Additionally, Nissan has the #4-selling electric car, and Chevy has the #2.
I think you are overstating your case.
Tesla Model 3 is the best selling BEV in every market it participates in (not sure about numbers compared to PHEVs). It is selling in comparable quantities to ICE vehicles in the same price range.
A significant number of people buying Model 3 are upgrading from cars costing half the price.
There is little to no indication that EV adoption will slow down (before pointing to a drop in Model 3 sales in the USA consider that the one factory supplies the entire world outside China).
No, that's incorrect.
The Model 3 is the second best seller in France: https://ev-sales.blogspot.com/2019/12/france-november-2019.h...
It's the third best seller in Germany: https://ev-sales.blogspot.com/2019/12/germany-november-2019....
And it's the 9th best selling BEV in China: https://ev-sales.blogspot.com/2019/12/china-november-2019-up...
Europe-wide, Tesla Model 3 is top of the charts by a wide margin. The articles you linked mentioned this, France and Germany are behind because the vast demand for Tesla in Netherlands and Norway is sucking all the supply up before France and Germany get a seat at the table.
As Fremont production improves and the German Tesla factory opens, we’ll see that lead grow as Europeans switch to BEVs en masse to escape the cheating ICE manufacturers.
By February the factory should be working close to its capacity, let’s see what sales are like once Tesla is actually participating in that market.
Let’s see what News February brings shall we?
5300 seems quite low given China’s size compared to, say, Australia. No doubt you will claim it is demand constrained, but that number looks like one boatload. That market is supply constrained.
I don’t think it’s too optimistic. VW with the ID.3 seems like they’re the only ones who will be able to match the scale and qualities of product to the Model 3/Y in the near term.
We’ll see though. It’s interesting in any case.
https://electrek.co/2019/11/13/la-adds-hundreds-of-ev-charge...
It can be done over decades for sure but it won't happen overnight.
With high battery prices the market stays with hybrids longer.
With cheap and plentiful batteries it moves faster to full EV.
What'll be interesting is if some vendors have access to lots of cheap batteries and so are living in one future while competitors are in the other.
One time a few years ago, oil went down and TSLA followed. It'd be interesting to see what will happen with the incoming recession (although then all stocks might go down with people pulling out of the market).
From here: https://insideevs.com/news/343998/monthly-plug-in-ev-sales-s... - by # of units sold, no one is even close to the Model 3. People with money to buy electric cars with can probably afford a $50k car (Model 3) that does everything well over $less cars that do everything kinda poorly.
Sure maybe for the next 2-5 years people will do business as normal but are you really going to buy a Corolla for $30K when you can get a Tesla Model 3 for $30K? That is what will cause a quick shift.
The Tesla requires 50,000 kWh to drive 200,000 miles. At $0.08/kWh (what I’m paying), that’s just $4000 in electricity. $36k + $4k = $40k
That’s surprisingly close for a Tesla Model 3 versus a Corolla.
And most people will not be on track to drive 200k miles in their car before the loan is paid off. Which leaves them upfronting a very large percentage of the savings.
Yes, Arizona has good rates.
Fuel-cell/electric hybrids are a different value proposition and will keep going.
But they'll increasingly drop gas hybrids and jump to full electric, perhaps after the next generation of vehicles.
I thought that was in 2012? Of course "recently" is kind of subjective.
Edit: Ah, so they only introduced plug-in hybrids in the United States in 2016. Wonder what took them so long.
John Q. Public has no reason to buy an EV. Today's gas prices don't put the same dent in his pocket that $5/gallon* gas did. And there's good reason to believe that $5/gallon gas is probably never coming back.
I am for EVs, Tesla, and anything that can keep us from making large portions of Earth unarable and uninhabitable. But most people's car-buying decisions are driven by economic realities, not environmental concern.
*$5/gallon US average price - I understand it's frequently this high on the coasts and in large cities, and it's almost always higher in countries with appropriately levied fuel taxes.
John likes fast cars. And oh boy my Nissan Leaf is fun to drive! Mountain driving feels like floating silently into the air. Instant torque, no gear shifting.
John may also appreciate the extra leg room, as even a compact car gains a lot of room without a gas engine.
