02 / FINANCIAL MODELING
Interactive DCF: Tesla
A discounted cash flow model is a set of assumptions wearing a valuation. Spreadsheet DCFs hide that; this one makes it physical — the assumptions are sliders, and fair value re-prices as you drag them. The model projects five years of free cash flow to the firm (revenue growth → EBIT margin → NOPAT − reinvestment), adds a Gordon-growth terminal value, and discounts at a CAPM-derived rate. Historical financials are pulled from Tesla's actual filings via Python; the projection math runs live in your browser. I covered the NEV sector as an equity research intern at UBS — Tesla is a deliberate callback to that work.
Assumptions
Fixed inputs from filings and market data: base revenue $94.8B (FY2025), tax rate 15%, net debt $-28.9B, 3.76B shares. Default WACC is CAPM: 4.4% risk-free + β 1.8 × 5% equity risk premium.
Projected FCFF ($B)
Sensitivity — value per share ($)
WACC (rows, centered on your current 13.4%) × terminal growth (columns). Colored relative to your current estimate ($22): blue is higher, red is lower. A half-point of WACC moves the answer more than a year of forecasting — that is the point of the exercise.
| 1.0% | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% | 4.0% | |
|---|---|---|---|---|---|---|---|
| 10.4% | $25 | $25 | $26 | $27 | $28 | $29 | $31 |
| 11.4% | $23 | $24 | $24 | $25 | $26 | $27 | $28 |
| 12.4% | $22 | $22 | $23 | $23 | $24 | $24 | $25 |
| 13.4% | $20 | $21 | $21 | $22 | $22 | $23 | $23 |
| 14.4% | $19 | $20 | $20 | $20 | $21 | $21 | $22 |
| 15.4% | $18 | $19 | $19 | $19 | $20 | $20 | $20 |
| 16.4% | $18 | $18 | $18 | $18 | $19 | $19 | $19 |
The history behind the defaults FY2022–FY2025, from filings
Revenue ($B)
EBIT margin (%)
Free cash flow ($B)
Reading the model honestly
Every scenario — even "priced for perfection" — values Tesla well below its market price, and that is itself the finding: a five-year DCF on trailing fundamentals cannot reach today's price. The market is paying for things outside this model — robotaxi, energy storage, optionality — not for discounted car-business cash flows. The interesting exercise is inverting the question: what do you have to believe for today's price to be fair? Drag revenue growth and EBIT margin until fair value meets price, and you have the market's implied assumptions — then judge whether you believe them. Also watch the "PV of terminal value" tile: when most of the valuation lives in the terminal value, the five-year forecast is doing very little work and the answer is mostly the perpetuity assumptions.