Did you ever drive one? I did a Model 3 test drive the other day. Acceleration is out of this world, but everything else... meh. Interior looks and feels like it lasts for about 2-3 years. Brakes feel like stepping into a pile of mud. Huge central screen for everything is more distracting than useful. I was happy to get back into my 2007 BMW when the test drive was over. Still feels solid after 14 years.
Try the other EVs then. Try a Taycan, try a Mach-E, try an E-tron GT.
I'm not trying to call out you specifically, but there are so many people who are completely unaware of what the auto market actually looks like, and then they compare a new Tesla with whatever old mid-range ICE they had before, and of course the Tesla seems like a magical space-age vehicle that is better than anything else they've ever driven.
But the competition isn't slouching. The Taycan isn't far behind the Plaid in performance, and it beats the Tesla in repeating launches. The EQS has longer range and way more tech. Super Cruise and Blue Cruise are better than Autopilot in the areas they are enabled. There's plenty of cheaper EVs than Teslas, like the VW ID.4 or ID.3. There will be tons of Rivians and EV Hummers and F150 Lightnings on the roads before the first Cybertruck is delivered, if at all. You can get a EV truck from Volvo, today, and other truck makers are following suit, so you'll get an electric semi from the competition way before the Tesla Semi sees the light of day.
And every single one of them has better interior quality, better fit-and-finish, and better customer service than Tesla.
This was true pre-plaid, but no longer. Tesla majorly beefed up thermals on the Plaid.
> try a Mach-E
It's crap, don't bother if you enjoy handling. Germany is the only option ATM.
> Super Cruise and Blue Cruise are better than Autopilot in the areas they are enabled.
Ah yes, Blue Cruise, which can't drive curves on a highway by itself. Seriously, what metric are you using here?
> There's plenty of cheaper EVs than Teslas, like the VW ID.4 or ID.3.
In the US, only the ID.4, and that starts at the same price as the Model 3, which is ubiquitously reviewed better.
You're making strong points, but the fact remains that Tesla is ahead. This will change, but not yet.
Sure, more expensive than a Model 3, but you get an actual luxury vehicle.
Tesla is still unbeaten at performance/dollar or range/dollar, so if that's important, go for it. But if other things are more important, the competition sure is heating up.
That's an extraordinarily hard analysis to do. Basically everyone in the industry is production-limited at this point (Tesla by factory bandwidth, everyone else by part shortages). Total volume reflects industrial realities far more than it does consumer choice.
Total world automotive revenue is something like $1.5T (I forget the source, that's from my head). At the same price/revenue ratio as AAPL (a similarly dominant player in a rather different industry), TSLA would only have to make up 8% of the world revenue to justify it's current share price.
Is that comparing Apples (heh) to oranges? Yeah, it is. But the point is there's no magic principle that says "auto companies get impoverished share prices relative to tech companies" either.
Broadly: the market is betting Tesla gets valued like a tech stock and not a heavy industry stock. And the valuation is pretty much where you'd expect if that were the case.
They're a car company, but also a battery company, which means they have the potential to be huge in everything that requires batteries (e.g. cars manufactured by others, grid scale electricity storage) even when they don't make the final product.
I'm not even sure that the car business will be their main business in the long term.
I'll include them as an AI company once their FSD model stops trying to kill YouTubers.
- Utilities: PGE is worth 22B.
- Insurance: Libery Mutual is 16B.
- Robotics and AI: ABB is 71B.
- Batteries: Panasonic is 30B.
- Cars: Toyota is 288B.
- Financing: Included in Toyota's valuation.
Ok so, if we sum all of these mature businesses together we get $427B, less than half of Tesla's current market cap. That's one heck of a bull case when you consider Toyota ships literally 10X as many cars as Tesla does, and all those other companies, you know, exist.
Anyone else I should huck onto the pile? There's still a half trillion dollars in market cap to make up for after all.
OTOH, I didn't realize Tesla's market cap has grown that big. That is indeed kinda insane.
Still hoping for the SpaceX of nuclear to emerge.
This is my biggest 'beef' with Elon, I much rather he work on nuclear then trying to make solar roofs.
