Tesla: Growth or Value?

[srt7]

This is beginning to look like the greatest financial train wreck in history. So far Tesla is has lost $930 billion in equity wealth from its peak just a year ago, rapidly approaching a trillion dollar loss.

What was notable when Musk was financing his Twitter purchase is that the banks would only loan him 20% on margin using his Tesla shares as collateral. That's 5 dollars of Tesla for every 1 dollar in loans. It's beginning to look like that was a good call by the banks.

Telsa is rapidly approaching the level for a margin call when all heck breaks out. Musk would be forced to liquidate millions of Tesla shares to cover his loans. Musk would end up with no debt but also no Tesla stock -- and a massive tax bill. He could go in the space of a year from world's richest man to one of the -- not so rich. I would guess Musk is sweating bullets at this point.

This is even more entertaining than watching hedge fund managers get scalped by a bunch of kids trading GameStop.

Ha! I was thinking about it just this morning. Smart move indeed by the lenders!

[Beensabu]

TSLA is being hammered again today. It is listed in the Growth Index -- but at what point does it really look more like a value stock?

It'll be a value trap at some point.

Right now, it's a pssssszzzsstt...

Compare TSLA to BTC on a chart. It was the same speculative bubble.

[GP813]

Tesla will be a multi-trillion dollar company. The switch to EVs by other automakers won't harm Tesla but solidify their positions. While GM, Toyota, and VW are destroying their legacy businesses to catch up to Tesla, Tesla doesn't have the same baggage. Already Toyota had to admit that their EV plan was totally insufficient and they were at severe disadvantage in the cost of manufacturing EV's compared to Tesla, so they sent their engineers back to the drawing board. Top VW leadership has said the same thing in candid moments. Then there is the fact Tesla is also a storage energy company and will likely be a growing defense contractor. Tesla is a growth company and they have a lot of market to grow into.

Elon Musk is a wildcard but at this point Tesla has enough platform products that a competent manger who can navigate supply chains ala a Tim Cook can probably steward Tesla even better than Musk at this point.

[smooth_rough]

Tesla will be a multi-trillion dollar company. The switch to EVs by other automakers won't harm Tesla but solidify their positions. While GM, Toyota, and VW are destroying their legacy businesses to catch up to Tesla, Tesla doesn't have the same baggage. Already Toyota had to admit that their EV plan was totally insufficient and they were at severe disadvantage in the cost of manufacturing EV's compared to Tesla, so they sent their engineers back to the drawing board. Top VW leadership has said the same thing in candid moments. Then there is the fact Tesla is also a storage energy company and will likely be a growing defense contractor. Tesla is a growth company and they have a lot of market to grow into.

Elon Musk is a wildcard but at this point Tesla has enough platform products that a competent manger who can navigate supply chains ala a Tim Cook can probably steward Tesla even better than Musk at this point.

Japan is 100% dependent on oil imports. If EVs were viable for mass market, Toyota would be doing it. Toyota is planning for future sales 50% internal combustion engine.

[the_wiki]

Tesla will be a multi-trillion dollar company. The switch to EVs by other automakers won't harm Tesla but solidify their positions. While GM, Toyota, and VW are destroying their legacy businesses to catch up to Tesla, Tesla doesn't have the same baggage. Already Toyota had to admit that their EV plan was totally insufficient and they were at severe disadvantage in the cost of manufacturing EV's compared to Tesla, so they sent their engineers back to the drawing board. Top VW leadership has said the same thing in candid moments. Then there is the fact Tesla is also a storage energy company and will likely be a growing defense contractor. Tesla is a growth company and they have a lot of market to grow into.

Elon Musk is a wildcard but at this point Tesla has enough platform products that a competent manger who can navigate supply chains ala a Tim Cook can probably steward Tesla even better than Musk at this point.

Even If true, and they eventually sell as many cars as a VW or GM, why would they be worth 6-8x what those companies are worth now? Or 20x like they were last summer?

[nisiprius]

In the old-school meaning, it would be a growth stock because it doesn't pay dividends, and is would be held for capital appreciation and not for income.

In the old-school meaning, it would not be a value stock because price-to-book is (first Google hit) about 10, and first Google hit says

Traditionally, any value under 1.0 is considered desirable for value investors, indicating an undervalued stock may have been identified. However, some value investors may often consider stocks with a less stringent P/B value of less than 3.0 as their benchmark.

In the old-school meaning it would not be a value stock for a more fundamental reason: because it's a going concern that is manufacturing and selling automobiles, not a basket case ripe to be plundered for its assets. It's not one of the "cigar butts" that Warren Buffett once liked to pick up.

In factor investing, blindly plugging in TSLA in PortfolioVisualizer's factor regression tool, it would not be a value stock because it has a -1.05 negative loading on the HML (value) factor.



(Choosing to look at ETFs from someone other than Vanguard just for variety...)

the iShares S&P 500 Value ETF IVE offers "Exposure to large U.S. companies that are potentially undervalued relative to comparable companies" and does not hold Tesla.

