January 24, 2017 NASDAQ: TSLA

TESLA MOTORS INC BUY A+

A

A-

HOLD

B+

B

Annual Dividend Rate NA

B-

C+

C

Annual Dividend Yield NA

SELL C-

D+

D

Beta 1.28

STOCK PERFORMANCE (%) 3 Mo. Price Change 24.40

1 Yr. 22.89

3 Yr (Ann) 11.10

Last Qtr 145.35 109.51 107.86

12 Mo. 56.53 -29.30 -22.78

3 Yr CAGR 51.52 NA NA

RETURN ON EQUITY (%) TSLA Q3 2016 -32.46 Q3 2015 -49.66 Q3 2014 -21.15

Ind Avg 5.46 -3.48 4.12

S&P 500 12.00 12.28 14.59

E+

E

E-

F

Market Capitalization $40.1 Billion

Sector: Consumer Goods & Svcs TSLA BUSINESS DESCRIPTION Tesla Motors, Inc. designs, develops, manufactures, and sells electric vehicles and stationary energy storage products in the United States, China, Norway, and internationally. It primarily offers sedans and sport utility vehicles.

D-

Weekly Price: (US$)

HOLD 52-Week Range $141.05-$269.34

Sub-Industry: Automobile Manufacturers SMA (50)

RATING SINCE

SMA (100)

01/24/2017

Price as of 1/23/2017 $248.92

Source: S&P 1 Year

2 Years 275 250 225 200 175

GROWTH (%) Revenues Net Income EPS

150 Rating History

SELL

HOLD

SELL

Volume in Millions

60 40 20

2015

2016

2017

0

COMPUSTAT for Price and Volume, TheStreet Ratings, Inc. for Rating History

P/E COMPARISON RECOMMENDATION We rate TESLA MOTORS INC (TSLA) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and increase in net income. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet. n/m

9.92

25.43

TSLA

Ind Avg

S&P 500

HIGHLIGHTS TSLA's very impressive revenue growth greatly exceeded the industry average of 10.8%. Since the same quarter one year prior, revenues leaped by 145.3%. Growth in the company's revenue appears to have helped boost the earnings per share.

2015

Q3 0.14

Q2 -2.09

Q1 -2.13

Q4 -2.44

Q3 -1.78

Q2 -1.45

Q1 -1.22

Q3 -0.60

2014

Q4 -0.86

Q1 -0.40

Q2 -0.50

EPS ANALYSIS¹ ($)

2016

NA = not available NM = not meaningful 1 Compustat fiscal year convention is used for all fundamental data items.

Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock. TESLA MOTORS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, TESLA MOTORS INC reported poor results of -$6.89 versus -$2.36 in the prior year. This year, the market expects an improvement in earnings (-$2.15 versus -$6.89). Even though the current debt-to-equity ratio is 1.00, it is still below the industry average, suggesting that this level of debt is acceptable within the Automobiles industry. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.84 is weak. The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Automobiles industry and the overall market, TESLA MOTORS INC's return on equity significantly trails that of both the industry average and the S&P 500.

This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2016. All rights reserved.

Report Date: January 24, 2017

PAGE 1

January 24, 2017 NASDAQ: TSLA

TESLA MOTORS INC Sector: Consumer Goods & Svcs Automobile Manufacturers Source: S&P Annual Dividend Rate NA

