30 ms·

Interesting, but market cap isn’t everything - FTA: "While Tesla’s market capitalization has swelled in size, Ford still overshadows the Palo Alto, California-

by dan1234 10y ago

Interesting, but market cap isn’t everything - FTA: "While Tesla’s market capitalization has swelled in size, Ford still overshadows the Palo Alto, California-based company in most other financial metrics. Over the last five years, Ford has posted net income totaling $26 billion, while Tesla has lost $2.3 billion. Last year, Ford had annual revenue of $151.8 billion compared with Tesla’s $7 billion. And when it comes to car sales, Tesla sold 40,697 vehicles in the U.S. last year, according to researcher IHS Markit. Ford sells that many F-Series trucks in the U.S. about every three weeks."

toomuchtodo 10y ago
> And when it comes to car sales, Tesla sold 40,697 vehicles in the U.S. last year, according to researcher IHS Markit. Ford sells that many F-Series trucks in the U.S. about every three weeks." How much stationary energy storage did Ford sell last year? "Tesla CTO: our energy storage is growing as fast as we can humanly scale it [Gallery of new Powerpack station]" https://electrek.co/2017/01/30/tesla-cto-energy-storage-growing-as-fast-as-we-can-humanly-scale-it-gallery-powerpack-station/ https://electrek.co/2017/01/30/tesla-cto-energy-storage-grow... Disclaimer: Own a bunch of TSLA.
- baloneyman 10y ago
  This time it's different! This time bubbly companies with no earnings and tons of debt will create a new paradigm! Lol
  - Symmetry 10y ago
    It might very well be overprices (I sold because I think it is) but they got $7B in revenue in 2016 which is hardly no earnings. They make money on every car they sell so it would be pretty straightforward for them to decide to become profitable at the expense of growth and R&D. Now, their stock price assumes they're going to conquer the world rather than settle down to become a profitable small car manufacturer and solar/battery provider so lots of investors would lose their shirts if that happened. But it's an option for the company which makes them very different from the pets.coms of the world.
    - baloneyman 10y ago
      Revenue is nice, but earnings are all that matters when you have debts to pay. Just look over to the recently IPOed Snap, Inc. for a company with less revenue and more eyeballs!
- tptacek 10y ago
  I don't know. How much money does TSLA make selling stationary energy storage?
- iaw 10y ago
  More than Tesla: http://www.fordpower.cc/products.aspx?cateid=18 http://www.fordpower.cc/products.aspx?cateid=18
  - toomuchtodo 10y ago
    Actual laughter was produced at a generator product page. Fuel has a marginal cost. Stationary battery storage soaks up power when power is cheap, releases it when the cost is higher and energy demand is higher and has a 10 year minimum life.
    - iaw 10y ago
      > Actual laughter was produced at a generator product page. You must be a blast at cocktail parties then. >Stationary battery storage soaks up power when power is cheap, releases it when the cost is higher and energy demand is higher and has a 10 year minimum life I think you're making a few unsubstantiated assumptions here. Primarily that the cost differential in electricity (or the availability of renewables) is broad enough for the Tesla tech to be significantly profitable. I ran the numbers: a Tesla PW2 gives you ~20.3MWh throughout it's useful life for $5500 limited by power availability and recharge rate. A slightly more powerful Ford generator at $1500 with $4000 worth of diesel fuel would yield ~8.9MWh of anytime power with the ability to run on waste oils and a comparatively perpetual lifespan. So, 44% the power cost with a power wall but a substantially higher upfront cost, a considerably lower salvage value, and a number of restrictions on it's usage (hope you don't need power during sustained outages in the Northeast). Any more chuckles?
      - toomuchtodo 10y ago
        "SolarCity developed a microgrid with 1.4 megawatts of solar generation capacity — enough to power nearly 100% of the island, according to a SolarCity blog posted on Tuesday. The microgrid is enabled by 60 Tesla Powerpacks, the company's large commercial battery, which can store solar energy at night." http://www.businessinsider.com/tesla-powers-tau-in-american-samoa-with-solar-powerpack-2016-11 http://www.businessinsider.com/tesla-powers-tau-in-american-... "The Kauai project consists of a 52 megawatt-hour battery installation plus a 13 megawatt SolarCity solar farm. Tesla and the Kauai Island Utility Cooperative, the power company that ordered the project, believe the project will reduce fossil fuel usage by 1.6 million gallons per year." http://www.theverge.com/2017/3/8/14854858/tesla-solar-hawaii-kauai-kiuc-powerpack-battery-generator http://www.theverge.com/2017/3/8/14854858/tesla-solar-hawaii... "On Thursday, Tesla announced that it had been chosen “through a competitive process” to supply utility company Southern California Edison with 20 MW (or 80 MWh) of battery storage. In May, regulators ordered Southern California Edison to invest in utility-scale battery networks after natural gas provider SoCal Gas leaked 1.6 million pounds of methane into the atmosphere when a well ruptured at its Aliso Canyon Natural Gas Storage