By 2022, most of Tesla’s shares are still owned by Elon Musk, among the company’s co-founders and the CEO. Elon Musk is the top individual investor, with a 23.5% stake in the company, equivalent to over 244 million shares. Musk is followed by Lawrence Ellison (founder of Oracle), with a 1.5% company stake. Ellison also sits on Tesla’s board. And Antonio Gracias, among the company’s first investors, has over 1.6 million shares. Other institutional investors and mutual funds like The Vanguard Group (6%), Blackrock (5.1%), and Capital Ventures International also have a good chunk of the company’s stocks.
Table of Contents
Tesla: from innovators to early majority
It takes a minute to strategize where you want to get regarding strategy and vision.
And yet, it takes years, or even decades, to realize that vision.
Tesla is proof of that.
Tesla managed to get into what we can call the “mass manufacturing moment” only by 2021-2022.
The demarcation moment of this mass manufacturing era is the fact that by 2022, Tesla had passed a million cars produced!
For some context, a large group like BMW, which owns several brands and produces gas-powered cars, produced over 2.3 million cars in 2022.
BMW has experienced fluctuating sales numbers from 2018 to 2022, with a peak in 2021 at 2,213,790 units.
Mini sales have been on a general decline since 2018, with a slight uptick between 2020 and 2021, but still lower than previous years.
Rolls-Royce sales have shown an overall increasing trend, reaching their highest point in 2022 with 6,239 units sold.
Thus, you can appreciate how Tesla, by passing a million cars produced, got into the top rankings, even compared to large car manufacturers.
Not only that, Tesla managed to reach that point by also reaching a wide profitability per car.
Tesla’s profit margin per car in 2022 was $9580, compared to over $6000 in 2021 and over $1700 in 2020. As Tesla was working toward mass manufacturing in 2020, the company’s profitability per car increased slightly.
Of course, market dynamics in the EV industry are changing, and competition is on the rise.
While its business model is skewed toward the automotive segment, other segments like services, energy storage, and generation will play a key role in the future.
Automotive sales are the most critical segment for Tesla, with over $71.4 billion in revenue from automotive parts; most of the gross profits come from automotive sales, with over $20 billion in gross profits, or a 28.5% gross margin.
Tesla started with its Roadster by targeting innovators. That was in the early 2000s.
It then moved to target early adopters with its Model S.
And it eventually reached early majority adoption status, with its Model 3!
To be sure, while the process above seems linear, in reality, the history of Tesla is all but linear.
Indeed, the company has gone through various near-death experiences. And it has stumbled upon many massive obstacles to get where it is today.
And even in terms of new model launches, which enabled the company to tackle various segments of the market, in reality, that happened in parallel.
While Tesla was still working on the Roadster, the company was already looking into developing a car (which would eventually become the Model S) to tackle more extensive and more significant pockets of the market.
Key Highlights
Gracias, one of the early investors in Tesla, holds a substantial stake in the company with over 1.6 million shares. Additionally, other institutional investors and mutual funds, including The Vanguard Group (6%), Blackrock (5.1%), and Capital Ventures International, also have notable positions in Tesla. This diverse ownership structure indicates significant interest from both individual and institutional investors, reflecting the confidence in Tesla’s potential and growth prospects.
Tesla’s journey to become a major player in the automotive industry has been a remarkable one. By 2021-2022, the company achieved what can be termed as the “mass manufacturing moment,” surpassing the milestone of producing one million cars. This achievement marked Tesla’s transition from a niche electric vehicle (EV) manufacturer to a significant player in the global automotive market. Competing with established giants like BMW, which produced over 2.3 million gas-powered cars in 2022, Tesla’s accomplishment is a testament to its rapid growth and market acceptance.
The success of Tesla’s mass manufacturing strategy is further highlighted by its impressive profitability per car. In 2022, Tesla’s profit margin per car reached $9580, a substantial increase compared to previous years. This growth trajectory is remarkable, considering the challenges Tesla faced during the early stages of its mass manufacturing efforts. The company’s focus on increasing efficiency, scale, and cost optimization has contributed to its ability to generate higher profits per vehicle.