Annual Dividend Yield NA

PEER GROUP ANALYSIS

Market Capitalization $40.1 Billion

52-Week Range $141.05-$269.34

Price as of 1/23/2017 $248.92

INDUSTRY ANALYSIS

100%

REVENUE GROWTH AND EBITDA MARGIN*

RACE FA RA VO BL E

TSLA

The automobile industry is comprised of companies that design, manufacture, engineer, assemble and market automobiles and motorcycles as well as provide leasing and financial services. Industry performance is closely linked with overall economic performance. Major players include General Motors (GM), Ford Motor Company (F) and Chrysler. This group is commonly referred to as Detroit’s big three. BMW, Daimler, Honda (HMC), Hyundai, Mazda, Nissan, Subaru, Toyota (TM) and Harley-Davidson (HOG) are other prominent players. There are also niche players such as Winnebago Industries (WGO) for motor- homes and Tesla Motors (TSLA) for high-end electric cars. Moderating oil prices have not shifted demand back to heavy SUVs and other trucks as more fuel-efficient options are now available. This change in consumer preferences has supported German, Japanese and Korean manufacturers, whose market share has consequently expanded. The big three are trying to adapt their product lines to changing preferences.

THO

UN

B RA VO

TM HMC FCAUGM HOG WGO LE

0%

FA

Revenue Growth (TTM)

Beta 1.28

5%F

35%

Huge health care and fringe benefits provided to big three employees give foreign competitors a strong advantage. All three are negotiating new labor contracts with the United Auto Workers (UAW) union. With these on-going negotiations, the big three hope to reduce the profit-per-vehicle gap. Reduced sales, different platforms for parts, high raw material costs and tough exchange rates are other hurdles facing the industry.

EBITDA Margin (TTM) Companies with higher EBITDA margins and revenue growth rates are outperforming companies with lower EBITDA margins and revenue growth rates. Companies for this scatter plot have a market capitalization between $971.2 Million and $193 Billion. Companies with NA or NM values do not appear. *EBITDA – Earnings Before Interest, Taxes, Depreciation and Amortization.

100%

REVENUE GROWTH AND EARNINGS YIELD

Consumer choice in vehicles is more than ever being influenced by fuel efficiency. Automakers are exploring alternate fuels such as ethanol and electric fuel cells and are delivering hybrid gasoline-electric vehicles and pure-electric car for sale. The new cars are lighter, provide better fuel efficiency, enhanced safety features, and many come with tax credits from the government to make costs competitive. Having an auto industry is considered to be in the strategic interest of America and was bailed-out to help it survive the Great Recession.Manufacturers have recognized growing demand from developing economies and the opportunity to increase auto parts sourcing from these economies.

RACE FA

PEER GROUP: Automobiles

RA VO BL E

TSLA

THO

UN FA B RA VO

TM

0%

HMC

LE

Revenue Growth (TTM)

US congress toughened the Corporate Average Fuel Economy (CAFE) regulations that no longer grant exemptions to light trucks classified as SUVs or passenger vans unless they exceed 10,000 lbs. In the near future, the standard is to be modified to accommodate many larger vehicles.

-5%

WGO

FCAU HOG

F

GM25%

Earnings Yield (TTM)

Ticker TSLA WGO GM HMC THO F TM FCAU RACE HOG

Recent Company Name Price ($) TESLA MOTORS INC 248.92 WINNEBAGO INDUSTRIES 30.75 GENERAL MOTORS CO 36.65 HONDA MOTOR CO LTD 30.36 THOR INDUSTRIES INC 98.43 FORD MOTOR CO 12.31 TOYOTA MOTOR CORP 118.29 FIAT CHRYSLER AUTOMOBILES NV 10.28 FERRARI NV 61.08 HARLEY-DAVIDSON INC 59.26

Market Cap ($M) 40,098 971 55,867 54,995 5,176 48,044 192,990 13,250 11,539 10,476

Price/ Earnings NM 17.18 4.20 13.93 18.13 6.80 9.47 8.71 30.85 15.72

Net Sales TTM ($M) 5,929.88 1,006.31 162,083.00 135,275.05 5,260.29 153,397.00 264,180.00 120,840.39 3,295.03 6,066.49

Net Income TTM ($M) -873.97 48.68 13,858.00 3,921.52 284.77 7,247.00 19,420.00 1,823.21 375.27 687.18

The peer group comparison is based on Major Automobile Manufacturers companies of comparable size.