Facility." https://arstechnica.com/business/2016/09/socal-utility-will-buy-80mwh-of-battery-storage-from-tesla-after-methane-leak/ https://arstechnica.com/business/2016/09/socal-utility-will-... "California will shortly bring more Tesla energy storage systems online in Southern California Edison’s (SCE’s) service area. The 50 MW projects (utilizing Tesla’s Powerpack 2) are conducted by Macquarie Capital, the corporate advisory, capital markets and principal investing arm of Macquarie Group (a global finance corporation)." http://insideevs.com/southern-california-edison-to-bring-online-50-mw-tesla-powerpack-2-system/ http://insideevs.com/southern-california-edison-to-bring-onl... "With the confidence of a well-oiled pizza shop, Elon Musk “seriously” said that Tesla could deliver a more than 100 MWh Powerpack project to Australia in 100 days – or it will be free." ... "Considering a large part of the 100 days will be for shipping the Powerpacks and other equipment from Nevada to Australia and then installing those packs, I wouldn’t be surprised if it means that Tesla and Panasonic already have a capacity of over 100 MWh per month at the Gigafactory. That’s a significant 1.2 GWh annualized rate." https://electrek.co/2017/03/10/tesla-gigafactory-elon-musk-confidence-battery-production/ https://electrek.co/2017/03/10/tesla-gigafactory-elon-musk-c... I bought my TSLA at $17/share. I am chuckling all the way to the bank.
adamnemecek 10y ago
Investors invest based on promise of future value. How much is Ford expected to grow?
- John23832 10y ago
  If they can properly pivot into the electric car market, a lot. Ford has all the infrastructure that Tesla is attempting to build now (aside from the batteries, but that is something that Ford could easily partner with another manufacture to get). They know how to mass produce cars (granted right now, ICE cars). That's not an easy feat. They have a large manufacturing and maintenance base that, frankly, Tesla can't replicate. The bet is that Tesla will be the first successful company to market, or that they will hold some patents which will prove valuable in the future. The market is not betting that they'll beat Ford or GM.
  - adamnemecek 10y ago
    What infrastructure do you have in mind? Factories?
    - John23832 10y ago
      Factories, dealerships, a maintenance network, etc.
      - adamnemecek 10y ago
        I can't imagine that all of those will remain usable and competitive without major investments. Note that doesn't need dealerships.
        John23832 10y ago
        Of course Ford would make investments to stay viable... that's how business works.
  - stellar678 10y ago
Shivetya 10y ago
it is what you concentrate on when your other numbers don't look so good. The 3 is going to be a real test here. Not that they can make the car but that those expecting to get one at 35k actually get one and on a timely basis. Then throw in, is there any profit at that price point when factoring in all related costs?
- mikeash 10y ago
  I doubt there will be much profit at $35,000, at least not for a while. But does there need to be? As long as it's profitable on average, the base model can just break even. I bet a lot of buyers will pay for the Autopilot option, for example, and that's pure profit.
tommoor 10y ago
Ford also had 3 large vehicle recalls last week alone
Spooky23 10y ago
The market makes mistakes over value all of the time. Look at the sad tale of post-bankruptcy Kmart, and how they used hype, valuation and newly available credit to gobble up Sears. Predicable trainwreck ensued. Tesla is alike and different. They have an amazing management team, Apple-like religious fervor/hype machine, but a marginal product category. Their continued growth is only possible as long as they can convince people that they aren't a commodity like any of the 50 other car companies.
- samstave 10y ago
  Interesting comment. I'd say that the way they are convincing the public is with a very well engineered product line that is also a big fuck-you to big-oil. The only people that like big-oil are the people who work for and profit off big oil. Musks empire is growing in ways ford could only dream of. People love the machines they make. Ford can add body stylings all they want, but they can't match tesla or spacex or solar city. I just don't think they have it in their DNA - I'm actually surprised we haven't heard of any of the big three going all out attempting to acquire tesla. What would be a very interesting event would be when Tessa builds a long haul delivery truck/trucks in general. There is no way they haven't thought of a general platform chassis which can have modular tops put on them. Wouldn't it be great if tesla sold a chassis to boutique shops like there were in the 20s...
  - alasdair_ 10y ago
    >I'm actually surprised we haven't heard of any of the big three going all out attempting to acquire tesla. I'm not. The big three don't have enough cash to pay the market cap multiple needed to gain control, especially now that Tesla is bigger than Ford. No sane lender would loan the money to one of the big three to do it either - first, the money would be better spent just buying Tesla stock and second, there is no way that Tesla would be run better by pulling it into one of the big three car comnpanies, none of which have a strong non-incremental innovation culture.