John also likes saving money and convenience. And while gas isn't super expensive, I wake up every morning with a full charge for about $1. Gas stations just aren't a part of my life. (charging away from home is still a PITA, FWIW)
John might also like skipping the majority of standard maintenance. No oil changes. No random belts. Less brake wear (I think?) from regeneration. Sure, after 100k you'll probably want a new battery, but it's a known cost that's dropping.
Maybe EVs need to drop the 'environmental' badge and focus on how awesome they are.
just curious, what else have you driven to compare it against? I rarely hear even hardcore EV enthusiasts describe that car as "fun".
But, this isn't a nice car- I paid $6,500. I'm just comparing it to every ICE car I've driven (aside from that one time I got 20 minutes in a Lamborghini), and definitely every ICE car you can purchase used for $6,500.
But given the acceleration and smoothness, I'm just betting it's more fun to drive than nearly every car described in commercials fun to drive.
On the Model 3, if you enable Hold mode, then it's possible to drive without EVER using the brakes outside of emergency situations. The rotors and pads will theoretically last forever outside of environmental damage.
If the $40K model had a longer range, I'd place a preorder.
GA Power offers $.01 per kilowatt hour rates in the middle of the night. A Tesla Model 3 gets 2.91 miles / kWh. Driving 1000 miles per month in the Tesla costs $3.44.
Fueling the Tesla costs $1200 less per year than the BMW if you drive an average number of miles, and we haven't even gotten to the cost of oil changes and brake pads.
This is perhaps true for a few countries making good cars. The rest of EU is more than happy to drive German and French cars (if they can afford it, of course).
Sure some manufacturers will go bust and collapse, but other will adapt, and new ones will be created.
I'm quite puzzled by Tesla's valuation, such a valuation is betting on it becoming a huge actor in the post IC automobile industry which is not a given.
I'm also skeptical about the "Iphone moment", functionally the Iphone was a huge step forward (basically having a small computer in your pocket vs having something just doing phone calls, SMSes and snake), but a Tesla, well, right now, it's still a car which does more or less the same thing as any other car (just slightly better in some aspect, slightly worst in others).
It's also not the same market, the Iphone appeared in the booming market of mobile phones which was seeing exponential growth at the time. And also, the gain in functionality and convenience was enough to transform the market from consumers willing to pay at most ~100$ for a flip phone to consumers willing to pay 1000$ for a smartphone with all that entails in term margins and profitability.
The car market by contrast, is not seeing such a growth, and it's unlikely consumers will be willing to spend that much more for their car.
There are potential market shift possible which could be caused by things like reliable autonomous vehicles, tighter regulations forbidding IC vehicles in some cities, cheaper cars (as EV are mechanically simpler, it's a possibility), but these are somewhat elusive.
Tesla valuation is at the very least a huge bet.
The iPhone wasn't the first smartphone. In fact when released it was significantly inferior to existing Symbian and Nokia offering in terms of "objectively useful" stuff like browser behavior, modem bandwidth and third party app support. Obviously it was transformatively better, in ways that the established players didn't understand enough to emulate, but it's not correct to imagine it as a first mover.
In fact the Tesla/Apple comparison seems almost perfectly apt to me.
I personally have bought my last internal combustion engine car. I had planned to purchase another vehicle by now, but will wait for the Model 3 (perhaps another?) to mature a bit then go electric. I’m curious how many others out there have changed their calculus, too. I think it’s very analogous to iPhone’s rise, which must account for the stock.
[1] https://www.autonews.com/article/20171105/INDUSTRY_REDESIGNE...
iPhones couldn't run Flash (which powered all of the interactive content on the internet at the time), couldn't send MMS (which was the way everyone shared photos at the time) or run apps (which was how feature phones added functionality at the time).
"Why on Earth would anyone want one of those!?" was a pretty common reaction, yet they still sold like hotcakes. In the case of Flash and MMS, the whole mobile internet changed to suit the iPhone. In the case of apps, Steve Jobs finally relented, leading to the single biggest software marketplace in the world.
