Share price reflects not just profitability but also expectation of future profits and growth.

And in case of Tesla a lot of this expectation was based on charisma of its owner and on belief that he is the force behind Tesla's spectacular success.

Now, if you are an investor, it seems the owner lost its focus and made a bunch of questionable decisions. This puts a huge question mark on whether he will be as involved and as effective with Tesla in the future.

> in case of Tesla a lot of this expectation of future profits and growth was based on charisma of its owner

Not even a little bit. Musk has a charisma of a bag of potatoes.

What matters is that Tesla had 10 years of 50%+ revenue and unit growth, on average. They performed better than any of the FAANG companies.

With Giga Berlin and Giga Texas ramping up, Cybertruck, refreshing Model 3 for lower cost of production, ramping 4680 battery production, lithium refinery in Texas, Inflation Reduction Act in US => the 50% growth the company is guiding for in the next several years seems to be in the bank.

What charisma is depends on the person. It is defined as ability to induce devotion in others and different people will get moved by different things.

Charisma is not an absolute and objective measure. Some people will find Trump charismatic to them, some people will see him completely opposite.

I personally find Warren Buffett very charismatic, some people will probably see him as an old and wrinkled guy who is boring them with stories they don't care about.

As investors are generally mostly interested in money, ability to get shit done and generate profits reliably IS charisma.

A Tesla share is $159.32, and its EPS for the last 12 months is $3.61 [1]. That means 2.3% per year.

A Toyota share is $145.55, and its EPS for the same period is $16.82 [2]. That means 11.6% per year.

[1] - https://companiesmarketcap.com/tesla/eps/

[2] - https://companiesmarketcap.com/toyota/eps/

If Tesla is massively profitable, Toyota is 5 times so.

Tesla has been building out its manufacturing lines during this time, which is extremely capital intensive. Remember when the Model 3 was just being rolled out, and how that almost killed them?

So has Toyota (and most other auto manufacturers).

Tesla's gross margin is 25%, Toyota's gross margin is 15%.

And at one time Porsche progits were higher than their revenue (look it up, that was caused by their VW shares exploding in value). Ferrari is more profitable than, say, Hyundai. Different market segmentd have different profit margins, and Toyota actually can build cars with retail prices below 30k.

Do they still make a large portion of profit from selling carbon credits though?

No. In their latest filing[1], automotive regulatory credits are around 1% of revenue.

1. https://www.sec.gov/ix?doc=/Archives/edgar/data/1318605/0000...

Revenue =|= profits. Now, if you are interested, devide what ever that revenue was by Tesla's profits. Because those credits have a zero cost behind them. And those credits will go away with every EV those other brands build and sell.

If you look at the SEC filing it's 8% of profits. Though Tesla isn't trying to be particularly profitable right now. They've been spending tons of money on new factories so they can scale up production.

Credits aren't pure profit. You have to build and deliver a car to get them, so the 1% number of the parent comment is much more relevant than your 8% number.

Don't you have to include the shares outstanding in your calculation? Your analysis seems to assume the total shares is the same between the two companies.

No; the “PS” in “EPS” stands for “per share.”

Tesla EPS growth: 94.96%, 660.27% Toyota EPS growth: 15.49%, 6.95%

The market looks to the future. A company with 95% earnings growth deserves much higher P/E than a company with 16% earnings growth.

Tesla and BYD are clearly dominant players in a rapidly growing EV market.

Toyota is a laggard among other laggards. With a single EV only introduced for sale this year they are behind pretty much everyone.

It makes a lot of profit but it has an irrational P/E ratio well in excess of other automakers (49 for TSLA vs 11 for TM).

How about if you factor in the last 10 years of marketshare trajectory and then extrapolate a little?

Past performance is not an indictor of future performance.

VW is on pace to outsell Tesla in a little over a year, they're just one competitor.

I now see just as many Polestars and VW id's as Tesla's in the UK ... it's quite remarkable how much things have changed from Tesla being the only real game in town just a few short years ago.

Musk doesn't exactly strike me as a guy who would not cook the books.

Guy believes in manifestation and self-fulfilling prophecies, fake it till you make it type strategy.

General Electric employed the same strategy too with all its financial engineering but at the end of the day you are still making turbines in the real world and with anything manufacturing you have razor thin margins. Of course we came to know about it only after

Agreed.