  - Spooky23 10y ago
    Most people don't care about sending a "fuck you" to anyone. They just want a car. When electric has a positive ROI, it will be just another drivetrain from Ford.
dsugarman 10y ago
Tesla is potentially a trillion dollar company and it's biggest current hurdle is getting it's production up to meet an enormous demand. The reason it's trading at a higher market cap is because Ford doesn't have any growth potential and Tesla is still trading at a fraction of what it could be. Of course there is still a ton of risk factors for them, but expected value for investing should be based on the chance of success * potential future value over a variety of possible outcomes.
- Alupis 10y ago
  > Tesla is potentially a trillion dollar company A trillion dollars? For a niche/luxury car company? What fantasy is that based on? > it's biggest current hurdle is getting it's production up to meet an enormous demand While enormous to Tesla, actual demand is pretty small compared to other car companies. It doesn't help that even the most "affordable" Tesla is far more expensive than the average competitor's EV or hybrid vehicle[1][2], let alone it's base price (not final sale price) starts off above the average new car purchase price (final sale, after upgrades, etc) for the entire industry[3]. There's a lot of hype around Tesla, but that doesn't mean they're going to take over the auto industry, let alone become larger than the largest auto makers around who produce "Everyday Joe" cars for the rest of the population. [1] http://evobsession.com/10-best-electric-cars/ http://evobsession.com/10-best-electric-cars/ [2] http://www.caranddriver.com/best-hybrid-electric-cars http://www.caranddriver.com/best-hybrid-electric-cars [3] http://mediaroom.kbb.com/new-car-transaction-prices-up-2-percent-march-2016 http://mediaroom.kbb.com/new-car-transaction-prices-up-2-per...
  - sillysaurus3 10y ago
    If batteries reduce the demand for oil, oil's value will start to transfer to batteries.
    - Alupis 10y ago
      > If batteries reduce the demand for oil That's a big IF. Also, it ignores the fact that every car manufacturer already has a plethora of fully electric, or hybrid models available (and they are, on average, far cheaper than the cheapest base model Tesla can offer), and the markets still don't buy them. This also ignores the fact that many companies make great batteries, and Tesla is only recently sitting down to that table. Why wouldn't Panasonic be that "trillion dollar" company? Or Sony? Or Fujitsu?
crabasa 10y ago
> Over the last five years, Ford has posted net income totaling $26 billion, while Tesla has lost $2.3 billion. Ford: "We have no idea how to invest this money. I guess let's just put it in the bank." Tesla: "We have so many idea for investments, we're only constrained by cash. Let's go back to the capital markets!"
- oculusthrift 10y ago
  except ford is spending an order of magnitude more than tesla. it's much easier to spend 100 dollars meaningfully than a 100 billion. I also hope you're willing to level the same charge at Google and Apple.
  - seanmcdirmid 10y ago
    It is like comparing a spunky startup to an entrenched corporation. Ya, IBM once spent more than Facebook, but Facebook was worth more because it had potential while IBM didn't. Ford doesn't have any good ideas for the future, they are too busy with the here and now and haven't shown an ability to do anything but incremental improvements with their R&D spending. Like we don't expect much more from IBM, we don't expect much more from Ford, but we do from Tesla.
    - dkrich 10y ago
      What is this based on? Ford has had record profits over the past few years and has continually improved their vehicles and manufacturing processes, including remaking two assembly plants to make aluminum body F 150s. They also invested a billion dollars in Arvo AI and are making aggressive moves into self driving technology.
      - sqeaky 10y ago
        An aluminum body is exactly the kind of iteration that was being talked about. It is neat, but its not and all new drive train on a totally different tech. Aluminium is a pretty well understood material, while self driving cars are virgin territory. Tesla is making larger swings and potentially accepting larger risk. Ford is... iterating.
drzaiusapelord 10y ago
and... this is how bubbles happen. Investors and fans say "but, but my stock isn't overvalued! Mine is the exception, its everyone else who is in the bubble!" There's no sane scenario where a car company that sells cars in the tens of thousands over-values a car company that sells cars in the millions.
- stcredzero 10y ago
  Investors and fans say "but, but my stock isn't overvalued! Mine is the exception, its everyone else who is in the bubble!" It was true if you held Google stock.
  - drzaiusapelord 10y ago
    Google had a search monopoly. It trounced all competition trivially. I remember Google absolutely dominating the market and everyone shifting away from hotbot, yahoo, etc within a year or so. Anyone can, and does, make an electric car now and ones that don't cost $90,000. These aren't remotely comparable scenarios.
    - Lambdanaut 10y ago
      You've got impressive hindsight.
    - stcredzero 10y ago
      Lots of people made search engines back then.