Tesla’s business model is primarily centered around the automotive segment, which remains the most critical revenue driver. In 2022, the company generated over $71.4 billion in revenue from automotive sales, making it the cornerstone of its operations. Moreover, a significant portion of Tesla’s gross profits, amounting to over $20 billion, comes from automotive sales, reflecting a healthy gross margin of 28.5%. This underscores the importance of automotive sales to Tesla’s overall financial performance.
Tesla’s journey towards mass adoption of its EVs has followed a progressive approach. It started with its first model, the Roadster, targeting innovators and early adopters who were passionate about cutting-edge electric vehicles. As Tesla refined its technology and expanded its product lineup, it gradually moved into the early majority phase, targeting a broader market with its Model S and eventually achieving widespread adoption with the Model 3. This evolution demonstrates Tesla’s ability to appeal to different consumer segments and adapt to the changing demands of the market.
Tesla’s growth has not been without challenges. The company has faced various near-death experiences and significant obstacles along the way. From financial struggles to production challenges and skepticism from the automotive industry, Tesla’s journey has been marked by resilience and determination. Overcoming these hurdles has been crucial in shaping Tesla into the successful and influential company it is today.
Tesla’s expansion beyond the automotive segment is also notable. While automotive sales remain central to its operations, Tesla has ventured into other areas, such as services, energy storage, and generation. These additional segments are expected to play a key role in Tesla’s future growth and diversification. As the company continues to innovate and expand, its impact on various industries and the transition to sustainable energy solutions are likely to be significant.
Tesla is vertically integrated. Therefore, the company runs and operates the Tesla’s plants where cars are manufactured and the Gigafactory which produces the battery packs and stationary storage systems for its electric vehicles, which are sold via direct channels like the Tesla online store and the Tesla physical stores.
In 2022, Tesla generated $81.46 billion in revenues. Tesla’s business model primarily relies on automotive sales, $71.46 billion (almost 88% of the total revenues); services/others followed with over $6 billion; energy generation and storage generated over $3 billion in revenues.
Automotive sales are the most critical segment for Tesla, with over $71.4 billion in revenue from automotive parts; most of the gross profits come from automotive sales, with over $20 billion in gross profits, or a 28.5% gross margin.
Tesla doesn’t have an official advertising budget to spend on budget, as it has almost been null over the years. Indeed, Tesla leveraged a combination of Elon musk’s ability to generate significant media coverage and build a product that sold via word of mouth and directly to consumers.
Tesla was profitable in 2022, and it generated $12.55 billion in net profits. Tesla has been profitable since 2020. Indeed, Tesla generated $862 million in net profits in 2020. And it further generated $5.6 billion in net profits in 2021.
Telsa’s profit margins moved from negative 3.15% in 2019 to over 15% in 2022. As Tesla scaled up manufacturing and improved its economies of scale (with new facilities) and scope, the company became extremely profitable by 2022.
Tesla’s profit margin per car in 2022 was $9580, compared to over $6000 in 2021 and over $1700 in 2020.
As Tesla was working toward mass manufacturing in 2020, the company’s profitability per car has increased slightly.
Tesla R&D’s costs have doubled in absolute number, from almost $1.5 billion in 2020 to over $3 billion in 2022. Yet they have decreased as a percentage of revenue, from 5% in 2020 to 4% in 2022. These R&D expenses primarily comprise costs associated with personnel for teams in engineering and research, manufacturing engineering and manufacturing test organizations, prototyping expense, contract, and professional services.
In the peak of 2020 and 2021, Tesla reached a market cap revenue multiple of 21x and 18x, respectively-. This means that Tesla was valued at 21X over its revenues in 2020 and 18X over its revenue in 2021. By the end of 2022, this multiple decreased to 4.7X.
