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http://www.sec.gov/Archives/edgar/data/1318605/000119312513327916/d549636d10q.htm 1. Tesla investors believe that when Tesla begins selling mid-priced vehicle ($40,000 range) in about 2017, it will become highly profitable. Assume Tesla plans

http://www.sec.gov/Archives/edgar/data/1318605/000119312513327916/d549636d10q.htm

1. Tesla investors believe that when Tesla begins selling mid-priced vehicle ($40,000 range) in about 2017, it will become highly profitable. Assume Tesla plans to sell between 150,000 and 300,000 mid priced vehicles in 2017. Estimate the amount it will need to invest in plant, property and equipment (fixed assets) to have the capacity to produce the number of vehicles you estimate it will sell. You can find Internet articles on the amounts BMW, General Motors, Audi, Daimler Benz and Nissan have spent on their electric vehicles manufacturing facilities. You can also review the balance sheets of those manufacturers to see the plant, property, and equipment on their balance sheet and you can find on the internet their annual sales. That will let you compute the investment in property, plant and equipment needed to produce one vehicle. Do not use General Motors for this part because its property, plant and equipment amounts are distorted by its recent bankruptcy.

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