fizixer 10y ago
> ... market cap isn’t everything ... Nothing is everything. That doesn't negate the fact that: Tesla Passes Ford by Market Value.
gozur88 10y ago
Isn't that the point, though? That Tesla's market cap can really only be justified by making the rosiest assumptions?
Fricken 10y ago
A study from Navigant research ranking leaders in automated driving ranks Ford 1st. Tesla ranks 12th: https://techcrunch.com/2017/04/03/ford-tops-the-list-of-automated-driving-leaders-in-new-study/ https://techcrunch.com/2017/04/03/ford-tops-the-list-of-auto...
calpaterson 10y ago
No, market cap is not everything. Specifically it is not enterprise value, which is the correct measure of the value of a business. Market cap is the value of the equity. Enterprise value is the value of the business (ie including debt). Tesla's EV is $52bn. Ford's EV is $150bn.
- tylerappeared 10y ago
  How is EV calculated?
- akhatri_aus 10y ago
  Enterprise value isn't the value of the business, its the cost to acquire a business and assume its debt. You've assumed that you have to take on a company's debt as an acquirer to take over a company. The market cap is closest to its value representing what it takes to control/own/sell the company.
  - calpaterson 10y ago
    Well, ownership and value are different things. Ford has large creditors and they lay claim to a correspondingly large portion of the cash flows. Tesla (presumably, looking at the difference between EV and market cap,) does not. The significant extra value of Ford is ignored when you focus the cost of getting control of a company rather than total value.
  - Hermel 10y ago
    In financial theory, enterprise value corresponds to the sum of all discounted cash flows (after tax). Thus, it is the market's best estimate for the value of the business. The question of capital structure should not really matter according to the Miller-Modigliani theorem.
    - akhatri_aus 10y ago
      The value of a business is what someone would be willing to pay for control over it, or its market cap (value of all shares). This is typically disconnected from its DCF which is a modelled value based on expected future returns. Enterprise value is also market cap + net debt, not its cumulative present value DCFs. [1] http://www.investopedia.com/terms/e/enterprisevalue.asp http://www.investopedia.com/terms/e/enterprisevalue.asp
toddmorey 10y ago
I'll put the math behind the numbers aside just for a moment to consider this is still a pretty impressive feat. I wouldn't have believed it 24 months ago. Also wouldn't have predicted for Ford and other nameplates to remain so static in this category. A high performance luxury EV just seems a great asset for any brand at the moment, even selling in lower numbers. We're at one of those shifts in technology where the cards get shuffled. I think Porsche gets it. Jaguar. Maybe Chevy. Tesla is reminding me a lot of early Apple—equally rapid supporters and detractors. If anything, that means people find your work interesting. (Wonder if Elon will send out a staff note mirroring the note Jobs sent when Apple first passed Dell in market cap.)
Hydraulix989 10y ago
Meanwhile, this very same day, another article topped HN: "Ford tops list of automated driving leaders in Navigant study. Tesla ranks 12th" https://techcrunch.com/2017/04/03/ford-tops-the-list-of-automated-driving-leaders-in-new-study/ https://techcrunch.com/2017/04/03/ford-tops-the-list-of-auto... Like parent said, market cap isn't everything.
- kirillzubovsky 10y ago
  There's no such thing as "independent research." Any article like that is always paid for by the company that ends up "leading" in it; that's how these research companies make their money. I worked for this lovely company once where we paid hundreds of thousands of dollars to a consulting company to "research" how we were the dopest, only to have pretty much written the entire document for them. Go figure...
  - kirillzubovsky 10y ago
    ps. From that TC article: "Ford has already responded to their position in the study, with a Medium post from CTO Raj Nair expressing their satisfaction at being ranked number one. " -- if this doesn't read like a pre-plan PR, I don't know what does.
elastic_church 10y ago
Tesla probably has a premium partly because of the exclusiveness of ownership and the features that come with those vehicles
aerovistae 10y ago
Are you arguing that people would be better off investing in Ford? Because if not, I don't really see the point of always trotting out the fact that 100 year old auto-makers have a larger manufacturing base than new ones. Seems obvious. "People in their 30s, on average, are taller than people in elementary school!" Whoa, really??!!!
deleted 10y ago
[deleted]
psyc 10y ago
There wasn't a doubt in my mind that this would be the top comment. But it is still a milestone, and a trend. Does anybody think that what happened to Apple and Google's market caps wasn't globally significant?
kirillzubovsky 10y ago
It's not about the number of cars that Tesla can sell today, and it's not even about the cars it will sell in the next decade, it's about the market domination a decade from now, and I see Tesla as a clear-cut winner. A few concrete thoughts here - http://kirillzubovsky.com/what-is-tesla-really/ http://kirillzubovsky.com/what-is-tesla-really/