Companies that exhibit both a high earnings yield and high revenue growth are generally more attractive than companies with low revenue growth and low earnings yield. Companies for this scatter plot have revenue growth rates between 0.9% and 95.2%. Companies with NA or NM values do not appear.

This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2016. All rights reserved.

Report Date: January 24, 2017

PAGE 2

January 24, 2017 NASDAQ: TSLA

TESLA MOTORS INC Sector: Consumer Goods & Svcs Automobile Manufacturers Source: S&P Annual Dividend Rate NA

Annual Dividend Yield NA

COMPANY DESCRIPTION Tesla Motors, Inc. designs, develops, manufactures, and sells electric vehicles and stationary energy storage products in the United States, China, Norway, and internationally. It primarily offers sedans and sport utility vehicles. The company also offers electric vehicle powertrain components and systems to other manufacturers. It sells its products through a network of Tesla stores and galleries, as well as through Internet. In addition, the company designs, manufactures, installs, monitors, maintains, leases, and sells solar energy systems to government, residential, and commercial customers; and sells electricity generated by solar energy systems to customers. Tesla Motors, Inc. was founded in 2003 and is headquartered in Palo Alto, California. TESLA MOTORS INC 3500 Deer Creek Road Palo Alto, CA 94304 USA Phone: 650-681-5000 Fax: 650-681-5101 http://www.tesla.com

Beta 1.28

Market Capitalization $40.1 Billion

52-Week Range $141.05-$269.34

Price as of 1/23/2017 $248.92

STOCK-AT-A-GLANCE Below is a summary of the major fundamental and technical factors we consider when determining our overall recommendation of TSLA shares. It is provided in order to give you a deeper understanding of our rating methodology as well as to paint a more complete picture of a stock's strengths and weaknesses. It is important to note, however, that these factors only tell part of the story. To gain an even more comprehensive understanding of our stance on the stock, these factors must be assessed in combination with the stock’s valuation. Please refer to our Valuation section on page 5 for further information. FACTOR

SCORE

2.0

Growth out of 5 stars weak Measures the growth of both the company's income statement and cash flow. On this factor, TSLA has a growth score better than 30% of the stocks we rate.

strong

4.0

Total Return out of 5 stars weak Measures the historical price movement of the stock. The stock performance of this company has beaten 70% of the companies we cover.

strong

1.0

Efficiency out of 5 stars weak Measures the strength and historic growth of a company's return on invested capital. The company has generated more income per dollar of capital than 10% of the companies we review.

strong

3.5

Price volatility out of 5 stars weak Measures the volatility of the company's stock price historically. The stock is less volatile than 60% of the stocks we monitor.

strong

2.5

Solvency out of 5 stars weak Measures the solvency of the company based on several ratios. The company is more solvent than 40% of the companies we analyze.

strong

0.5

Income out of 5 stars weak Measures dividend yield and payouts to shareholders. This company pays no dividends.

strong

THESTREET RATINGS RESEARCH METHODOLOGY TheStreet Ratings' stock model projects a stock's total return potential over a 12-month period including both price appreciation and dividends. Our Buy, Hold or Sell ratings designate how we expect these stocks to perform against a general benchmark of the equities market and interest rates. While our model is quantitative, it utilizes both subjective and objective elements. For instance, subjective elements include expected equities market returns, future interest rates, implied industry outlook and forecasted company earnings. Objective elements include volatility of past operating revenues, financial strength, and company cash flows. Our model gauges the relationship between risk and reward in several ways, including: the pricing drawdown as compared to potential profit volatility, i.e.how much one is willing to risk in order to earn profits; the level of acceptable volatility for highly performing stocks; the current valuation as compared to projected earnings growth; and the financial strength of the underlying company as compared to its stock's valuation as compared to projected earnings growth; and the financial strength of the underlying company as compared to its stock's performance. These and many more derived observations are then combined, ranked, weighted, and scenario-tested to create a more complete analysis. The result is a systematic and disciplined method of selecting stocks.