The iShares S&P 500 Growth ETF, IVW, offers "Exposure to large U.S. companies whose earnings are expected to grow at an above-average rate relative to the market," and holds Tesla as one of its top ten holdings.

Stocks do not become deep value stocks just because they've tanked--despite what Cathie Wood has said about the stocks in ARKK.

It is a growth stock, just one that has tanked lately--after being blown up far beyond reasonable valuations.

It is not a value stock.

[GP813]

Tesla will be a multi-trillion dollar company. The switch to EVs by other automakers won't harm Tesla but solidify their positions. While GM, Toyota, and VW are destroying their legacy businesses to catch up to Tesla, Tesla doesn't have the same baggage. Already Toyota had to admit that their EV plan was totally insufficient and they were at severe disadvantage in the cost of manufacturing EV's compared to Tesla, so they sent their engineers back to the drawing board. Top VW leadership has said the same thing in candid moments. Then there is the fact Tesla is also a storage energy company and will likely be a growing defense contractor. Tesla is a growth company and they have a lot of market to grow into.

Elon Musk is a wildcard but at this point Tesla has enough platform products that a competent manger who can navigate supply chains ala a Tim Cook can probably steward Tesla even better than Musk at this point.

Japan is 100% dependent on oil imports. If EVs were viable for mass market, Toyota would be doing it. Toyota is planning for future sales 50% internal combustion engine.

The latest news say Toyota underestimated the EV adoption market and it's own internal engineering study shows Toyota spends too much money to make an EV compared to Tesla. That is the latest info and it sent Toyota execs scrambling and now there is another engineering internal review to make a better process and compete with Tesla.

Exclusive: Toyota scrambles for EV reboot with eye on Tesla

Tesla will be a multi-trillion dollar company. The switch to EVs by other automakers won't harm Tesla but solidify their positions. While GM, Toyota, and VW are destroying their legacy businesses to catch up to Tesla, Tesla doesn't have the same baggage. Already Toyota had to admit that their EV plan was totally insufficient and they were at severe disadvantage in the cost of manufacturing EV's compared to Tesla, so they sent their engineers back to the drawing board. Top VW leadership has said the same thing in candid moments. Then there is the fact Tesla is also a storage energy company and will likely be a growing defense contractor. Tesla is a growth company and they have a lot of market to grow into.

Elon Musk is a wildcard but at this point Tesla has enough platform products that a competent manger who can navigate supply chains ala a Tim Cook can probably steward Tesla even better than Musk at this point.

Even If true, and they eventually sell as many cars as a VW or GM, why would they be worth 6-8x what those companies are worth now? Or 20x like they were last summer?

These companies are not serious players in energy storage, solar, are terrible at software and will be destroying nearly all their legacy business in ICE vehicles while trying to catchup to an industry leader that already makes EVs cheaper than they can with more profit per vehicle.

[audioengr]

Tesla will be a multi-trillion dollar company. The switch to EVs by other automakers won't harm Tesla but solidify their positions. While GM, Toyota, and VW are destroying their legacy businesses to catch up to Tesla, Tesla doesn't have the same baggage. Already Toyota had to admit that their EV plan was totally insufficient and they were at severe disadvantage in the cost of manufacturing EV's compared to Tesla, so they sent their engineers back to the drawing board. Top VW leadership has said the same thing in candid moments. Then there is the fact Tesla is also a storage energy company and will likely be a growing defense contractor. Tesla is a growth company and they have a lot of market to grow into.

Elon Musk is a wildcard but at this point Tesla has enough platform products that a competent manger who can navigate supply chains ala a Tim Cook can probably steward Tesla even better than Musk at this point.

That is not based in any fact that you could point to.

Tesla's previous valuation is based on FSD (Full Self Driving) becoming an "as promised" Level 5 full automation and Tesla Robo-Taxis work as sold.
This technology is years away - best case scenario. This is well documented.
Ex: https://futurism.com/self-driving-indus ... ng-nowhere

Can Tesla hold the EV market and continue to sell customers on a product that "may" work someday?

If FSD does not become a real product, Tesla's hold over the EV market with decline with each passing year.

There are only so many people capable of buying/financing vehicles where the starting price is $48K.
Base price of Model 3 RWD - no options ($46,990) with Destination Fee ($1200) and Order Fee ($250)
https://www.tesla.com/model3/design#overview

[smooth_rough]

Tesla will be a multi-trillion dollar company. The switch to EVs by other automakers won't harm Tesla but solidify their positions. While GM, Toyota, and VW are destroying their legacy businesses to catch up to Tesla, Tesla doesn't have the same baggage. Already Toyota had to admit that their EV plan was totally insufficient and they were at severe disadvantage in the cost of manufacturing EV's compared to Tesla, so they sent their engineers back to the drawing board. Top VW leadership has said the same thing in candid moments. Then there is the fact Tesla is also a storage energy company and will likely be a growing defense contractor. Tesla is a growth company and they have a lot of market to grow into.

