> To justify their current valuation, the “bull case” is for them to dominate the entire automative industry (not just the EV segment)

Toyota has over twice the market cap that Tesla has (230 billion vs 105 billion) and considering how big the auto industry is outside of just these 2 companies, I don't know how you think an automotive company at 105 billion is vastly overvalued.

The argument is not that no car maker deserves to be valued at $XXX billion. It's that Tesla, which produced around ~1/30th the number of autos as Toyota last year, probably shouldn't have a market cap that's anywhere near Toyota's.

I think your mistake is in assuming that Tesla only makes cars, and the number of them they make is the only factor that goes into their valuation.

They also have the world's biggest charging network, storage solutions, solar solutions and produce more batteries than virtually everyone else combined. Mercedes actually just put out a press release that said they can't build enough electric cars because they can't build enough batteries, because Tesla acquired the company they were going to use in 2016. Evidently Mercedes have done exactly zero about that in the years since.

Of course Tesla also have the whole "self driving car" thing they've been working on for a while. If they crack that one in the next ~24 months, their valuation will easily top Toyota's, because they're worth so much more than just how many cars they can build.

How much of their revenue comes from not making cars?

Good point. Right now it's not much, but I think the valuation is based on the speculation that it could soon be a lot.

Right now revenue from energy storage resembles Tesla's auto business in 2013[1].. so if it grows at the same rate...

[1] https://twitter.com/kerooke/status/1222637828741439488

Their solar business, which they purchased, has declined every year since the acquisition

Until now. "The company marked a 26% quarter-on-quarter increase in solar installations"

https://cleantechnica.com/2020/01/29/tesla-energy-lifts-off-...

QoQ. They still showed a YoY decline for 2019. And that's in a market that's been expanding, so they've significantly lost market share.

What is important is that they can make money from selling lots of electric cars. While the other companies get horrifying margin on their electric car and they have no clue how to make money with them.

Can they? They had a loss of $800 million in 2019, and that’s with over $500 million in regulatory credit sales boosting that. The EV market still seems like it incinerates capital

They lost that money because they had to repay massive amount of debt early in the year. They did that successfully and once that debt was payed they were profitable.

What matters is that they produce lots of cars and the cars have a better then expected profit margin, focusing on anything else is simply foolish.

No, that’s GAAP loss, so that doesn’t include any debt repayments. That’s what the business generated.

And they produced the most cars they ever did and still lost money for the tenth consecutive year, in a year where the expectations given from Wall Street and the company were to make money.

Can you please link me to this press release?

Press release for what?

This: "Mercedes actually just put out a press release that said they can't build enough electric cars because they can't build enough batteries, because Tesla acquired the company they were going to use in 2016. "

Here's the original (in german)

https://teslamag.de/news/betriebsrat-tesla-ist-mitschuld-an-...

And translated

https://www.reddit.com/r/teslamotors/comments/euob34/the_cri...

That's not a press release from Mercedes, and given that Mercedes denied the core allegation that production would be halved this year, I would probably give them the benefit of the doubt on the rest...

Stock valuation also includes future growth and Tesla is consistently showing large growth in deliveries and expanding with new factories.

This growth will eventually plateau but it's a good bet that it will do so with millions of cars in production.

One of them has manufactured 900k cars the other manufactured more than 200 million. Even if Tesla were the market leader and reached peak production rates of 10 million cars per year it would still take 20 years to catch up and justify that valuation.

What does the total car manufactures have to do with anything at all? Cars sold last year, sure, that makes sense.

They would have to do substantially better than Amazon, who lost far less money before becoming profitable.

Hardware startups are always harder.

Even as a long-time Tesla fan, I think their stock price is fairly excessive.

> the “bull case” is for them to dominate the entire automative industry (not just the EV segment)

Is Tesla's market valuation highest than the highest valued automakers?

Tesla is not just a car manufacturer though right? They are a solar company and battery company too. They could conceivably have astronomical growth in both of those segments.

The valuation of Tesla also seems very high to me at first, but given their growth in the other segments such as energy storage and generation, I absolutely think that the valuation could be justified.

Tesla owns the entire vertical from battery cell manufacturing, using those cells to do work (automotive), home and grid energy storage, and solar generation. Throw in the rest of Elon’s companies and you also get the transportation network itself (Boring) and even the data provider for these cars that need to be highly connected (Starlink). And if you really want to believe Elon, some weird, someday a pressurized version of the Cybertruck might become the transportation off of this planet.

And that's not all. They are also now a chip maker, an insurance company, a technology company with some of the leading research and IP in self-driving, and also leaders in automated manufacturing.

Other car manufacturers would be smart to source their batteries from Tesla.

I doubt Tesla will sell to them, Elon has said a few times their vehicle output is constrained by how many battery cells they can make. If they sell those cells to other manufacturers, they won't be able to make so many cars themselves.

Making vehicles is hard. There are a lot of logistical and technological challenges, plus the deep penetration of cars into society means that marketing, perception, and utility are on the lips of the hyper-rich down to the common man.

With batteries... you just make batteries. With cars you have to score adequate or better in lots of different areas to be competitive.

It’s funny how closely Tesla mirrors iPhone and the doubts everyone had about that VS The traditional phone makers.

“No-one wants a touch screen keyboard” etc, the CEOs said as their business evaporated.

Tesla are still at iPhone 3G point I reckon, having just released their first affordable car.

Also consider that while they are so far ahead - they are still accelerating. And the traditional car makers haven’t even realised they’re in a race to the death yet.

Most countries have barred the sale on non-EV cars in couple of decades. That’s not actually that far away. Or self driving could make all other cars seem like Nokia 3310s.

Out of curiosity: Could you explain your reasoning with numbers?

Cheers!