This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2016. All rights reserved.

Report Date: January 24, 2017

PAGE 3

January 24, 2017 NASDAQ: TSLA

TESLA MOTORS INC Sector: Consumer Goods & Svcs Automobile Manufacturers Source: S&P Annual Dividend Rate NA

Annual Dividend Yield NA

Consensus EPS Estimates² ($) IBES consensus estimates are provided by Thomson Financial

0.06

Q4 FY16

-2.15 E

-0.24 E

2016(E)

2017(E)

Market Capitalization $40.1 Billion

52-Week Range $141.05-$269.34

Price as of 1/23/2017 $248.92

FINANCIAL ANALYSIS TESLA MOTORS INC's gross profit margin for the third quarter of its fiscal year 2016 has increased when compared to the same period a year ago. The company grew its sales and net income significantly quarter versus same quarter a year prior, and was able to outpace the average competitor in the industry when comparing revenue growth, but not when comparing net income growth. TESLA MOTORS INC has weak liquidity. Currently, the Quick Ratio is 0.84 which shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow. At the same time, stockholders' equity ("net worth") has greatly increased by 97.80% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future. STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. To learn more visit www.TheStreetRatings.com.

INCOME STATEMENT Net Sales ($mil) EBITDA ($mil) EBIT ($mil) Net Income ($mil)

Beta 1.28

Q3 FY16 2,298.44 366.09 85.62 21.88

Q3 FY15 936.79 -73.30 -183.66 -229.86

Q3 FY16 3,107.97 12,592.40 2,704.19 2,691.76

Q3 FY15 1,451.26 7,547.50 2,633.20 1,360.84

Q3 FY16 39.91% 15.92% 3.73% 0.47 -6.94% -32.46%

Q3 FY15 36.49% -7.82% -19.61% 0.50 -8.95% -49.66%

Q3 FY16 1.27 0.50 58.11 1.47

Q3 FY15 1.17 0.66 41.11 -4.47

Q3 FY16 150 0.00 0.14 17.97 NA 4,799,416

Q3 FY15 131 0.00 -1.78 10.40 NA 3,207,593

BALANCE SHEET Cash & Equiv. ($mil) Total Assets ($mil) Total Debt ($mil) Equity ($mil) PROFITABILITY Gross Profit Margin EBITDA Margin Operating Margin Sales Turnover Return on Assets Return on Equity DEBT Current Ratio Debt/Capital Interest Expense Interest Coverage SHARE DATA Shares outstanding (mil) Div / share EPS Book value / share Institutional Own % Avg Daily Volume

2 Sum of quarterly figures may not match annual estimates due to use of median consensus estimates.

This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2016. All rights reserved.

Report Date: January 24, 2017

PAGE 4

January 24, 2017 NASDAQ: TSLA

TESLA MOTORS INC Sector: Consumer Goods & Svcs Automobile Manufacturers Source: S&P Annual Dividend Rate NA

Annual Dividend Yield NA

RATINGS HISTORY Our rating for TESLA MOTORS INC was upgraded from Sell to Hold today. As of 1/23/2017, the stock was trading at a price of $248.92 which is 7.6% below its 52-week high of $269.34 and 76.5% above its 52-week low of $141.05.

HOLD: $248.92

SELL: $196.94

HOLD: $236.80

SELL: $201.29

2 Year Chart

$300 $250 $200

2015

2016

MOST RECENT RATINGS CHANGES Date Price Action 1/23/17 $248.92 Upgrade 2/1/16 $196.94 Downgrade 5/7/15 $236.80 Upgrade 1/23/15 $201.29 No Change

From Sell Hold Sell Sell

To Hold Sell Hold Sell

Price reflects the closing price as of the date listed, if available

RATINGS DEFINITIONS & DISTRIBUTION OF THESTREET RATINGS (as of 1/23/2017)

41.51% Buy - We believe that this stock has the opportunity to appreciate and produce a total return of more than 10% over the next 12 months. 30.77% Hold - We do not believe this stock offers conclusive evidence to warrant the purchase or sale of shares at this time and that its likelihood of positive total return is roughly in balance with the risk of loss. 27.72% Sell - We believe that this stock is likely to decline by more than 10% over the next 12 months, with the risk involved too great to compensate for any possible returns.