That reaction really only came from makers of competing phones. (RIM execs famously refused to believe the battery life was possible, Balmer threw very unconvincing dismissals.)
Everyone else was standing in line to buy one.
I remember thinking (and hearing):
'Way too expensive'
'I want a tactile keyboard'
'Nice, but I don't need one'
and so on.
However, the overwhelming response to the iPhone was extremely positive. Even from non Apple sources.
RIM didn’t think the iPhone was possible when it was first released. Google instantly changed the direction of their Android project when the iPhone was released.
Maybe also complaints about bad autocompletion?
Qwerty keyboards were always a niche, and "nice, but I don't need one" is reasonably classified as an underestimate of the product but it's still approval.
The iPhone 3G changed this fundamentally; you didn't have to be a die-hard Apple fanboy to justify wanting one of those, because it was the only phone on the market that actually gave you sufficiently usable mobile access to "the real Internet".
The original iPhone sold for $600 and a 2 year AT&T contract.
The iPhone had a ton of pricing headway to make itself more attractive.
Tesla is almost the exact opposite.
Now, this isn’t an argument against Tesla or its stock price (that’s a different argument altogether). This is an argument against the idea That Tesla and the iPhone are in any way comparable.
That is most certainly not the state of the car industry.
And you can see how "old industry" will play with old wet cell batteries and newer batteries in data center spaces (newer batteries are considerably safer in reality with each cell monitored, with the battery wall automatically removing problematic cells, and requiring less than a fifth of the space of wet cells). However wet cell manufacturers have been really good at manipulating and adding regulations that make newer batteries untenable to have since regulations are purposely broad enough that each inspector you bring in will cited the same regulation as having a different meaning.
They were almost the textbook definition of a disruptive product (worse on traditional metrics by which products compete, but better on some key factors that have customer value)...
A lot of people should do the math on the model 3. The math is current car payment + 90% gas payment = new car payment on a model 3. The remaining 10% is what you pay for electricity.
The building that I live in is going to run out of physical space for electric meters long before it has issues with electrical capacity. My neighbor opted to forgo having a charger for his Model 3 and instead put one into the garage of his weekend home (he doesn't drive much during the week so he'll be ok).
Given existing equipment on the market now, our building can support maybe 10-15% electric cars. If you are designing a new building, there is no limitation. Our condo board has been searching for a solution and has found some things that are "promising", but nothing that will solve our problem before we run out of space. Again, this is a physical space limitation for the meters, not electrical capacity. And it's a problem where the solution will have to interface with the existing built environment and the existing electrical grid and the existing safety codes, etc. If all you pay attention to are single family homes with garages, you'll never know this is an issue until sales take a nosedive in big cities.
In a new building, you just design the electrical system so this is a non-issue. In an existing building, it's not so simple. Any state that has a lot of condos is going to have 100+ years of condominium laws that govern the ownership and usage of space in a condominium. You can't force someone to share their space and you can't authorize someone to enter someone else's space.
In Germany, 1 kWh costs over 30 cents. As far as I know, that's one of the highest rates in "Western" countries.
If electric cars make sense in Germany, then they can succeed pretty much anywhere.
Edit: https://en.wikipedia.org/wiki/Electricity_pricing#Global_com... lists Germany price/kWh at 0.35 USD, making it indeed the most expensive Western country at least by quick eyeballing.
We drive 10K miles per year across two drivers. My daily electric (LEAF) costs me $0.05/mi for energy (and I love it). My wife’s SUV costs $0.10/mi for gas and a few pennies for oil (and she loves it). She pays $600/year max for fuel. That covers about a month of Tesla car payment.
There are many reasons to like a Tesla. It’s almost surely not the cheapest way to motor though. A $5K Honda and investing the difference will be wildly cheaper during the ownership period (including no need to carry collision/comprehensive insurance!) and have a much higher residual value (in the investment account). To me, that should be more compelling to many people.
Depending on where you live, there are sometimes EV charging spots in apartments/condos. To me, this is pretty clearly a supply/demand issue.
Today, there aren't enough EV drivers for condos to care, but as the percentage of people who own EVs increases, more places will install chargers. It's the exact same process that resulted in gas stations being everywhere.
