancin+ "oel, Tesla &oul nee to court

successively lar+er (losstolerant investors) or see/ su%siies

16

-ustaina%le

Lar+escale

-"allscale

Tesla9 anticipate strate+ic optionsTesla9 anticipate strate+ic optionsTesla9 anticipate strate+ic optionsTesla9 anticipate strate+ic options

Meiu"scale

Tesla only survives as lon+ as it

can continue to secure

successively lar+er (losstolerant

investors) Panasonic has a+ree

to %e ne$t, investin+ in the

Gi+a!actory. I! Panasonic !ails to

invest at an a++ressive rate, the

!inancin+ sche"e collapses

Tesla e"%races the su%siy

huntin+ %usiness "oel !ully,

%eco"es a pu%lic +oo "ana+e

as a nonpro!it, supplyin+ electric

vehicles to police epart"ents,

schools, state transportation

pro+ra"s, &el!are recipients

Prepay eposits %eco"e

unsustaina%le@ Tesla continues to

launch ne& "oels, acceptin+steaily lar+er up!ront eposits

!ro" prospective custo"ers, &ith

lon+er proecte elivery ates.

Current eposit re!uns are

!une %y !uture "oel eposits

Ansustaina%le

Tesla MotorsTesla MotorsTesla MotorsTesla Motors

'Toay*'Toay*'Toay*'Toay*

TeslaTeslaTeslaTesla

Moel Moel Moel Moel


Moel Moel Moel Moel


RoasterRoasterRoasterRoaster


RoasterRoasterRoasterRoaster


Moel -Moel -Moel -Moel -


Moel -Moel -Moel -Moel -


Moel Moel Moel Moel


Moel Moel Moel Moel

-uperchar+er-uperchar+er-uperchar+er-uperchar+er

et&or/ et&or/ et&or/ et&or/

-uperchar+er-uperchar+er-uperchar+er-uperchar+er

et&or/ et&or/ et&or/ et&or/

Gi+a!actory Gi+a!actory Gi+a!actory Gi+a!actory Gi+a!actory Gi+a!actory Gi+a!actory Gi+a!actory


Moel 7Moel 7Moel 7Moel 7


Moel 7Moel 7Moel 7Moel 7

Delusional ? #vera"%itious

-ource9 Devonshire Research Group analysis an opinion@ co""entary !ro" 4lon Mus/ intervie&s

an 5uarterly reports@ Panasonic 5uarterly reports an press releases


17/37


Tesla is operationally vulnera%le, too epenent on the success o! the Moel7, an nees to prepare !or the possi%ility o! a !utureearnin+ eath spiral

1

#ur thesis is t&o!ol9 '1*'1*'1*'1* the li/elihoo o! a success!ul Moel 7 launch is lo&, an '2*'2*'2*'2* Tesla &ill %e !orce

to see/ resiual value as a heavilysu%siie 'an eciely nonlu$ury* pu%lic +oo provier

#ur thesis is t&o!ol9 '1*'1*'1*'1* the li/elihoo o! a success!ul Moel 7 launch is lo&, an '2*'2*'2*'2* Tesla &ill %e !orce

to see/ resiual value as a heavilysu%siie 'an eciely nonlu$ury* pu%lic +oo provier

3ust"ent neee


18/37


#n the A- auto inustrys i"penin+ co"petitive response to Tesla

1E

BhereQs "y +an+stas an all "y thu+s

Thro& the" hans up an sho& so"e love

3n I Belco"e you to Detroit City

I sai Belco"e to Detroit City

4very place, every&here &e +o Man &e eep every&here &e roll

3s/ aroun an they all /no& Tric/y

ThatQs &hatQs +oo "an they all say Tric/y

Tric/ Tric/, Belco"e 2 Detroit


19/37


4$ecutive -u""ary

1

o& closely oes T-L3s !inancin+ "oel "irror the !eatures o! co""on Poni, Pyra"i, an Matri$ sche"es>

−u"erous cautionary e$a"ples share !eatures &ith T-L3, incluin+ hype riven %y (visionary leaers)












20/37


The recent Moel issues hi+hli+ht the !ra+ility o! auto"otive

supplyFTeslas prouction &ill %e li"ite %y its &ea/est lin/

20

A-3 A-3 A-3 A-3

China

-. ;orea

apan

Tai&an


21/37


The cost reuction neee to achieve a J7=/ Moel 7 &ill

+enerate strain throu+hout the supply net&or/

21

Cost %uc/et Cost %uc/et Cost %uc/et Cost %uc/et Cost reuctionCost reuctionCost reuctionCost reuction 3chieva%le> 3chieva%le> 3chieva%le> 3chieva%le> #%stacles#%stacles#%stacles#%stacles

Gross Pro!it EO Li/ely ee o!!settin+ sales volu"e, "ust "aintain hype

-uperchar+er 3llo&ance 0O Li/ely Bill continue to %uil out in!rastructure

Manu!acturin+ #verhea 86O May%e ee to realie econo"ies o! scale in prouction

Drivetrain 67O Anli/ely -uppliers unli/ely to accept price reuction-uppliers unli/ely to accept price reuction-uppliers unli/ely to accept price reuction-uppliers unli/ely to accept price reuction