by dan1234 10y ago

toomuchtodo 10y ago

> And when it comes to car sales, Tesla sold 40,697 vehicles in the U.S. last year, according to researcher IHS Markit. Ford sells that many F-Series trucks in the U.S. about every three weeks." How much stationary energy storage did Ford sell last year? "Tesla CTO: our energy storage is growing as fast as we can humanly scale it [Gallery of new Powerpack station]" https://electrek.co/2017/01/30/tesla-cto-energy-storage-growing-as-fast-as-we-can-humanly-scale-it-gallery-powerpack-station/ https://electrek.co/2017/01/30/tesla-cto-energy-storage-grow... Disclaimer: Own a bunch of TSLA.

baloneyman 10y ago
This time it's different! This time bubbly companies with no earnings and tons of debt will create a new paradigm! Lol
- Symmetry 10y ago
  It might very well be overprices (I sold because I think it is) but they got $7B in revenue in 2016 which is hardly no earnings. They make money on every car they sell so it would be pretty straightforward for them to decide to become profitable at the expense of growth and R&D. Now, their stock price assumes they're going to conquer the world rather than settle down to become a profitable small car manufacturer and solar/battery provider so lots of investors would lose their shirts if that happened. But it's an option for the company which makes them very different from the pets.coms of the world.
  - baloneyman 10y ago
    Revenue is nice, but earnings are all that matters when you have debts to pay. Just look over to the recently IPOed Snap, Inc. for a company with less revenue and more eyeballs!
tptacek 10y ago
I don't know. How much money does TSLA make selling stationary energy storage?
iaw 10y ago
More than Tesla: http://www.fordpower.cc/products.aspx?cateid=18 http://www.fordpower.cc/products.aspx?cateid=18
- toomuchtodo 10y ago
  Actual laughter was produced at a generator product page. Fuel has a marginal cost. Stationary battery storage soaks up power when power is cheap, releases it when the cost is higher and energy demand is higher and has a 10 year minimum life.
  - iaw 10y ago
    > Actual laughter was produced at a generator product page. You must be a blast at cocktail parties then. >Stationary battery storage soaks up power when power is cheap, releases it when the cost is higher and energy demand is higher and has a 10 year minimum life I think you're making a few unsubstantiated assumptions here. Primarily that the cost differential in electricity (or the availability of renewables) is broad enough for the Tesla tech to be significantly profitable. I ran the numbers: a Tesla PW2 gives you ~20.3MWh throughout it's useful life for $5500 limited by power availability and recharge rate. A slightly more powerful Ford generator at $1500 with $4000 worth of diesel fuel would yield ~8.9MWh of anytime power with the ability to run on waste oils and a comparatively perpetual lifespan. So, 44% the power cost with a power wall but a substantially higher upfront cost, a considerably lower salvage value, and a number of restrictions on it's usage (hope you don't need power during sustained outages in the Northeast). Any more chuckles?
    - toomuchtodo 10y ago