Of course these are all IFs:
- battery chemistry: change in electrolyte, if not solid state
- modular wiring (way less expensive cable to make and install)
These two are worked on as of now, if they pan out, that's another drop in price and increase in usability.
Taking in account that the amount of money flowing into EVs has most probably increase by an order of magnitude (German brands, etc, all are investing). This may very well cause an overall drop in prices in all parts. Commoditization..
Time will tell
Even a level 1 charger (1.4kW) can add >50 miles worth of charge overnight (12h) and people living in condos tend to have a shorter commute.
And it's going to get better - for example Ontario mandates 20% parking spaces have charger installed and remaining 80% be ready to have one installed since 2018. IIRC the requirement is 200A per parking spot.
The bet is that the advantages outweigh the negatives.
Being hundreds of dollars more expensive is objectively a disadvantage.
"not a very good email machine" sounds right, in comparison to something like a blackberry.
And that's it, he only listed those two things. He didn't try to make up fake reasons.
Something being better does not mean the disadvantages somehow don't exist.
Stockholders are not the only people who have claims on the liquidation value and future profits of a company. Bondholders and pensioners do as well. Market cap != valuation.
If enterprise value is market cap - debt (forget cash) then you’re saying this is the net dollar value of owning every share of Tesla.
But “rational” investors are aware of debt. It would seem to me you should be adding the debt to the perceived future earnings to actually come up with gross expected income.
That is if I buy Tesla and Ford for $10 each, and the Ford has no debt, and the Tesla has $10 debt, and I pay $10 because I consider them equal value... that would mean you expected total future earnings from holding each to be $10 from Ford and $20 from Tesla.
Market value = market capitalization
Bondholders have claims on part of the company's assets and these claims reduce the value of the company (that's the liabilities part of the equation).
Pensioners don't have any claims on anything except perhaps on their pension funds if they have one.
If I borrow $300 billion (heh) and call myself a car company, that doesn't make me a more valuable company than Ford and Tesla combined - my net worth hasn't changed.
Market cap == (perceived) value.
Enterprise value is the COST TO PURCHASE the company, if I'm considering buying it.
Like buying a used car and assuming payments:
enterprise value (real cost) = purchase price + loan balance - coins under the seats
Market cap is the cash I have to pay up-front
Debt is the new debt I will have to pay when I own it.
Cash-on-hand is the cash I get back when I buy itenterprise_value = market_cap + debt - cash
Different companies are capitalized differently - some use all equity, some all debt, some a mix.
Not sure I agree that other claim holders represent reductions in the "value of the company". The same company can be capitalized different ways - the enterprise value for that company should be unchanged.
IOW, if you buy a company for a $100bn but it has liabilities of another $100bn that means it’s cost to you is actually $200bn, because you will also have to pay that additional $100bn. That’s why cash reduces the EV of a company, because if you pay $100bn for a company that has $50bn in cash, you effectively paid only $50bn (which is the EV).
Market cap is the value of a company.
market_cap = total_shares_outstanding * share_price
I passed all three CFA exams a few years back and studied this extensively. I might be remembering incorrectly, but think you're making factually incorrect statements. Appreciate your comment and the motivation to think about this more.
I recommend reading up on these terms: * market value of equity * book value of equity * intrinsic value of equity
Borrow $1 trillion. Burn the cash.
Is the company now more or less valuable?
By your formula, how has the enterprise value changed?
More. Normally burning a trillion dollars would have taken about a trillion off the market cap, so if it held steady that means a trillion dollar gain somewhere else.
Enterprise Value is a metric used for acquisitions to determine the real cost of acquiring a company (that’s why cash lowers enterprise value, since it helps pay off some of the cost of acquiring the company, and liabilities increase the enterprise value because those are additional amounts of money you will Have to pump into the company).
a) $600 billion
b) $300 billion
c) $0
And that's assuming the company is being liquidated. Most companies with viable businesses are worth a lot more than their assets because the big part of the valuation is assumed future earnings.
But if it was cash and debts instead of assets and debts, the company wouldn't be worth $300 billion to bondholders?
If you give a teller $1 for 4 quarters, you don't say that you spent $1.
