$1.$ Executive SummaryThis presentation outlines the project cost estimations for a selected project related to Tesla, which involves launching a new electric vehicle model. The cost estimation process incorporates planned activities, identifies cost structure by type, estimates a contingency reserve, and discusses funding sources. Teslas innovative approach and advanced technology development, coupled with a need to manage cost risks effectively, form the foundation for this analysis$\mathrm{.}2.$ Cost Estimations of Planned ActivitiesThe project involves several key activities:Design and Engineering: Development of the vehicle prototype, extensive testing, and iteration.Cost Estimate: $$50$ millionManufacturing Setup: Building and upgrading manufacturing facilities, procuring machinery, and automation systems.Cost Estimate: $$200$ millionSupply Chain and Procurement: Sourcing raw materials like lithium$-$ion batteries, electronic components, and sustainable materials.Cost Estimate: $$100$ millionMarketing and Promotion: Pre$-$launch campaigns, product demonstrations, and public relations efforts.Cost Estimate: $$20$ millionSales Infrastructure Setup: Developing dealerships, online platforms, and mobile service teams.Cost Estimate: $$30$ millionHuman Resources and Operations: Recruiting and onboarding new employees, training programs, and operations.Cost Estimate: $$10$ million$3.$ Approaches for Cost EstimationFor the project cost estimations, a top$-$down approach was used, alongside parametric and analogous estimation methods:Analogous Estimation: Drawing insights from previous Tesla vehicle launches such as Model Y and Cybertruck. For example, the manufacturing cost for a similar EV project was $$180$ million, which guided our $$200$ million estimate.Parametric Estimation: This involves estimating costs based on certain parameters. For instance, battery costs were estimated using current market rates of $$120$ per kWh$,$ with each vehicle needing around $75$ kWh$,$ resulting in $$9,000$ per battery pack.Bottom$-$up Estimation: Used for specific categories like HR and operations, where costs are calculated from smaller, detailed activity units, like recruitment drives and training sessions$\mathrm{.}4.$ Cost Structure by TypesFixed Costs: These include capital expenditures for factory setup, machinery, and automation.Total Fixed Costs: $$220$ millionVariable Costs: Costs that vary depending on production volume, such as raw materials and components.Total Variable Costs: $$100$ millionIndirect Costs: These include administration, legal fees, and operations overhead.Total Indirect Costs: $$10$ million$5.$ Estimation of Contingency ReserveA contingency reserve of $10\%$ of the total project cost is included to address potential risks such as delays in supply chain procurement, material price fluctuations, or unforeseen regulatory requirements.Contingency Reserve: $10\%$ of $$410$ million $=$ $$41$ millionThe contingency reserve is crucial as it provides a buffer to manage uncertainties in the project without halting operations or exceeding budget constraints$\mathrm{.}6.$ Estimation of Funding SourcesTesla will primarily fund this project through:Internal Funding: Teslas retained earnings from previous profitable quarters will contribute significantly to the funding of this project.Equity Raising: Tesla may also raise additional funds by offering new equity to investors, leveraging its strong brand value and promising financial outlook.Debt Financing: To cover capital expenditures for manufacturing setup, Tesla could explore low$-$interest loans or bonds, taking advantage of current favorable credit markets.Government Incentives: Tesla can benefit from grants and incentives for green energy projects, especially for the procurement of lithium$-$ion batteries and sustainable materials.This presentation highlights the importance of precise cost estimation and proactive budgeting for ensuring project succes. Where did we get these numbers from. I need a link to site to verify this information.