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> Tesla is a $45B company right now. ... BMW is $56B (1.2x) What's the likelihood that Tesla is the next BMW? It's low. This here. BMW makes more in profit th

by ralfd 10y ago

> Tesla is a $45B company right now. ... BMW is $56B (1.2x) What's the likelihood that Tesla is the next BMW? It's low. This here. BMW makes more in profit than Tesla is earning in revenue. BMW sells 2.5 million cars a year, 25 times as many as Tesla. And both companies are valued roughly the same? How? Totally overvalued. If Tesla catches up to BMW 25x output (and this is a big If) would it then be worth a trillion dollar? No this is already priced into the stock. > Musk has said that making electric cars is easier than making internal combustion ones. So, if Musk shows that electric cars can be profitable, won't everyone else add a huge amount of competition? CWhat is not easy to make is a self-driving car and Teslas battery-Gigafactory also an advantage. Still the statement that an electric car is simple is troubling for a luxury/premium brand. You generally don't want to be in a market where things are easy to make and there is disruption by a race-to-the-bottom. I think the big car makers are more at risk having their lunch eaten by upcoming cheap car makers in China or India than Tesla.

Retric 10y ago
The car industry is about more than just the big car companies as suppliers are huge. Takata, BMW's airbag manufacture among other things is also worth 45B in part from a slice of those BMW sales. Tesla is like BMW + some BMW suppliers. In that way Tesla is really 4 companies right now, a car company, a component supplier to Toyota and others, a battery company, and a solar company. Energizer is worth 3.3B and has 5,000 workers. Solar city is 'worth' ~$6 billion. Thus, directly comparing Tesla to BMW is missing the boat.
ansible 10y ago
One factor to consider is that BMW is heavily invested in current fossil-fuel powered vehicles. If there is a big shift overall to electric then the capital expenditures that BMW has already made aren't so valuable. Yes, they (BMW) are indeed making money now. But have they invested in the right direction? I don't know. Allegedly the market does (as reflected in the relative stock prices)... but the market is often stupid. It is often smart too, but it can sometimes be hard to tell.
- princeb 10y ago
  > BMW is heavily invested in current fossil-fuel powered vehicles isn't BMW behind the proposed european standard for electric vehicle charging?
  - ansible 10y ago
    The point I was trying to make though is that most of their infrastructure is currently dedicated to gasoline powered vehicles. That may, or may not turn out to have a good return on investment, and may be factored into their share price.
peripitea 10y ago
>This here. BMW makes more in profit than Tesla is earning in revenue. BMW sells 2.5 million cars a year, 25 times as many as Tesla. And both companies are valued roughly the same? How? Totally overvalued. Are you familiar with how companies are valued? You only seem to be factoring in present considerations. What might happen in the future is a major factor in determining these prices, especially in an industry with so much potential upheaval not too far away. (e.g. what if Tesla profits are 10x BMW's in 20 years? Then they are probably undervalued right now.) If you are confident in your assessment though, you can always put money behind it and make yourself rich.

by ralfd 10y ago

Retric 10y ago

The car industry is about more than just the big car companies as suppliers are huge. Takata, BMW's airbag manufacture among other things is also worth 45B in part from a slice of those BMW sales. Tesla is like BMW + some BMW suppliers. In that way Tesla is really 4 companies right now, a car company, a component supplier to Toyota and others, a battery company, and a solar company. Energizer is worth 3.3B and has 5,000 workers. Solar city is 'worth' ~$6 billion. Thus, directly comparing Tesla to BMW is missing the boat.

ansible 10y ago

One factor to consider is that BMW is heavily invested in current fossil-fuel powered vehicles. If there is a big shift overall to electric then the capital expenditures that BMW has already made aren't so valuable. Yes, they (BMW) are indeed making money now. But have they invested in the right direction? I don't know. Allegedly the market does (as reflected in the relative stock prices)... but the market is often stupid. It is often smart too, but it can sometimes be hard to tell.

princeb 10y ago
> BMW is heavily invested in current fossil-fuel powered vehicles isn't BMW behind the proposed european standard for electric vehicle charging?
- ansible 10y ago
  The point I was trying to make though is that most of their infrastructure is currently dedicated to gasoline powered vehicles. That may, or may not turn out to have a good return on investment, and may be factored into their share price.

peripitea 10y ago

>This here. BMW makes more in profit than Tesla is earning in revenue. BMW sells 2.5 million cars a year, 25 times as many as Tesla. And both companies are valued roughly the same? How? Totally overvalued. Are you familiar with how companies are valued? You only seem to be factoring in present considerations. What might happen in the future is a major factor in determining these prices, especially in an industry with so much potential upheaval not too far away. (e.g. what if Tesla profits are 10x BMW's in 20 years? Then they are probably undervalued right now.) If you are confident in your assessment though, you can always put money behind it and make yourself rich.