I currently am worth $0 to that bondholder.
I spend one of those borrowed dollars on a chocolate bar.
Now I'm worth $1 to that bondholder??
The spending is done with a completely different person than the bondholder.
I'd love to create lots of value for you by borrowing money from you. I would even consent to not destroy any of that value through making payments.
The bond is worth $300b to the bondholders, but only because it is expected to be paid back and is secured by the $300b assets. You can prove that by assuming those assets disappeared: how much is the bond (or the company) worth to the bondholders then?
The intrinsic value of a company's equity often differs from the book value of equity.
The book value debt can also differ from the market value.
Learning some financial accounting concepts should help you understand this better.
0: https://mondaynote.com/tesla-and-apple-valuation-questions-c...
From my seat, that really remains to be seen. The existing companies don't seem to have found a way to compete with Tesla's EVs yet. They may get there eventually, but Tesla has it now.
Regarding valuation, one point I read elsewhere is that Tesla does a lot more in-house, which adds to the valuation, whereas the existing companies will buy a lot of their parts and/or contract out work. I don't have a source on the specifics, but if true, the logic certainly seems reasonable and would explain things. The value of a company shouldn't be based on their final product, but on the value they added to the parts/components they took in to create that product.
This somewhat reminds me of BlackBerry. They're basically the only game in town right now, and thus maintain a market advantage.
However as larger companies shift to EV's as the technology matures how will Tesla be able to maintain its advantage and market valuation?
Should the VW group, Toyota, or the Renault–Nissan–Mitsubishi Alliance decide to go all in on EV's will they be able to produce something akin to the iPhone to Tesla's BlackBerry?
These ancient companies, so set in their ways, who have been incrementally making tiny adjustments to their cars for decades, will never "suddenly leap forward" to come out with something more advanced and more appealing than a Tesla.
Tesla isn't the blackberry here, the other car companies are! You're basically the guy in 2008 saying "sure Apple has an advantage now, but what will they do when Blackberry catches up and shifts to touchscreen based phones?" Guess what never happened.
Maybe Audi and BMW have to think about what it means to make a competitive EV since their price-points are similar to Tesla's, but VW proper will be pushing EVs at the ~$30k MSRP range. They don't need to be more advanced than a Tesla at that price because there is no significant market of people cross-shopping $50k Teslas and $30k VWs. What these manufacturer's need to do is release electric cars with reasonable ranges, near existing price-points, that look and feel "German Car".
https://ww.electrek.co/2019/12/13/vw-not-launching-id3-elect...
https://www.cnet.com/roadshow/news/volkswagen-id4-electric-s...
It's supposed to get its official reveal in the next month or so.
Not really. BlackBerry basically invented the smartphone, and introduced it to market success. We're talking pre-2008 BlackBerry is Tesla today.
Tesla basically invented the EV, and is leading the market.
People are going to start preferring electric cars. They're faster and more efficient and battery improvements are likely to continue to reduce their disadvantages (up front cost and range). The traditional carmakers could make a strong commitment to electric cars right now, the question is will they? It's like asking Microsoft to embrace Linux in 1999. They could do it, and they might be better off if they did, but you can certainly see why they might drag their feet in a way that makes them worse off in the long run.
They also have a huge problem with dealer incentives, because the dealers make most of their money on service and electric vehicles need less service, but the dealers are the ones choosing which cars to promote to anybody who walks in the door. It's no use to make a great electric car if any time somebody comes in looking to buy it, the dealer convinces them not to.
Volkswagen are doing exactly that. They have many BEVs models coming out this year across their multiple car brands (such as VW, Audi, SEAT, Skoda, Porsche).
The Porsche Taycan is the only 800 volt EV on the market today. The Volkswagen ID.3 has similar range to a Model 3 at a lower price point.
Even Audi's headlights are interesting. They're essentially projectors fast enough to run animations: https://www.youtube.com/watch?v=v2ara0My_Yg
Eventually they are bound to catch up on volume. But by then, might Tesla have a significant desirability advantage? And in the auto-market, desirability is an amazingly effective proxy for assessing margin advantages.