Elon Musk, seen as one of the most visionary tech entrepreneurs from the Silicon Valley scene, started his “career” as an entrepreneur at an early age. After selling his first startup, Zip2, in 1999, he made $22 million, which he used to found X.com, which would later become PayPal, and sell for over a billion to eBay (Musk made $180 million from the deal). He founded other companies like Tesla (he didn’t start it but became a major investor in the early years) and SpaceX. Tesla started as an electric sports car niche player, eventually turned into a mass manufacturing electric car maker.
Elon Musk, an early investor and CEO of Tesla, is the major shareholder with 21.7% of the stocks. Other major shareholders comprise investment firms like Baillie Gifford & Co. (7.7%), FMR LLC (5.3%), Capital Ventures International (5.2%), T. Rowe Price Associates (5.2%), and Capital World Investors (5%). Another major individual shareholder is Larry Ellison (co-founder and CEO of Oracle), with a 1.7% stake.
Founded in 2003 by Eberhard and Tarpenning, eventually, the initial co-founders left the company, and by 2004, Musk first became the main investor. After that, by 2008, he took over as CEO of the company. Tesla would go through many near-death experiences until 2018. And yet, by 2021, Tesla will become a trillion-dollar company.
Tesla is vertically integrated. Therefore, the company runs and operates the Tesla’s plants where cars are manufactured and the Gigafactory, which produces the battery packs and stationary storage systems for its electric vehicles, which are sold via direct channels like the Tesla online store and the Tesla physical stores.
As an electric automaker and builder of sports cars and now trucks, Tesla’s competitors comprise companies like Ford, Mercedes-Benz, Porsche, Lamborghini, Audi, Rivian Lucid Motors, Toyota, and more. At the same time, Tesla is an electric energy production and storage company (SolarCity); it competes with Sunrun, SunPower, and Vivint Solar. And as an autonomous driving company, it competes with companies like Zoox, Waymo, and Baidu with self-driving software.
A real-time insurance business model enables Tesla to build its insurance arm by dynamically adjusting the premiums based on real-time driving behavior. Reduced insurance premiums hooked with the leasing arm enable Tesla to scale its demand side of the business.
By 2022, most of Tesla’s shares are still owned by Elon Musk, among the company’s co-founders and the CEO. Elon Musk is the top individual investor, with a 23.5% stake in the company, equivalent to over 244 million shares. Musk is followed by Lawrence Ellison (founder of Oracle), with a 1.5% company stake. Ellison also sits on Tesla’s board. And Antonio Gracias, among the company’s first investors, has over 1.6 million shares. Other institutional investors and mutual funds like The Vanguard Group (6%), Blackrock (5.1%), and Capital Ventures International also have a good chunk of the company’s stocks.
Bentley is owned by the Porsche family, which also owns the whole Volkswagen Group, through the Porsche Automobil Holding SE. Indeed, the entire group comprises three types of brands: volume, premium, and sport. Bentley is part of the premium segment of the Volkswagen Group, and it generated over €2.84 billion in revenue in 2021, within the overall €250 billion in revenue from the whole Volkswagen Group.
Formerly part of the Volkswagen Group, which owns iconic brands like Lamborghini, Bentley, and Ducati, Bugatti is part of a new joint venture. Indeed, Porsche (the corporation which controls Volkswagen, owned by the Porsche family) still holds a 24% stake in the holding that controls Bugatti. The brand has been spun out from Volkswagen. A majority stake of 55% is now owned by a joint venture called Rimac Group, controlled by Porsche (24%), Hyundai (12%), Mate Rimac (37%), and Other Investors. The Porsche family also holds a further 45% stake in the Bugatti | Rimac joint venture, thus playing the role of key shareholder.
The major shareholder of Volkswagen is Porsche Automobil Holding SE, a company investing in various automakers. This is the holding of the Porsche family, the primary shareholder of Volkswagen, with a 31.4% ownership stake in the company and a 53.3% voting power. Volkswagen is an automaker empire with brands that comprise Audi, Skoda, Seat, Lamborghini, Bugatti, Porsche, Bentley, and Ducati.
