Deal Lab · Buyout model 1.0
Tesla, Inc. Buyout Model
A buyout of Tesla, Inc. on its published figures for the last 4 quarters to Q3 FY2026, in US dollars: revenue flat, the margin and the shares of revenue of that period, entry and exit at 10.0x EBITDA, exit after 5 years.
Returns
Internal rate of return
−11.1%
Multiple of money
0.56x
Sponsor's equity
$59.2bn
Enterprise value
$109bn
Proceeds at exit
$32.9bn
Sources and Uses
| Uses | Amount |
|---|---|
| Equity price | $137bn |
| Borrowings refinanced | $9.5bn |
| Transaction costs | $2.2bn |
| Financing fees | $952m |
| Minimum cash | $2.1bn |
| Uses | $152bn |
| Sources | Amount |
|---|---|
| Senior loan | $35.7bn |
| Subordinated notes | $11.9bn |
| Cash of the company | $45.4bn |
| Sponsor's equity | $59.2bn |
| Sources | $152bn |
Projection
| Closing | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|---|
| Revenue | $104bn | $104bn | $104bn | $104bn | $104bn | $104bn |
| EBITDA of the case | $10.9bn | $10.9bn | $10.9bn | $10.9bn | $10.9bn | $10.9bn |
| Cash cost of leases | $1.8bn | $1.8bn | $1.8bn | $1.8bn | $1.8bn | $1.8bn |
| Depreciation and amortisation | $5.7bn | $5.7bn | $5.7bn | $5.7bn | $5.7bn | |
| Capital expenditure | $9.5bn | $9.5bn | $9.5bn | $9.5bn | $9.5bn | |
| Increase in working capital | $0 | $0 | $0 | $0 | $0 | |
| Interest | $3.8bn | $4.1bn | $4.4bn | $4.5bn | $4.5bn | |
| Tax | $0 | $0 | $0 | $0 | $0 | |
| Cash available for debt service | −$388m | −$388m | −$388m | −$388m | −$388m |
Debt Schedule
| Closing | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|---|
| Senior loan | $35.7bn | $35.3bn | $35.0bn | $34.6bn | $34.3bn | $33.9bn |
| Subordinated notes | $11.9bn | $11.9bn | $11.9bn | $11.9bn | $11.9bn | $11.9bn |
| Revolving facility | $0 | $4.6bn | $9.4bn | $10.9bn | $10.9bn | $10.9bn |
| Cash | $2.1bn | $2.1bn | $2.1bn | −$1.6bn | −$6.8bn | −$12.0bn |
| Debt to EBITDA | 5.00x | 5.38x | 5.80x | 5.90x | 5.87x | 5.84x |
| EBITDA to interest | 2.86x | 2.66x | 2.48x | 2.43x | 2.45x |
Covenants and the Credit View
| Closing | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|---|
| Limit of debt to EBITDA | 6.50x | |||||
| Lease-adjusted debt to EBITDA | 5.00x | 5.38x | 5.80x | 5.90x | 5.87x | 5.84x |
| Band of debt to EBITDA | Highly leveraged | Highly leveraged | Highly leveraged | Highly leveraged | Highly leveraged | Highly leveraged |
Return Bridge
| Amount | |
|---|---|
| Sponsor's equity | $59.2bn |
| EBITDA growth | $0 |
| Change of multiple | $0 |
| Net debt repaid | −$23.2bn |
| Non-controlling interests | $0 |
| Costs at closing | −$3.1bn |
| Management and limited liability | $0 |
| Proceeds at exit | $32.9bn |
Sensitivity Tables
| Entry by exit | 8.00x | 9.00x | 10.0x | 11.0x | 12.0x |
|---|---|---|---|---|---|
| 8.00x | −18.4% | −8.5% | −1.6% | 3.7% | 8.1% |
| 9.00x | −25.5% | −14.5% | −7.3% | −1.8% | 2.6% |
| 10.0x | −28.5% | −18.0% | −11.1% | −5.9% | −1.6% |
| 11.0x | −30.9% | −20.8% | −14.1% | −9.0% | −4.9% |
| 12.0x | −32.9% | −23.1% | −16.6% | −11.7% | −7.7% |
| Debt by growth | −4.0% | −2.0% | 0.0% | 2.0% | 4.0% |
|---|---|---|---|---|---|
| 4.00x | −16.3% | −11.5% | −7.2% | −3.4% | 0.2% |
| 4.50x | −20.1% | −14.0% | −8.9% | −4.4% | −0.4% |
| 5.00x | −25.7% | −17.4% | −11.1% | −5.8% | −1.2% |
| 5.50x | −36.3% | −22.5% | −14.1% | −7.6% | −2.2% |
| 6.00x | −100% | −31.5% | −18.4% | −10.1% | −3.6% |
Solvers
Highest entry multiple for a return of 20.0%
n/a
No entry multiple reaches the target
Revenue growth a year for a return of 20.0%
16.0%
The target return
Debt capacity at closing, times EBITDA
n/a
The covenants fail without new debt
Assumptions and Their Origins
| Group | Assumption | Value | Origin |
|---|---|---|---|
| Transaction | Entry multiple | 10.0x | Convention of buyout 1.0 |
| Transaction | Years to exit | 5 years | Convention of buyout 1.0 |
| Transaction | Transaction costs | 2.0% | Convention of buyout 1.0 |
| Transaction | Financing fees | 2.0% | Convention of buyout 1.0 |
| Transaction | Minimum cash, of revenue | 2.0% | Convention of buyout 1.0 |
| Financing | Debt at closing, times EBITDA | 5.00x | Convention of buyout 1.0 |
| Financing | Debt at most, of the enterprise value | 60.0% | Convention of buyout 1.0 |