I mean, I agree that at some point Tesla is going to get beaten. But to argue that GM or Toyota will do it seems... less likely.
For all I know as cars become more integrated with computers we'll see an iCar, or a Google Car which will shake up the industry. Currently major car brands view tech companies as their competition in the long run.
> Tesla does a lot more in-house, which adds to the
> valuation, whereas the existing companies will buy
> a lot of their parts and/or contract out work.
The suppliers are beholden to their master and can live or die on a whim. GM, et al know the cost of manufacturing down to a penny and control supplier margins very tightly. They also collude with other manufactures to suppress prices.
If you look at actual vehicle sales, I'd say this quote is optimistic at best. Tesla is still very much fighting an uphill battle in terms of market share.
https://insideevs.com/news/343998/monthly-plug-in-ev-sales-s...
2 reasons.
1) We have to do something about climate change. Doesn't mean we will, but more and more countries besides Norway will get serious about it.
2) At some point BEV's will be price competitive with ICE. The $40K Tesla Cybertruck is cheaper than a medium duty crew cab from legacy manufacturers.
2) Price is only a very small part of the adoption equation, people happily pay $80k for ICE pickup trucks for instance.
3) You didn't add this but I will - it's not clear the EV platform is the preferred alternative to the ICE for consumers yet, as evidenced by overall global vehicle sales.
Tesla's are pretty ugly, they have horrible reliability. You don't buy a Tesla for style, you buy it to show off.
When I bought my Tesla in mid-2018 the alternatives were the Bolt and the Leaf. Both had significantly worse range--I was looking at a 180-mile roundtrip commute for the next year, so range was important. Both were uncomfortably small for me. Neither matched Tesla's driver assist features for my almost entirely highway commute. Neither had fast-charging options along my commute route; Tesla had two superchargers.
The situation has changed a bit in the last 1.5 years, but still nobody else matches Tesla's range or charging network.
I'm not sure what metric you're using for quality, but Tesla won me over on features, not name.
> Tesla's are pretty ugly
Subjective. The X is a bit strange, but the falcon doors are actually super convenient (as long as they don't break). The S and 3 exteriors are both very nice looking in my opinion, though I'm not such a fan of the spartan interior on the 3.
Oof. The last thing I'd want to add to an already horrible commute is a supercharger stop, or more.
> the falcon doors are actually super convenient (as long as they don't break)
Kinda a pain in the ass in a garage.
The Tesla had enough range that if I was able to charge regularly I didn't need the supercharger, but it was a nice backup if something prevented me from charging.
Also stopping halfway through the drive and grabbing a snack while at the supercharger wasn't really a bad thing.
>Kinda a pain in the ass in a garage
I have a standard 7ft garage door and they can fully open with about 2 inches of clearance at the top. Not really a pain at all.
It is a very polarizing car, some strangers will go up to you and tell you how Tesla will go bankrupt, you'll have no one to service the car, it will lose all its value and other things like that. "The name" is nearly a liability to me. It is just a car, it is useful.
Yes, same here. I also initially wanted a Leaf, in part because I don't really want my car to be so conspicuous--before the Tesla I drove a tan Corolla, about as inconspicuous as you can get. But the Leaf (and Bolt, which was the other EV option at the time) simply didn't make sense.
Any references about this? So far I've only found evidence they're functionally highly reliable.
Meanwhile it's fairly unambiguously true that electric drivetrains are a lot simpler and should require less maintenance in general.
Short seller FUD, on the other hand, is quite real.
The traditional car companies specialy is not cars. Its manufacturing and supply chain management.
Tesla does seem to be mastering manufacturing, and being more vertical they dont need as much supply chain handling.
They are not particularly advanced in tech from what I've seen. They do have a bunch of young motivated engineers that have a lot to learn and they can skip over a lot of things and take advantage of the supplier network providing the hard stuff.
You may not have seen as far as Sandy Monro [1]
[1] https://cleantechnica.com/2018/07/16/munro-model-3-electroni...
I've seen further than that. I did read something a while back that sounded like they have a nicely integrated inverter/motor combo.
Don't forget the finance side of things! GMAC was founded 101 years ago and also got a large portion of the bailout.