Lamborghini is an Italian luxury sports car manufacturer founded in 1963 by manufacturing magnate Ferruccio Lamborghini. Since that time, ownership of the firm has changed several times. Another financial crisis in the late 1990s saw Lamborghini sold to Volkswagen through its subsidiary Audi AG. The subsidiary remains the owner of Lamborghini today. And it’s part of the Volkswagen Group.
Tata Motors is the largest Indian automotive manufacturing company, which also owns the Jaguar Land Rover group. The Tata Family primarily owns Tata through Tata Sons Pvt Limited—a corporation that controls 46.33% of the company.
Range Rover has been part of the Jaguar Land Rover Group, a wholly-owned subsidiary of Tata Motors, since 2008, when Tata acquired the Jaguar Land Rover businesses from Ford Motor Company for $2.3 billion. Thus, Range Rover is owned by Tata Motors, primarily by the Tata family, which controls the company via its holding (Tata Sons Pvt Limited), the largest shareholder, with 46.33% ownership.
Rivian’s main shareholder is Amazon NV Investment Holdings, Amazon’s investment arm, with 18.1% in common stocks, followed by T. Rowe Price Associates with 18.2% and Global Oryx Company with 12.7% ownership. Other significant investors comprise Ford Motor Company, with 11.4% of the company’s ownership. At the same time, major individual investors comprise Robert J. Scaringe, founder, and CEO of Rivian.
Rolls-Royce is part of the BMW Group, a group, which generated over €142 billion in revenue in 2022. Rolls-Royce’s top models comprise the Phantom, Ghost, Wraith/Dawn, Cullinan.
In the provided data, the shareholder ownership of the company is distributed among various entities and individuals.
AQTON SE, Bad Homburg v.d. Höhe holds 9% of the company’s shares.
AQTON GmbH & Co. KG für Automobilwerte, Bad Homburg v.d. Höhe has a 16.6% ownership stake.
Susanne Klatten Beteiligungs GmbH, Bad Homburg v.d. Höhe owns 20.7% of the company’s shares.
Susanne Klatten and Stefan Quandt each hold a 0.2% ownership stake in the company.
Treasury shares account for 0.2% of the company’s shares.
The majority of the company’s shares, 50.7%, are free-floating, meaning they are publicly traded and available for purchase by various investors.
Overall, the data reveals a diverse shareholder structure, with a mix of individual and institutional investors, as well as a significant portion of free-floating shares.
Top shareholders include institutional investors, named executive officers, and sure other beneficial owners. The top five shareholders are BlackRock, Inc., The Vanguard Group, Capital Research Global Investors, Capital World Investors, and Mary T. Barra, who is a named executive officer of the company. BlackRock, Inc. is the largest shareholder with over 117 million shares or 8.1% of outstanding shares, followed closely by The Vanguard Group with over 102 million or 7.0% of outstanding shares. These two asset management companies collectively own a significant portion of the company.
IBM is primarily owned by institutional investors like Vanguard Group (8.86%), BlackRock (8%), and State Street (5.93%). Top individual investors comprise Arvind Krishna, CEO of IBM; senior vice president Michelle H. Browdy; James J. Kavanaugh, responsible for the company’s financial operations, and Alex Gorsky (board member) and Gary Cohn (former vice chairman).
In June 2009, Crysler emerged from bankruptcy proceedings and became owned by the U.S. and Canadian governments, the United Auto Workers (UAW) pension fund, and the Italian holding company FIAT S.p.A. Later FIAT took over a majority stake, thus creating an holding company called FIAT Chrysler Automobiles. In 2021, Fiat Chrysler Automobiles and PSA Group merged to form Stellantis. Therefore, today, Crysler is part of Stellantis, which generated nearly €180 billion in revenue in 2022, with a net profit of €16.78 billion.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