Elon Musk is a wildcard but at this point Tesla has enough platform products that a competent manger who can navigate supply chains ala a Tim Cook can probably steward Tesla even better than Musk at this point.

Japan is 100% dependent on oil imports. If EVs were viable for mass market, Toyota would be doing it. Toyota is planning for future sales 50% internal combustion engine.

The latest news say Toyota underestimated the EV adoption market and it's own internal engineering study shows Toyota spends too much money to make an EV compared to Tesla. That is the latest info and it sent Toyota execs scrambling and now there is another engineering internal review to make a better process and compete with Tesla.

Exclusive: Toyota scrambles for EV reboot with eye on Tesla

Toyota is world's biggest car company. It is global company. They are forcasting slower transition to EVs in developing markets, like Indoneisa and Brazil. The infrastructure isn't in place in most of the world to flip a switch. Tesla might work as single stock for diversifier for your AA. But could be wild ride for core holding for retirement.

[firebirdparts]

My 3 seconds of analysis tells me the PE is 35 now (trailing).

I don't know if we all get to set our own value stock rules or what. I'll say I would call it a value stock at $32 a share. But that's just me.

The trouble is, the headlines are already out there saying that sales are slowing down, as they must inevitably do when you don't update your products. The car business is cruel. You get to a place where you feel like it's sustainable, and then suddenly you catch up with the demand for your old products and have to start over.

[WestCoastPhan]

Are Ford, GM, VW or the other legacy auto makers growing 40+%? Should the relative growth rates factor into valuation?

For example, in 2023 analysts expect Tesla earnings per share to grow 40% to $5.66, with sales up 42% to $118.2 billion. Analysts expect GM revenue next year to be $160 billion, up from $154 billion in 2022, with EPS of $5.97, down from $7.19 in 2022. Do those relative growth rates indicate that the stocks should have the same PE ratio?

[WestCoastPhan]

Gross profit for the 12 months ending 9/30/22:

Tesla: $19.923B (up 84.05% year-over-year)
GM: $18.976B (up 1.06% year-over-year)
Ford: $22.762B (up 18.05% year-over-year)

[sambb]

auto stocks often go bankrupt, as do tech stocks as the market changes. Then again, tech stocks can be very successgul also. Some are exceptions of course. I dont know if tesla, or any tech or auto company will exist in 10 years. I would guess that some will (google, apple), but some people might have said that about yahoo or other tech companies 15 years ago. Lots of auto companies also have had twists and turns. Time will tell, but indexing solves this problem, as you generally incorporate all of this uncertainty into the index.

[WestCoastPhan]

Even If true, and they eventually sell as many cars as a VW or GM, why would they be worth 6-8x what those companies are worth now? Or 20x like they were last summer?

One reason might be that on a per-car basis, Tesla has far better margins: 8x the profit per car that Toyota has: https://asia.nikkei.com/Business/Automo ... ta-per-car

[jebmke]

I was thinking it might go below $100 but now it seems like a sure bet and no apparent bottom. Maybe take a flyer at $10 a share for a thousand shares or so.

[billaster]

Tesla's previous valuation is based on FSD (Full Self Driving) becoming an "as promised" Level 5 full automation and Tesla Robo-Taxis work as sold.
This technology is years away - best case scenario.

Musk himself said just months ago “Full Self Driving is essential. It’s really the difference between Tesla being worth a lot of money or worth basically zero”.

[IMRTguy]

Are Ford, GM, VW or the other legacy auto makers growing 40+%? Should the relative growth rates factor into valuation?

For example, in 2023 analysts expect Tesla earnings per share to grow 40% to $5.66, with sales up 42% to $118.2 billion. Analysts expect GM revenue next year to be $160 billion, up from $154 billion in 2022, with EPS of $5.97, down from $7.19 in 2022. Do those relative growth rates indicate that the stocks should have the same PE ratio?

Exactly. "expect". Those expectations are not worth the paper they're written on.

[Apathizer]

Even If true, and they eventually sell as many cars as a VW or GM, why would they be worth 6-8x what those companies are worth now? Or 20x like they were last summer?

These companies are not serious players in energy storage, solar, are terrible at software and will be destroying nearly all their legacy business in ICE vehicles while trying to catchup to an industry leader that already makes EVs cheaper than they can with more profit per vehicle.

EV technology is highly speculative and expensive. Every major automaker is working on it and we don't know which company or companies will be most successful. From what I've read Tesla vehicle aren't very reliable, so your perspective seems overly optimistic.

We don't even know if EVs will be a practical improvement over hybrid vehicles. Compared to EVs, hybrids are currently less expensive and more reliable. While EVs don't release harmful emissions, mining battery components is environmentally disastrous. Since their batteries are larger and require more electricity to charge than hybrids, EVs might not be significantly more environmentally beneficial either and might wind up being worse.

