In response to questions from certain Tesla investors, and subject to the normal SEC review and comment process of our Form S-4 registration statement, we currently expect that the record date for the determination of Tesla stockholders entitled to receive notice of, and to vote at, the Tesla special stockholders meeting in connection with the SolarCity acquisition will be sometime during the week of September 19, 2016.
We published a customer-focused blog post announcing our new captive finance company, Tesla Finance LLC, and its initial product offering, a leasing program for small and medium sized businesses. Here is further information for investors and analysts about this announcement.
What is Tesla’s strategy in starting Tesla Finance? – We believe that a captive finance company is a natural extension of our strategy to offer great customer experience, including financing products important to customers. Consistent with this, Tesla Finance will offer a financing product that customers have been requesting but that has not available from our bank financing partners: a true leasing product intended for businesses. This will round-out the portfolio of financing options available to Tesla customers. This leasing program will be offered alongside traditional installment loan programs currently offered by our bank partners.
How will this program affect Tesla’s capital structure? – The leasing program is targeted just at small/medium-sized businesses and their owners, so volume is expected to be somewhat limited.
The leases will be funded with a combination of equity and a warehouse financing facility that will be announced shortly. Given Tesla’s solid cash position, strong cash flow from operations and the poor returns available on cash equivalents today, it makes sense for Tesla to use a portion of this cash to support growth by creating Tesla Finance now.
Should the program grow, it would be reasonable that additional layers of warehouse facilities would be added and eventually replaced with private and/or public asset-backed securitization transactions commonly utilized in the industry. Tesla has established the legal structures to support securitization transactions, but that approach is volume driven and not necessary until we begin to deploy Tesla’s capital to support the Gigafactory and Gen III initiatives in earnest.
How will Tesla account for the leased vehicles and how does that compare with other car companies? - Within the automotive industry, automakers typically sell their vehicles through a franchised dealer network in which sales to the independent dealers represent a full sale for GAAP purposes. Later, a portion of these same vehicles may be financed by the automakers’ financing affiliates where they also record the related leasing revenue. Since Tesla sells directly to customers, we cannot recognize full sales revenue for vehicles delivered under our captive leasing program. Therefore, we will not adjust our financials (GAAP or non-GAAP) to show leased vehicles as sold vehicles like we do for the Resale Value Guarantee program in our non-GAAP financials.
What info will Tesla disclose on these transactions? - To facilitate comparability with other automakers, we will include a supplemental quarterly and YTD table that summarizes the aggregate price of vehicles leased by Tesla. This should allow investors to evaluate the velocity of our vehicle business.
How will gross margins be impacted by the program? - There will be no material impact to our gross margin in either GAAP or non-GAAP financials.
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Tesla has never declared dividends on our common stock. We intend on retaining all future earnings to finance future growth and therefore, do not anticipate paying any cash dividends in the foreseeable future.
Stock certificates are not practical or cost effective for the shareholder or for Tesla. For pricing please contact Tesla' s transfer agent at:
Computershare Trust Company, N.A.
250 Royall Street
Canton, MA 02021
Tesla Motor's fiscal year is based on the calendar year. The last day of the fiscal year is Dec 31.
At times, third-parties who are unaffiliated with Tesla have approached our actual and potential customers, seeking to present themselves as representing Tesla and offering a deal on the purchase of Tesla or other companies’ securities. This recently happened with the Nankai Group, but other groups have done this as well.
Tesla has no affiliation with companies who do this. Please be advised that these activities have no connection with Tesla whatsoever, and we caution you against concluding an agreement with any such company.
Tesla's initial public offering was on June 29, 2010. The IPO was priced at $17 per share.
Tesla was incorporated July 1, 2003.
We receive a large number of requests for information in connection with student projects, and unfortunately are not able to respond to each one individually. This web site, however, contains answers to many of the most commonly asked questions about Tesla, our employees, the work that is done here. Additional information may be obtained by reading our SEC filings.
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