Operating for years is a cost, not a benefit. TSLA can hire all their most experienced engineers, without the cost of paying pension benefits to their former employees. It's the same playbook that JetBlue used to beat the existing airlines, by poaching pilots from other airlines without paying for their training or funding their legacy cost structure.
- Scott McNealy
Now, TSLA is only at P/S of 3.8, but that's even more absurd for a car company than 10 is for a computer company.
We'll see. So far we have been wrong. The bulls deserve to gloat, but time will tell.
Edit: not sure why the downvote.
Ferrari has a $32.7b market cap on $3.7b in annual revenue for 8.8x.
Tesla has $93b market cap on $24.5b in annual revenue for 3.8x.
P/S only works well when the situation is relatively static.
I mean, yes, context matters, and there are cases where things are overvalued (obviously), but the reason prices rise is because revenue (profit) is expected to grow. All of those “basic” assumptions seem to assume that there is 0 growth. The arbitrary ten year payback period doesn’t make sense either.
It’s like saying a baby can’t possibly get a job, and ignoring the fact that some babies grow up into adults. I’m sure a more clever analogy exists but that’s the best I have on hand.
Perhaps in theory. In reality, Ford & GM are slow to move, slow to adopt, and not seen as a "luxury" / "cool" car manufacturer. I am not a Tesla fanatic, but you must admit it seems they're gaining a bigger and bigger competitive advantage.
If they solve self-driving, that by itself will be worth over 100 billion dollars.
Sadly, as a Tesla driver, I don't think this is coming anytime soon. There are still significant issues with Tesla's hardware, like the cameras getting blinded when the sun is at a low angle.
That sounds like a pretty serious issue for a vision based system. I wonder how lidars do in that condition.
In Europe, I'd also be worried about ability to detect crossing cyclists (when they have right of way) and pedestrians in bad weather conditions, like in mist or when it's snowing heavily.
Perhaps front sideways pointing radars could help with that a bit?
Tesla built 35x as many cars as Ferrari and is valued at 3x.
Tesla trades at 4x sales, Ferrari at 8x.
Having been in business longer is not always advantage and is frequently a disadvantage.
These are not remotely comparable companies, regardless of how much "owner love" each may have.
The Roadster has been discontinued for seven years. What it sold for then, as a fundraising vehicle (literally and figuratively), or what it sells for now as a collector item, used, is still a problematic comparison.
I'd probably be thinking more Lincoln / Cadillac when I was looking for a comparison for a US higher end manufacturer.
Sure, the other auto makers have the existing infrastructure to assemble cars, but if they don't have a way to get batteries cost effectively, they are way behind the curve compared to Tesla.
Part of Telsa makes sense, they are staking out a corner of the market that isn't big now but will be in the future. But the price you are getting for this risk makes zero sense (there was a very non-zero chance of them going bust this year).
I actually knew one of the biggest active shareholders here, and the logic is really "hit and hope". Iirc, they have said publicly that they can see this going bust quite easily but they think the upside will pay off...well, I don't get it either. The upside is whatever Ford or GM is now...and they are worth more than that. As an investor, it isn't worth losing brain cells on this...easier ways to make money, way easier.
I like Tesla as a car company and agree with this sentiment as an investor. There's a reason that I sold my shares, and also a reason that I never had very many. :)
Having said that, I'd like to add Toyota and BMW to your list of comps. BMW in particular demonstrates that there may be at least some potential for upside, IMO.
Because sooner or later - Uber and Lyft want to turn profitable, then there is a margin in certain markets where Taxis will not only be competitive but probably cheaper.
How do you know this? Q4 results aren't out.
2019 Q3 139.48M
2019 Q2 (702.14M)
2019 Q1 (408.33M)
2018 Q4 143.00M
[1] https://www.marketwatch.com/investing/stock/tsla/financials/...
I still don’t get it. You may think it’s the future, but to justify such a valuation over all other car companies which have been operating for years, and who can compete with Tesla, it seems a little extreme IMO.
EDIT: after reading some comments it seems my conclusions might be inaccurate. All I wanted to point out was that the numbers were shocking at first sight.