These are all things to consider. I'm not dismissing them, but considering how speculative, complex and uncertain EV technology is, assuming Tesla will be the dominant EV automaker seems risky.

[SB1234]

This is beginning to look like the greatest financial train wreck in history. So far Tesla is has lost $930 billion in equity wealth from its peak just a year ago, rapidly approaching a trillion dollar loss.

What was notable when Musk was financing his Twitter purchase is that the banks would only loan him 20% on margin using his Tesla shares as collateral. That's 5 dollars of Tesla for every 1 dollar in loans. It's beginning to look like that was a good call by the banks.

Telsa is rapidly approaching the level for a margin call when all heck breaks out. Musk would be forced to liquidate millions of Tesla shares to cover his loans. Musk would end up with no debt but also no Tesla stock -- and a massive tax bill. He could go in the space of a year from world's richest man to one of the -- not so rich. I would guess Musk is sweating bullets at this point.

This is even more entertaining than watching hedge fund managers get scalped by a bunch of kids trading GameStop.

Ha! I was thinking about it just this morning. Smart move indeed by the lenders!

According to this npr article https://www.npr.org/2022/12/02/11402600 ... ples-money elon musk is not on the hook for the 13 billion dollars borrowed for the twitter purchase.

[jebmke]

EV technology is highly speculative and expensive. Every major automaker is working on it and we don't know which company or companies will be most successful.

And unlike toasters, they don't use the same plug.

[WestCoastPhan]

Are Ford, GM, VW or the other legacy auto makers growing 40+%? Should the relative growth rates factor into valuation?

For example, in 2023 analysts expect Tesla earnings per share to grow 40% to $5.66, with sales up 42% to $118.2 billion. Analysts expect GM revenue next year to be $160 billion, up from $154 billion in 2022, with EPS of $5.97, down from $7.19 in 2022. Do those relative growth rates indicate that the stocks should have the same PE ratio?

Exactly. "expect". Those expectations are not worth the paper they're written on.

I'm surprised you discount the 2023 estimates for GM so much, but, OK, use 2022 results. In the 12 months ended 9/30/22, Tesla revenue was $74.836 billion, a 59.8% increase year-over-year. Does that growth rate look comparable to GM or Ford?

[smooth_rough]

Even If true, and they eventually sell as many cars as a VW or GM, why would they be worth 6-8x what those companies are worth now? Or 20x like they were last summer?

These companies are not serious players in energy storage, solar, are terrible at software and will be destroying nearly all their legacy business in ICE vehicles while trying to catchup to an industry leader that already makes EVs cheaper than they can with more profit per vehicle.

EV technology is highly speculative and expensive. Every major automaker is working on it and we don't know which company or companies will be most successful. From what I've read Tesla vehicle aren't very reliable, so your perspective seems overly optimistic.

We don't even know if EVs will be a practical improvement over hybrid vehicles. Compared to EVs, hybrids are currently less expensive and more reliable. While EVs don't release harmful emissions, mining battery components is environmentally disastrous. Since their batteries are larger and require more electricity to charge than hybrids, EVs might not be significantly more environmentally beneficial either and might wind up being worse.

These are all things to consider. I'm not dismissing them, but considering how speculative, complex and uncertain EV technology is, assuming Tesla will be the dominant EV automaker seems risky.

I didn't write that above quote. Comments getting tangled.

[Ed 2]

TSLA is being hammered again today. It is listed in the Growth Index -- but at what point does it really look more like a value stock?

Is VG ever likely to shift indexes for this asset?

I am glad this one started popping . Toyota sold over two million vehicles, Tesla 344 thousands . So, why Tesla any better than Toyota? Shell we compare PE ratios?

[WestCoastPhan]

TSLA is being hammered again today. It is listed in the Growth Index -- but at what point does it really look more like a value stock?

Is VG ever likely to shift indexes for this asset?

I am glad this one started popping . Toyota sold over two million vehicles, Tesla 344 thousands . So, why Tesla any better than Toyota? Shell we compare PE ratios?

"Tesla earned eight times as much profit per vehicle as Toyota Motor in the July-September quarter despite being outsold more than 7 to 1, a Nikkei analysis shows, putting the American electric-vehicle maker ahead in quarterly net profit for the first time since going public in 2010.

Tesla reported a $3.29 billion net profit in that quarter. Toyota earned 434.2 billion yen -- the equivalent of $3.15 billion based on the average exchange rate for the period of 138 yen to the dollar." See https://asia.nikkei.com/Business/Automo ... ta-per-car

Do you think that's a relevant factor?

[Apathizer]

Even If true, and they eventually sell as many cars as a VW or GM, why would they be worth 6-8x what those companies are worth now? Or 20x like they were last summer?

These companies are not serious players in energy storage, solar, are terrible at software and will be destroying nearly all their legacy business in ICE vehicles while trying to catchup to an industry leader that already makes EVs cheaper than they can with more profit per vehicle.

EV technology is highly speculative and expensive. Every major automaker is working on it and we don't know which company or companies will be most successful. From what I've read Tesla vehicle aren't very reliable, so your perspective seems overly optimistic.

