Re:Tesla Q3 2021 Earnings
by rossdavidh on Wednesday October 20, 2021 @05:08PM
(#28936645)
True, but it still seems unlikely that the unconstrained choice would be 100% Tesla. Do we really think Toyota will be incapable of retaining any significant % of EV sales once that's where the industry mostly is at?
The 100% isn't really the right analysis. Market caps for auto manufacturers tend to be quite low because it's a low-growth industry, and the biggest players are non-US securities where low market caps are more routine.
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.
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.