      "SolarCity developed a microgrid with 1.4 megawatts of solar generation capacity — enough to power nearly 100% of the island, according to a SolarCity blog posted on Tuesday. The microgrid is enabled by 60 Tesla Powerpacks, the company's large commercial battery, which can store solar energy at night." http://www.businessinsider.com/tesla-powers-tau-in-american-samoa-with-solar-powerpack-2016-11 http://www.businessinsider.com/tesla-powers-tau-in-american-... "The Kauai project consists of a 52 megawatt-hour battery installation plus a 13 megawatt SolarCity solar farm. Tesla and the Kauai Island Utility Cooperative, the power company that ordered the project, believe the project will reduce fossil fuel usage by 1.6 million gallons per year." http://www.theverge.com/2017/3/8/14854858/tesla-solar-hawaii-kauai-kiuc-powerpack-battery-generator http://www.theverge.com/2017/3/8/14854858/tesla-solar-hawaii... "On Thursday, Tesla announced that it had been chosen “through a competitive process” to supply utility company Southern California Edison with 20 MW (or 80 MWh) of battery storage. In May, regulators ordered Southern California Edison to invest in utility-scale battery networks after natural gas provider SoCal Gas leaked 1.6 million pounds of methane into the atmosphere when a well ruptured at its Aliso Canyon Natural Gas Storage Facility." https://arstechnica.com/business/2016/09/socal-utility-will-buy-80mwh-of-battery-storage-from-tesla-after-methane-leak/ https://arstechnica.com/business/2016/09/socal-utility-will-... "California will shortly bring more Tesla energy storage systems online in Southern California Edison’s (SCE’s) service area. The 50 MW projects (utilizing Tesla’s Powerpack 2) are conducted by Macquarie Capital, the corporate advisory, capital markets and principal investing arm of Macquarie Group (a global finance corporation)." http://insideevs.com/southern-california-edison-to-bring-online-50-mw-tesla-powerpack-2-system/ http://insideevs.com/southern-california-edison-to-bring-onl... "With the confidence of a well-oiled pizza shop, Elon Musk “seriously” said that Tesla could deliver a more than 100 MWh Powerpack project to Australia in 100 days – or it will be free." ... "Considering a large part of the 100 days will be for shipping the Powerpacks and other equipment from Nevada to Australia and then installing those packs, I wouldn’t be surprised if it means that Tesla and Panasonic already have a capacity of over 100 MWh per month at the Gigafactory. That’s a significant 1.2 GWh annualized rate." https://electrek.co/2017/03/10/tesla-gigafactory-elon-musk-confidence-battery-production/ https://electrek.co/2017/03/10/tesla-gigafactory-elon-musk-c... I bought my TSLA at $17/share. I am chuckling all the way to the bank.

adamnemecek 10y ago

Investors invest based on promise of future value. How much is Ford expected to grow?

John23832 10y ago
If they can properly pivot into the electric car market, a lot. Ford has all the infrastructure that Tesla is attempting to build now (aside from the batteries, but that is something that Ford could easily partner with another manufacture to get). They know how to mass produce cars (granted right now, ICE cars). That's not an easy feat. They have a large manufacturing and maintenance base that, frankly, Tesla can't replicate. The bet is that Tesla will be the first successful company to market, or that they will hold some patents which will prove valuable in the future. The market is not betting that they'll beat Ford or GM.
- adamnemecek 10y ago
  What infrastructure do you have in mind? Factories?
  - John23832 10y ago
    Factories, dealerships, a maintenance network, etc.
    - adamnemecek 10y ago
      I can't imagine that all of those will remain usable and competitive without major investments. Note that doesn't need dealerships.
      - John23832 10y ago
        Of course Ford would make investments to stay viable... that's how business works.
- stellar678 10y ago