We don't even know if EVs will be a practical improvement over hybrid vehicles. Compared to EVs, hybrids are currently less expensive and more reliable. While EVs don't release harmful emissions, mining battery components is environmentally disastrous. Since their batteries are larger and require more electricity to charge than hybrids, EVs might not be significantly more environmentally beneficial either and might wind up being worse.

These are all things to consider. I'm not dismissing them, but considering how speculative, complex and uncertain EV technology is, assuming Tesla will be the dominant EV automaker seems risky.

I didn't write that above quote. Comments getting tangled.

Sorry, I fixed it.

[Ed 2]

TSLA is being hammered again today. It is listed in the Growth Index -- but at what point does it really look more like a value stock?

Is VG ever likely to shift indexes for this asset?

I am glad this one started popping . Toyota sold over two million vehicles, Tesla 344 thousands . So, why Tesla any better than Toyota? Shell we compare PE ratios?

"Tesla earned eight times as much profit per vehicle as Toyota Motor in the July-September quarter despite being outsold more than 7 to 1, a Nikkei analysis shows, putting the American electric-vehicle maker ahead in quarterly net profit for the first time since going public in 2010.

Tesla reported a $3.29 billion net profit in that quarter. Toyota earned 434.2 billion yen -- the equivalent of $3.15 billion based on the average exchange rate for the period of 138 yen to the dollar." See https://asia.nikkei.com/Business/Automo ... ta-per-car

Do you think that's a relevant factor?

I’ve seen those numbers too. So, you agree then TSLA is overpriced still? I think so . I mean about stock valuations and TSLA still overvalued compare to other car companies. Look and compare PE ratios of both companies.

[smooth_rough]

TSLA is being hammered again today. It is listed in the Growth Index -- but at what point does it really look more like a value stock?

Is VG ever likely to shift indexes for this asset?

I am glad this one started popping . Toyota sold over two million vehicles, Tesla 344 thousands . So, why Tesla any better than Toyota? Shell we compare PE ratios?

"Tesla earned eight times as much profit per vehicle as Toyota Motor in the July-September quarter despite being outsold more than 7 to 1, a Nikkei analysis shows, putting the American electric-vehicle maker ahead in quarterly net profit for the first time since going public in 2010.

Tesla reported a $3.29 billion net profit in that quarter. Toyota earned 434.2 billion yen -- the equivalent of $3.15 billion based on the average exchange rate for the period of 138 yen to the dollar." See https://asia.nikkei.com/Business/Automo ... ta-per-car

Do you think that's a relevant factor?

Yeah ok I read that twice now. Toyota is mass market. Tesla is niche market. Maybe different vision for the future.

[WestCoastPhan]

TSLA is being hammered again today. It is listed in the Growth Index -- but at what point does it really look more like a value stock?

Is VG ever likely to shift indexes for this asset?

I am glad this one started popping . Toyota sold over two million vehicles, Tesla 344 thousands . So, why Tesla any better than Toyota? Shell we compare PE ratios?

"Tesla earned eight times as much profit per vehicle as Toyota Motor in the July-September quarter despite being outsold more than 7 to 1, a Nikkei analysis shows, putting the American electric-vehicle maker ahead in quarterly net profit for the first time since going public in 2010.

Tesla reported a $3.29 billion net profit in that quarter. Toyota earned 434.2 billion yen -- the equivalent of $3.15 billion based on the average exchange rate for the period of 138 yen to the dollar." See https://asia.nikkei.com/Business/Automo ... ta-per-car

Do you think that's a relevant factor?

I’ve seen those numbers too. So, you agree then TSLA is overpriced still? I think so . I mean about stock valuations and TSLA still overvalued compare to other car companies. Look and compare PE ratios of both companies.

I'm not going to put any substantial money into individual stocks, but I think Tesla is no longer overpriced, given it's growth rate and profitability. And I think growth rate and profitability matter. I also think the mental image of Tesla in the minds of most people doesn't match its current scale -- for example, it may pass GM in revenue within the next two years.

[billaster]

According to this npr article https://www.npr.org/2022/12/02/11402600 ... ples-money elon musk is not on the hook for the 13 billion dollars borrowed for the twitter purchase.

That $13 billion from the banks is only one tranche of the $44 billion purchase. Another $12.5 billion is from a margin loan to Musk secured by $62.5 billion (at the time of purchase) in Tesla stock. That collateral is worth a lot less now.

[Ed 2]

TSLA is being hammered again today. It is listed in the Growth Index -- but at what point does it really look more like a value stock?

Is VG ever likely to shift indexes for this asset?

I am glad this one started popping . Toyota sold over two million vehicles, Tesla 344 thousands . So, why Tesla any better than Toyota? Shell we compare PE ratios?

"Tesla earned eight times as much profit per vehicle as Toyota Motor in the July-September quarter despite being outsold more than 7 to 1, a Nikkei analysis shows, putting the American electric-vehicle maker ahead in quarterly net profit for the first time since going public in 2010.