TheStreet Ratings 14 Wall Street, 15th Floor New York, NY 10005 www.thestreet.com Research Contact: 212-321-5381 Sales Contact: 866-321-8726

Beta 1.28

Market Capitalization $40.1 Billion

52-Week Range $141.05-$269.34

Price as of 1/23/2017 $248.92

VALUATION HOLD. This stock’s P/E ratio is negative, making its value useless in the assessment of premium or discount valuation, only displaying that the company has negative earnings per share. For additional comparison, its price-to-book ratio of 13.86 indicates a significant premium versus the S&P 500 average of 2.83 and a significant premium versus the industry average of 3.53. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, TESLA MOTORS INC seems to be trading at a premium to investment alternatives within the industry. Price/Earnings

1

2

3

premium

4

5

TSLA NM Peers 9.92 • Neutral. The absence of a valid P/E ratio happens when a stock can not be valued on the basis of a negative stream of earnings. • TSLA's P/E is negative making this valuation measure meaningless. Price/Projected Earnings

1

2

3

premium

4

5

1

2

3

premium

4

5

Price/Sales

1

2

premium

3

4

5

Price to Earnings/Growth

4

5

discount

1

2

3

premium

4

5

discount

TSLA NA Peers 1.46 • Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples. • Ratio not available. Earnings Growth

1

2

3

4

lower

5 higher

TSLA -22.78 Peers 71.54 • Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios. • However, TSLA is expected to significantly trail its peers on the basis of its earnings growth rate. Sales Growth

discount

TSLA 6.29 Peers 1.16 • Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales. • TSLA is trading at a significant premium to its industry.

3

TSLA 127.45 Peers 15.55 • Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures. • TSLA is trading at a significant premium to its peers.

discount

TSLA 13.86 Peers 3.53 • Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet. • TSLA is trading at a significant premium to its peers.

2

premium

discount

TSLA NM Peers 10.45 • Neutral. The absence of a valid price-to-projected earnings ratio happens when a stock can not be valued on the basis of a negative expected future earnings. • TSLA's ratio is negative making this valuation measure meaningless. Price/Book

1

Price/CashFlow

discount

1

2

3

lower

4

5 higher

TSLA 56.53 Peers 17.88 • Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share. • TSLA has a sales growth rate that significantly exceeds its peers.

DISCLAIMER: The opinions and information contained herein have been obtained or derived from sources believed to be reliable, but TheStreet Ratings cannot guarantee its accuracy and completeness, and that of the opinions based thereon. Data is provided via the COMPUSTAT® Xpressfeed product from Standard &Poor's, a division of The McGraw-Hill Companies, Inc., as well as other third-party data providers. TheStreet Ratings is a division of TheStreet, Inc., which is a publisher. This research report contains opinions and is provided for informational purposes only. You should not rely solely upon the research herein for purposes of transacting securities or other investments, and you are encouraged to conduct your own research and due diligence, and to seek the advice of a qualified securities professional, before you make any investment. None of the information contained in this report constitutes, or is intended to constitute a recommendation by TheStreet Ratings of any particular security or trading strategy or a determination by TheStreet Ratings that any security or trading strategy is suitable for any specific person. To the extent any of the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person. Your use of this report is governed by TheStreet, Inc.'s Terms of Use found at http://www.thestreet.com/static/about/terms-of-use.html.

This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2016. All rights reserved.

Report Date: January 24, 2017

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