22/37


Tesla relies !or the "ost part on a lo&cost supply chain "any o! these

players lac/ protecta%le technolo+y an have little +ive on "ar+in

22

0

10

20

70

80

=0

60

C0

80O

100O

E0O

60O

20O

0O

A; apanA; Ger"any Tai&anon+ ;on+


23/37


24/37


The suppliers &ho o o&n IP are not losstolerant an &ill not

%u+e on "ar+ins !or a relatively s"all purchaser such as Tesla

28

1

10

100

1,000

10,000

100,000

1 10 100 1,000 10,000 100,000 1,000,000 10,000,000

A- patents +rante

to supplier

Containers shippe

to Tesla since N7 0

Toyota Motor Corporation

-a"sun+ -i Co., Lt

Panasonic Corporation

ishi/a&a Ru%%er Co., Lt.

Luvata Pori #y

LG 4lectronics Inc

LG Che" Lt.;o%e -teel, Lt.

on+!uin Precision

:u/uta 4lectric K Machinery Co., Lt

:ui Poly"er Inustries Co.

:o$conn Co"puter

:le$tronics International ;!t

Cera"tec G"%h

International Tesla -uppliers &ith 3t Least #ne A- Grante Patent International Tesla -uppliers &ith 3t Least #ne A- Grante Patent International Tesla -uppliers &ith 3t Least #ne A- Grante Patent International Tesla -uppliers &ith 3t Least #ne A- Grante Patent


25/37


Panasonic &ill !ace or+aniational pressure to a%anon the Tesla

partnership i! its Gi+a!actory invest"ent oes not pay iviens

2=-ource9 Panasonic 3nnual Report 201=

The auto"otive se+"ent is the s"allest

se+"ent at Panasonic, an 4H %attery

sales are ust one co"ponent o! this

revenue strea"

The Gi+a!actory invest"ent alone

accounts !or nearly three years o!

auto"otive capital e$penitureFthis is

a hu+ely outsie se+"ent invest"ent

J1.6 <

J616 MM

201= auto"otive

capital invest"ent

Capital ple+e

to Gi+a!actory

2.6$2.6$2.6$2.6$

ousin+

26O

Devices


26/37


Panasonics rechar+ea%le %attery ivision is uner the corporate

"icroscope alreay an tar+ete !or "ar+in increases, not co"pression

26-ource9 Panasonic 201= 3nnual Report

Rechar+ea%le %atteries are 1 o! 7 Panasonic ivisionsRechar+ea%le %atteries are 1 o! 7 Panasonic ivisionsRechar+ea%le %atteries are 1 o! 7 Panasonic ivisionsRechar+ea%le %atteries are 1 o! 7 Panasonic ivisions

an "ana+e &ithin 1 o! 8 lar+e (co"panies)an "ana+e &ithin 1 o! 8 lar+e (co"panies)an "ana+e &ithin 1 o! 8 lar+e (co"panies)an "ana+e &ithin 1 o! 8 lar+e (co"panies)

Rechar+ea%le %atteries are 1 o! 6 lar+e scale ivisionsRechar+ea%le %atteries are 1 o! 6 lar+e scale ivisionsRechar+ea%le %atteries are 1 o! 6 lar+e scale ivisionsRechar+ea%le %atteries are 1 o! 6 lar+e scale ivisions

& && &ithin its port!olio specially tar+ete !or "ar+in increasesithin its port!olio specially tar+ete !or "ar+in increasesithin its port!olio specially tar+ete !or "ar+in increasesithin its port!olio specially tar+ete !or "ar+in increases


27/37


Tesla nees a "iracle in %attery pricin+ to achieve the Moel 7

tar+et price@ there is real ou%t the Gi+a!actory &ill eliver

2-ource9 Rapily !allin+ costs o! %attery pac/s !or

electric vehicles, ature Cli"ate Chan+e, 7?27?1=

Data !it +ives EO annual cost reuction %y leain+ "anu!acturers, su++estin+ Tesla &ill not hit

J1=0 ? /Bh until 2020F&ell past the pro"ise eno!201 Moel 7 elivery ate

Data !it +ives EO annual cost reuction %y leain+ "anu!acturers, su++estin+ Tesla &ill not hit

J1=0 ? /Bh until 2020F&ell past the pro"ise eno!201 Moel 7 elivery ate

100

1,000

2016201=200E 200 2010 2011 2012 2017 2018

J ? /Bh 'lo+ scale*Moel - %attery pac/ cost esti"atesMoel - %attery pac/ cost esti"atesMoel - %attery pac/ cost esti"atesMoel - %attery pac/ cost esti"ates

Generallyaccepte

critical pac/ price

ero"ar+in ra&

"aterial cost !loor

200

800

E00

1=0

118

J10 ? /Bh clai"e %y

Tesla hea o! IR, 08?16

A C fid i l


28/37


4$ecutive -u""ary

2E

o& closely oes T-L3s !inancin+ "oel "irror the !eatures o! co""on Poni, Pyra"i, an Matri$ sche"es>

