Pro-Forma Financial Statements
Known as a company that misses most of its deadlines, the pro-forma statements, exhibited in Appendix F, show the importance of forging ahead with the Nevada Gigafactory and the ramp up in the car production and delivery, releasing Model 3s in 2017 instead of 2018. If Tesla wants to stay in the car business, 2017 is the year they must maximize their resources and accelerate their schedule, otherwise 2018 could be highly influenced by external factors. These factors include the electronic vehicle (EV) tax credits of up to $7,500 per vehicle slated for elimination in 2018 of up to $7,500, as well as the fact that every other automobile manufacturer is racing for their own EV prototype, many of which will be released to the market in 2018 (Fairley, 2016). Both of these factors, in
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Alternately, the early release and sales ramp up provided under the accelerated capitalization plan, allows for a large stock market surge on stock which provides added capital needed. Funding for the increase in Property Plant and Equipment and related expenses is provided by an increase in Long-Term Liabilities from outside financing, which in turn also increases interest expense, but also by the stock purchase surplus. The economies of scale, provided by the larger production facility and the vertical supply chain improvement of making their own batteries, will help Tesla keep the price range firmly in the mid-30s, making them employ more of a blue ocean strategy over their previously focused differentiation approach. To increase the sale of cars, and keep inventory moving as production increases, the immediate need for more sales centers, service centers, employees, as well as long distance charging stations is required, and planned for under the new strategy. Left as is, Tesla will continue to get itself into hot water with its customers because of the insufficient number of service centers for the