| Financing | Senior loan, of the new debt | 75.0% | Convention of buyout 1.0 |
| Financing | Senior loan repaid each year | 1.0% | Convention of buyout 1.0 |
| Financing | Cash sweep | 100% | Convention of buyout 1.0 |
| Financing | Revolving facility, times EBITDA | 1.00x | Convention of buyout 1.0 |
| Financing | Base rate | 3.9% | Policy rate of the United States, BIS central bank policy rates, 20 October 2026 |
| Financing | Senior loan spread | 3.5% | Convention of buyout 1.0 |
| Financing | Subordinated notes spread | 6.0% | Convention of buyout 1.0 |
| Financing | Revolving facility spread | 3.0% | Convention of buyout 1.0 |
| Financing | Covenant headroom on debt to EBITDA | 30.0% | Convention of buyout 1.0 |
| Financing | Minimum EBITDA to interest | 2.00x | Convention of buyout 1.0 |
| Operations | Revenue growth a year | 0.0% | Convention of buyout 1.0 |
| Operations | EBITDA margin | 10.5% | EBITDA over revenue, last 4 quarters to FY2026 Q3 |
| Operations | Cash cost of leases, of revenue | 1.7% | Cash cost of leases over revenue, last 4 quarters to FY2026 Q3 |
| Operations | Depreciation and amortisation, of revenue | 5.5% | Depreciation and amortisation over revenue, last 4 quarters to FY2026 Q3 |
| Operations | Capital expenditure, of revenue | 9.2% | Median capital expenditure over revenue, fiscal 2023 to 2025 |
| Operations | Working capital, of revenue | 1.4% | Working capital over revenue, end of the last 4 quarters to FY2026 Q3 |
| Operations | Leases as debt | Yes | Leases as debt, the basis of the credit metrics |
| Operations | Share-based pay added back | No | Convention of buyout 1.0 |
| Taxes | Tax rate | 25.5% | Combined statutory rate of corporate income tax of the United States, OECD Corporate Tax Statistics, 2026 |
| Taxes | Interest deducted up to 30% of EBITDA | No | Convention of buyout 1.0 |
| Exit | Exit multiple | 10.0x | Convention of buyout 1.0 |
| Exit | Management share of the proceeds | 0.0% | Convention of buyout 1.0 |
| Exit | Target return | 20.0% | Convention of buyout 1.0 |
Inputs and Their Documents
Published figures of the last 4 quarters to Q3 FY2026, each with the documents it comes from.
| Input | Value | Method | Documents |
|---|---|---|---|
| Adjusted EBITDA | $15.2bn est. | Adjusted EBITDA of the company page | 10-K 2025-12, 10-Q 2025-09, 10-Q 2026-03, 10-Q 2026-06, 10-Q 2026-09 |
| Share-based pay | $4.3bn | Share-based pay that adjusted EBITDA adds back | 10-K 2025-12, 10-Q 2025-09, 10-Q 2026-03, 10-Q 2026-06, 10-Q 2026-09 |
| EBITDA after share-based pay | $10.9bn est. | Adjusted EBITDA less share-based pay | 10-K 2025-12, 10-Q 2025-09, 10-Q 2026-03, 10-Q 2026-06, 10-Q 2026-09 |
| Depreciation and amortisation | $5.7bn | Depreciation and amortisation of adjusted EBITDA | 10-K 2025-12, 10-Q 2025-09, 10-Q 2026-03, 10-Q 2026-06, 10-Q 2026-09 |
| Revenue | $104bn | Revenue of the base period | 10-K 2025-12, 10-Q 2025-09, 10-Q 2026-03, 10-Q 2026-06, 10-Q 2026-09 |
| Operating lease cost | $1.8bn est. | Operating lease cost | 10-K 2025-12 |
| Borrowings | $9.5bn | Total debt less lease liabilities | 10-Q 2026-09 |
| Lease liabilities | $6.9bn | Lease liabilities | 10-Q 2026-09 |
| Cash and short-term investments | $45.4bn | Cash and short-term investments | 10-Q 2026-09 |
| Non-controlling interests | $546m | Non-controlling interests | 10-Q 2026-09 |
| Receivables | $4.6bn | Receivables | 10-Q 2026-09 |
| Payables | $17.2bn | Payables | 10-Q 2026-09 |
| Inventories | $14.1bn | Inventories | 10-Q 2026-09 |
| Capital expenditure | $8.5bn | Capital expenditure of the latest fiscal year | 10-K 2025-12 |
Checks of the Model
- Sources equal uses
- The equity price is above nil
- The sponsor's equity is above nil
- Each balance of debt stays between nil and its amount at closing
- Cash is the cash of the year before and the cash flow of the year
- Cash stays at the minimum unless a shortfall is stated
- The 6 parts of the bridge add up to the proceeds less the sponsor's equity
- The cash flows at the internal rate of return have a present value of nil
Deal Lab computes arithmetic on published figures and on the assumptions of the user. It values no company, recommends no transaction and forecasts no result.