Tesla reported a $3.29 billion net profit in that quarter. Toyota earned 434.2 billion yen -- the equivalent of $3.15 billion based on the average exchange rate for the period of 138 yen to the dollar." See https://asia.nikkei.com/Business/Automo ... ta-per-car

Do you think that's a relevant factor?

I’ve seen those numbers too. So, you agree then TSLA is overpriced still? I think so . I mean about stock valuations and TSLA still overvalued compare to other car companies. Look and compare PE ratios of both companies.

I'm not going to put any substantial money into individual stocks, but I think Tesla is no longer overpriced, given it's growth rate and profitability. And I think growth rate and profitability matter. I also think the mental image of Tesla in the minds of most people doesn't match its current scale -- for example, it may pass GM in revenue within the next two years.

Maybe you know more what market doesn’t? I remember similar voices regarding Cisco back in 90s.
Good luck, Ed

[vitaflo]

Toyota sells 10mm cars a year, market cap is $220 billion
Tesla sells around 3mm cars this year, market cap is $353 billion

Tesla isn't going to sell 3m cars this year. They didn't even reach 1m at the end of Q3.

[Ed 2]

Toyota sells 10mm cars a year, market cap is $220 billion
Tesla sells around 3mm cars this year, market cap is $353 billion

Tesla isn't going to sell 3m cars this year. They didn't even reach 1m at the end of Q3.

The whole concept to sell overpriced vehicles to rich folks to save on gas boggles my mind. Anyway, never understood the whole euphoria around Tesla stock last year. Became a religion.

[jebmke]

The whole concept to sell overpriced vehicles to rich folks to save on gas boggles my mind. Anyway, never understood the whole euphoria around Tesla stock last year. Became a religion.

The new Harley. I met the marketing VP of Harley at an event years ago and he told me that H-D positioned its product as "jewelry" not motorcycles.

[Ed 2]

The whole concept to sell overpriced vehicles to rich folks to save on gas boggles my mind. Anyway, never understood the whole euphoria around Tesla stock last year. Became a religion.

The new Harley. I met the marketing VP of Harley at an event years ago and he told me that H-D positioned its product as "jewelry" not motorcycles.

If you equate Tesla to Harley I would disagree. I think Ferrari or Ford Mustang most likely. I couldn’t find anything classic in Tesla models.

[vitaflo]

Even If true, and they eventually sell as many cars as a VW or GM, why would they be worth 6-8x what those companies are worth now? Or 20x like they were last summer?

One reason might be that on a per-car basis, Tesla has far better margins: 8x the profit per car that Toyota has: https://asia.nikkei.com/Business/Automo ... ta-per-car

Probably because Tesla doesn't have to spend billions designing engines. Tesla can sell at a premium (shiny cool tech) with less expenditures for everything else in the car (besides battery tech). Once traditional auto makers add their own EV platforms they'll either also be able to reap a similar profit or be able to drastically compete on price.

Cars are becoming appliances. It's like when TV's went from tubes to flat screens. When flat screens were new they were super expensive. Now they are ubiquitous and you can buy flat panels for pretty cheap because they are easier to make than old tube TV's with less parts. EV's will end up being the same.

[jebmke]

The whole concept to sell overpriced vehicles to rich folks to save on gas boggles my mind. Anyway, never understood the whole euphoria around Tesla stock last year. Became a religion.

The new Harley. I met the marketing VP of Harley at an event years ago and he told me that H-D positioned its product as "jewelry" not motorcycles.

If you equate Tesla to Harley I would disagree. I think Ferrari or Ford Mustang most likely. I couldn’t find anything classic in Tesla models.

me neither but if you removed the identification from a Tesla would people still buy it at current prices?

[jebmke]

Even If true, and they eventually sell as many cars as a VW or GM, why would they be worth 6-8x what those companies are worth now? Or 20x like they were last summer?

One reason might be that on a per-car basis, Tesla has far better margins: 8x the profit per car that Toyota has: https://asia.nikkei.com/Business/Automo ... ta-per-car

Probably because Tesla doesn't have to spend billions designing engines. Tesla can sell at a premium (shiny cool tech) with less expenditures for everything else in the car (besides battery tech). Once traditional auto makers add their own EV platforms they'll either also be able to reap a similar profit or be able to drastically compete on price.

Cars are becoming appliances. It's like when TV's went from tubes to flat screens. When flat screens were new they were super expensive. Now they are ubiquitous and you can buy flat panels for pretty cheap because they are easier to make than old tube TV's with less parts. EV's will end up being the same.

Is any of Tesla's income from carbon credits still? I haven't really paid any attention.

[Ed 2]

Even If true, and they eventually sell as many cars as a VW or GM, why would they be worth 6-8x what those companies are worth now? Or 20x like they were last summer?