−u"erous cautionary e$a"ples share !eatures &ith T-L3, incluin+ hype riven %y (visionary leaers)












29/37

Attorney Confidential


30/37


4H ta$ creits over&hel"in+ly !avor the &ealthy@ the avera+e

ta$payin+ citien &ill realie little, i! any %ene!it

70-ource9 (The Distri%utional 4!!ects o! A.-. Clean 4ner+y Ta$

Creits), AC


31/37


Tesla is contri%utin+ to this ine5uality, as it is e$haustin+ its ta$

creits on the lu$ury Moels - an

71

100

1,000

10,000

100,000

1,000,000

0 10,000 20,000 70,000 80,000 =0,000 60,000 C0,000 E0,000 D0,000

:iat =00e


32/37


In 2017, the avera+e Tesla o&ner ha t&ice the househol inco"e

o! other 4H o&ners

72

(Bhile the !iel o! electric vehicles '4Hs* has +ro&n &ith the

Chevrolet Holt, issan Lea! an the Toyota Prius Plu+In, Tesla

%uyers isplay uni5ue i!!erences. H4- sho&s that TeslaH4- sho&s that TeslaH4- sho&s that TeslaH4- sho&s that Tesla

o&ners have ou%le the avera+e househol inco"e o! other 4Ho&ners have ou%le the avera+e househol inco"e o! other 4Ho&ners have ou%le the avera+e househol inco"e o! other 4Ho&ners have ou%le the avera+e househol inco"e o! other 4H

o&ners 'J27,200*o&ners 'J27,200*o&ners 'J27,200*o&ners 'J27,200*. 3s a result, they are "ore li/ely to %e ain+

a Tesla to their househol !leet '=1O* rather than replacin+ a

vehicle &ith its purchase.)

-trate+ic Hision9 e& Hehicle 4$perience -urvey '2017*



33/37


Tesla relies heavily on "anu!acturin+ incentives an ero

e"issions creits

77

Tesla is %uilt on losstolerant pu%lic "oney, %ut this &ill not %e a solution in perpetuity. 4ventually

Tesla &ill nee to stan on its o&n or accept a role as a +overn"entsponsore pu%lic +oo provier

Tesla is %uilt on losstolerant pu%lic "oney, %ut this &ill not %e a solution in perpetuity. 4ventually

Tesla &ill nee to stan on its o&n or accept a role as a +overn"entsponsore pu%lic +oo provier

-u%siy -u%siy -u%siy -u%siy -u%siy sie-u%siy sie-u%siy sie-u%siy sie -ource-ource-ource-ource

Gi+a!actory incentives J1,20 MM evaa ta$payers

eroe"ission creits J=1E MM Cali!ornia ta$payers

:eeral 4H ta$ creits J2E8 MM :eeral ta$payers

C3 sel!+eneration incentive J126 MM Cali!ornia ta$payers

C3 3lternative 4ner+y :inancin+ J0 MM Cali!ornia ta$payers

Discounte Do4 loan J8= MM :eeral ta$payers

-tate 4H ta$ creits J7E MM Cali!ornia ta$payers

-ource9 L3 Ti"es investi+ation, une 201=



34/37




35/37

y

Ta/ea&ay9 Tesla is !ra+ile as a pu%licly trae co"pany e$pecte

to eliver a G33P cash pro!it

Tesla is operatin+ "any !inancin+ %usiness "oels that other entrepreneurs &oul %e prohi%ite !ro"

operatin+, as they "i+ht %e la%ele Poni, Pyra"i, or Matri$ sche"es

Tesla is atte"ptin+ to operate "any co"ple$, inter&oven, novel !inancin+ sche"es uner one roo!, an either

&ill %e a success!ul version o! 4nron, or &ill !all victi" to si"ilar accountin+ challen+es as it atte"pts to

reconcile its operational co"ple$ity to its cash position

I! Tesla is inee operatin+ a :4P:, it is hi+hly !ra+"ente an overly iversi!ie in its tactics, it shoul

eicate "ore o! its ti"e to securin+ losstolerant investors

I! Tesla oes not success!ully secure a lar+er losstolerant investor, the A- +overn"ent shoul seie the

co"pany an convert it into a re+ulate social +oo an pu%lic service

Tesla shoul not %e "ana+e, value, or reporte %y its a%ility to +enerate pro!it, an conse5uently it shoul

atte"pt to see/ ta$ shelter as a nonpro!it or reli+ious or+aniation as 5uic/ly as possi%le

I! Tesla is inee operatin+ !or pro!it, it shoul announce a strate+ic roa"ap to (investors) !or earnin+ a

pro!it in the co"in+ ecae

7=



36/37

y

#n re5uisite s/epticis" over hyper%olic operatin+ tar+ets

76


37/37

7

Than/ you

:or "ore in!or"ation, please contact Devonshire Research Group, LLC at sur!hac/erU%loo"%er+.net

I"a+e V 2016 Devonshire Research Group

Documents

Devonshire Research Group - Tesla Motors - TSLA - Public Release - Part II