This presentation by Seaborg is pretty interesting though: https://www.youtube.com/watch?v=x-Dz9sfBKEg
[edited, I mistyped 75% as 85% initially]
[1] https://www.counterpointresearch.com/global-handset-market-o...
That's nothing for a company growing revenues at over 50% while still increasing its margins.
Also, Tesla is still production limited (i.e they would steal their competitors' market share if they have a few plants available). The only market where Tesla is not growing its share steeply is where they decided not to prioritize sales. Just look at the Model Y sales in Europe where they finally to make deliveries.
Tesla don't even have a pickup to sell yet, which is USA's #1 model.
Toyota's worth 300B and they have excellent industry-leading margins. Tesla is priced at 900B while shipping a tiny fraction of the cars.
[edit] Tesla shipped 241,000 cars this quarter. Toyota shipped 2.2M. Tesla's car deliveries are literally a rounding error against Toyota's. It would take 6 years of 50% YoY growth to match Toyota's shipments alone this year.
[edit2] Toyota's PE is 9.6, so once mature, Tesla should also trade right around a 9.6 p/e, if they're really lucky.
[1] https://www.statista.com/statistics/267272/worldwide-vehicle...
The market expects tesla to beat Toyota by an order if magnitude on profit margin per car. As simple as that.
The fact that the have insane YOY growth with 14B quarterly revenue, are supply constrained - not demand constrained, have very high profit margin per car if you exclude new giga factory investments is sufficient to justify the stock price.
And its business is more than vehicles - a lot more. Stationary batteries also have fat margins.
Like who exactly? Only the American automakers are taking this seriously. Most have them have a target of maybe 50% of their offerings to be electric by 2030. Some European brands are now starting to play serious VW at the forefront of it. And the ones resisting the most are the Japanese. Mazda doesn’t even commit to a hybrid and realizing more efficient ICs coming soon in 2024. Toyota and Honda are actively seeking to block incentives to EV makers.
And even if startups like Rivian or big players like Ford,GM and VW eventually start making cars at a much better quality, they still have to match the level of vertical integration that Tesla has. The lead they have is no joke.
I've heard very good things about Fords EVs. Battery tech way behind Tesla, but they're already starting to take some of Tesla's market.
Sorry, what now? In Europe, Tesla's market share is below 20%, because they're being outcompeted by Volkswagen and Renault. But European car makers aren't taking EVs seriously?
I'll be up front in that I've never sat in either for more than in a showroom, but tell me the Taycan is not premium and the Tesla is. I have never heard of fit and finish issues like I hear Tesla customers complaining about, for example.
They were only talking about 4680 and structural battery packs a year ago and it’s about to go into mass production.
And how does Tesla's profit compare to every other car manufacturer?
Clearly Tesla is very early in their journey, and their valuation and PE is wildly different from Apple, they're not even in the same ballpark. The equivalent in Apple's trajectory would be Apple being valued in 2008 say after the promising iPhone launch at almost 1 trillion, does that sound reasonable to you? In fact they were valued in 2008 at 80 billion, 1/10 of Tesla at present.
I think it's too high, the parent thinks it's too high, and even Elon Musk thinks the valuation is too high (as he said twice earlier this year).
Maybe, maybe not. But they have double the margin of everyone but Toyota and Toyota is dragging its feet on going EV.
For cars, there is value in having a different car than your peers, it gives you status.
The larger Tesla's market share grows, the more boring it will become to own one, and the more exciting the competition is going to get in the public mind. With comparable competition, Tesla will never ever get a total car market share over 30%.
(1) Bearish on Elon, I think he's nuts.
(2) Bullish on Tesla the business - electric cars are clearly the future, Tesla builds honestly really great cars. I don't have a car, but if I were to buy one it would no question be a Tesla. They're going to make and sell a lot more cars, period.
(3) Bearish on the valuation. At this price its still worth about as much as every other car company put together, and their competitors are growing into electric too. Market breakdowns seem to show that where options exist people do not pick Tesla 100% of the time. It's more like 12%, equal to VW in Norway.
It is however a cult meme stonk, so there's no real rationality behind it.
[edit] I've been making good money selling weekly iron condors. As much as it's moving, it's still been moving less than cultists anticipate haha.