One reason might be that on a per-car basis, Tesla has far better margins: 8x the profit per car that Toyota has: https://asia.nikkei.com/Business/Automo ... ta-per-car

Probably because Tesla doesn't have to spend billions designing engines. Tesla can sell at a premium (shiny cool tech) with less expenditures for everything else in the car (besides battery tech). Once traditional auto makers add their own EV platforms they'll either also be able to reap a similar profit or be able to drastically compete on price.

Cars are becoming appliances. It's like when TV's went from tubes to flat screens. When flat screens were new they were super expensive. Now they are ubiquitous and you can buy flat panels for pretty cheap because they are easier to make than old tube TV's with less parts. EV's will end up being the same.

Is any of Tesla's income from carbon credits still? I haven't really paid any attention.

Have you seen Volvo EV?

[cchrissyy]

...
So really it comes down to whether Tesla can change the automotive industry into something it isn't now. So far, they have, but I don't think it will continue.
...
- Tesla is very profitable. For instance, Tesla makes a big profit from FSD, but the purchase rate is declining.
...

thanks for the laugh! no doubt that selling people some optional vaporware at $10k per car is good for cooperate profitability!
i really like my car. but not the company pre-selling a service they haven't truly built yet.

to tie this back to the stock price, i think the twitter meltdown has revealed to customers and investors that the leader is more of a hustler or a media character than he is an engineer or business leader. which means fewer of us will buy that FSD subscription or the stock, respectively.

[jebmke]

Even If true, and they eventually sell as many cars as a VW or GM, why would they be worth 6-8x what those companies are worth now? Or 20x like they were last summer?

One reason might be that on a per-car basis, Tesla has far better margins: 8x the profit per car that Toyota has: https://asia.nikkei.com/Business/Automo ... ta-per-car

Probably because Tesla doesn't have to spend billions designing engines. Tesla can sell at a premium (shiny cool tech) with less expenditures for everything else in the car (besides battery tech). Once traditional auto makers add their own EV platforms they'll either also be able to reap a similar profit or be able to drastically compete on price.

Cars are becoming appliances. It's like when TV's went from tubes to flat screens. When flat screens were new they were super expensive. Now they are ubiquitous and you can buy flat panels for pretty cheap because they are easier to make than old tube TV's with less parts. EV's will end up being the same.

Is any of Tesla's income from carbon credits still? I haven't really paid any attention.

Have you seen Volvo EV?

Probably. I don’t notice cars unless they are hogging a parking place.

[SB1234]

According to this npr article https://www.npr.org/2022/12/02/11402600 ... ples-money elon musk is not on the hook for the 13 billion dollars borrowed for the twitter purchase.

That $13 billion from the banks is only one tranche of the $44 billion purchase. Another $12.5 billion is from a margin loan to Musk secured by $62.5 billion (at the time of purchase) in Tesla stock. That collateral is worth a lot less now.

But since the first announcing plans to buy Twitter in April he has sold a total of $22.9 billion worth of Tesla stock.

source : https://www.cnn.com/2022/12/15/investin ... index.html

[WestCoastPhan]

I am glad this one started popping . Toyota sold over two million vehicles, Tesla 344 thousands . So, why Tesla any better than Toyota? Shell we compare PE ratios?

"Tesla earned eight times as much profit per vehicle as Toyota Motor in the July-September quarter despite being outsold more than 7 to 1, a Nikkei analysis shows, putting the American electric-vehicle maker ahead in quarterly net profit for the first time since going public in 2010.

Tesla reported a $3.29 billion net profit in that quarter. Toyota earned 434.2 billion yen -- the equivalent of $3.15 billion based on the average exchange rate for the period of 138 yen to the dollar." See https://asia.nikkei.com/Business/Automo ... ta-per-car

Do you think that's a relevant factor?

I’ve seen those numbers too. So, you agree then TSLA is overpriced still? I think so . I mean about stock valuations and TSLA still overvalued compare to other car companies. Look and compare PE ratios of both companies.

I'm not going to put any substantial money into individual stocks, but I think Tesla is no longer overpriced, given it's growth rate and profitability. And I think growth rate and profitability matter. I also think the mental image of Tesla in the minds of most people doesn't match its current scale -- for example, it may pass GM in revenue within the next two years.

Maybe you know more what market doesn’t? I remember similar voices regarding Cisco back in 90s.
Good luck, Ed

I'm not following the logic. My statement is in line with saying the market is now accurately pricing Tesla ("no longer overpriced"). It is those who think it is worth far less than the market says it is -- $10 per share, for example -- who think they know more than the market, right?

[billaster]

Tesla lost $44 billion today, a Twitter in value. And 21 Twitters lost in the last year.

[GP813]

Even If true, and they eventually sell as many cars as a VW or GM, why would they be worth 6-8x what those companies are worth now? Or 20x like they were last summer?

These companies are not serious players in energy storage, solar, are terrible at software and will be destroying nearly all their legacy business in ICE vehicles while trying to catchup to an industry leader that already makes EVs cheaper than they can with more profit per vehicle.

EV technology is highly speculative and expensive. Every major automaker is working on it and we don't know which company or companies will be most successful. From what I've read Tesla vehicle aren't very reliable, so your perspective seems overly optimistic.

We don't even know if EVs will be a practical improvement over hybrid vehicles. Compared to EVs, hybrids are currently less expensive and more reliable. While EVs don't release harmful emissions, mining battery components is environmentally disastrous. Since their batteries are larger and require more electricity to charge than hybrids, EVs might not be significantly more environmentally beneficial either and might wind up being worse.

These are all things to consider. I'm not dismissing them, but considering how speculative, complex and uncertain EV technology is, assuming Tesla will be the dominant EV automaker seems risky.

I'm sorry but your post is filled with outdated thinking and outright falsehoods. The price of EV's is falling if you look at a cost curve. Mining minerals for battery packs is less environmentally disastrous than extracting fossil fuels which are combustible and can not be recovered in any economical way. Once you mine minerals for a battery pack they have a expected working life of at least 8 to 10 years and many surpass that. Many different entrepreneurs are also trying to dial in the process to recover minerals from battery packs no longer usable for vehicles.

EV technology is inevitable, even if there is a hydrogen breakthrough which is doubtful that "fuel source" will power an electric vehicle. A huge study just showed that current EVs also don't stress the energy grid but in fact make it work more efficiently as EVs are mostly charged off hours.

Study: Electric cars make utility bills cheaper for everyone

[GP813]

Electric Vehicle Myths


According to the EPA

Myth #1: Electric vehicles are worse for the climate than gasoline cars because of the power plant emissions.
Myth #2: Electric vehicles are worse for the climate than gasoline cars because of battery manufacturing.
Myth #3: There is nowhere to charge.
Myth #4: Electric vehicles don’t have enough range to handle daily travel demands.
Myth #5: Electric vehicles only come as sedans.
Myth #6: Electric vehicles are not as safe as comparable gasoline vehicles.

[jebmke]

I'm not following the logic. My statement is in line with saying the market is now accurately pricing Tesla ("no longer overpriced"). It is those who think it is worth far less than the market says it is -- $10 per share, for example -- who think they know more than the market, right?

I haven't seen any FMV estimates of $10, have you?

[billaster]

According to this npr article https://www.npr.org/2022/12/02/11402600 ... ples-money elon musk is not on the hook for the 13 billion dollars borrowed for the twitter purchase.

That $13 billion from the banks is only one tranche of the $44 billion purchase. Another $12.5 billion is from a margin loan to Musk secured by $62.5 billion (at the time of purchase) in Tesla stock. That collateral is worth a lot less now.

But since the first announcing plans to buy Twitter in April he has sold a total of $22.9 billion worth of Tesla stock.

source : https://www.cnn.com/2022/12/15/investin ... index.html

Yes, and Musk and others put in cash as the third tranche in the deal. So $13 billion from the banks, $12.5 billion on Musk's margin loan, and the rest, some $21 billion, cash from Musk and other investors.

[GT99]

to tie this back to the stock price, i think the twitter meltdown has revealed to customers and investors that the leader is more of a hustler or a media character than he is an engineer or business leader. which means fewer of us will buy that FSD subscription or the stock, respectively.

Wouldn't it make a ton more sense that the opposite is true? Whatever you think of the guy as a person, he has built multiple companies that have achieved things nobody else could do. The more logical explanation is that he's an exceptional engineer and leader but he's a terrible media character and hustler. Given the fact that he's on the autism spectrum, that makes a ton of sense. Most of his mistakes are related to opening his mouth to the media (and that whole "buying Twitter" thing ). The guy needs to get out of the media (and not spread himself so thin).

[GT99]

Even If true, and they eventually sell as many cars as a VW or GM, why would they be worth 6-8x what those companies are worth now? Or 20x like they were last summer?

One reason might be that on a per-car basis, Tesla has far better margins: 8x the profit per car that Toyota has: https://asia.nikkei.com/Business/Automo ... ta-per-car

Probably because Tesla doesn't have to spend billions designing engines. Tesla can sell at a premium (shiny cool tech) with less expenditures for everything else in the car (besides battery tech). Once traditional auto makers add their own EV platforms they'll either also be able to reap a similar profit or be able to drastically compete on price.

Cars are becoming appliances. It's like when TV's went from tubes to flat screens. When flat screens were new they were super expensive. Now they are ubiquitous and you can buy flat panels for pretty cheap because they are easier to make than old tube TV's with less parts. EV's will end up being the same.

It will be very difficult for traditional automakers to compete on price apples to apples until they change the model of their sales channels. Not having externally owned dealerships and service centers is a big advantage for Tesla (and other newbies like Rivian).

[Mountain Doc]

Tesla lost $44 billion today, a Twitter in value. And 21 Twitters lost in the last year.

And Twitter isn't worth anywhere near $44 billion, so maybe more like 42 Twitters