Shivetya 10y ago

it is what you concentrate on when your other numbers don't look so good. The 3 is going to be a real test here. Not that they can make the car but that those expecting to get one at 35k actually get one and on a timely basis. Then throw in, is there any profit at that price point when factoring in all related costs?

mikeash 10y ago
I doubt there will be much profit at $35,000, at least not for a while. But does there need to be? As long as it's profitable on average, the base model can just break even. I bet a lot of buyers will pay for the Autopilot option, for example, and that's pure profit.

tommoor 10y ago

Ford also had 3 large vehicle recalls last week alone

Spooky23 10y ago

The market makes mistakes over value all of the time. Look at the sad tale of post-bankruptcy Kmart, and how they used hype, valuation and newly available credit to gobble up Sears. Predicable trainwreck ensued. Tesla is alike and different. They have an amazing management team, Apple-like religious fervor/hype machine, but a marginal product category. Their continued growth is only possible as long as they can convince people that they aren't a commodity like any of the 50 other car companies.

samstave 10y ago
Interesting comment. I'd say that the way they are convincing the public is with a very well engineered product line that is also a big fuck-you to big-oil. The only people that like big-oil are the people who work for and profit off big oil. Musks empire is growing in ways ford could only dream of. People love the machines they make. Ford can add body stylings all they want, but they can't match tesla or spacex or solar city. I just don't think they have it in their DNA - I'm actually surprised we haven't heard of any of the big three going all out attempting to acquire tesla. What would be a very interesting event would be when Tessa builds a long haul delivery truck/trucks in general. There is no way they haven't thought of a general platform chassis which can have modular tops put on them. Wouldn't it be great if tesla sold a chassis to boutique shops like there were in the 20s...
- alasdair_ 10y ago
  >I'm actually surprised we haven't heard of any of the big three going all out attempting to acquire tesla. I'm not. The big three don't have enough cash to pay the market cap multiple needed to gain control, especially now that Tesla is bigger than Ford. No sane lender would loan the money to one of the big three to do it either - first, the money would be better spent just buying Tesla stock and second, there is no way that Tesla would be run better by pulling it into one of the big three car comnpanies, none of which have a strong non-incremental innovation culture.
- Spooky23 10y ago
  Most people don't care about sending a "fuck you" to anyone. They just want a car. When electric has a positive ROI, it will be just another drivetrain from Ford.

dsugarman 10y ago

Tesla is potentially a trillion dollar company and it's biggest current hurdle is getting it's production up to meet an enormous demand. The reason it's trading at a higher market cap is because Ford doesn't have any growth potential and Tesla is still trading at a fraction of what it could be. Of course there is still a ton of risk factors for them, but expected value for investing should be based on the chance of success * potential future value over a variety of possible outcomes.

Alupis 10y ago
> Tesla is potentially a trillion dollar company A trillion dollars? For a niche/luxury car company? What fantasy is that based on? > it's biggest current hurdle is getting it's production up to meet an enormous demand While enormous to Tesla, actual demand is pretty small compared to other car companies. It doesn't help that even the most "affordable" Tesla is far more expensive than the average competitor's EV or hybrid vehicle[1][2], let alone it's base price (not final sale price) starts off above the average new car purchase price (final sale, after upgrades, etc) for the entire industry[3]. There's a lot of hype around Tesla, but that doesn't mean they're going to take over the auto industry, let alone become larger than the largest auto makers around who produce "Everyday Joe" cars for the rest of the population. [1] http://evobsession.com/10-best-electric-cars/ http://evobsession.com/10-best-electric-cars/ [2] http://www.caranddriver.com/best-hybrid-electric-cars http://www.caranddriver.com/best-hybrid-electric-cars [3] http://mediaroom.kbb.com/new-car-transaction-prices-up-2-percent-march-2016 http://mediaroom.kbb.com/new-car-transaction-prices-up-2-per...
- sillysaurus3 10y ago
  If batteries reduce the demand for oil, oil's value will start to transfer to batteries.
  - Alupis 10y ago
    > If batteries reduce the demand for oil That's a big IF. Also, it ignores the fact that every car manufacturer already has a plethora of fully electric, or hybrid models available (and they are, on average, far cheaper than the cheapest base model Tesla can offer), and the markets still don't buy them. This also ignores the fact that many companies make great batteries, and Tesla is only recently sitting down to that table. Why wouldn't Panasonic be that "trillion dollar" company? Or Sony? Or Fujitsu?

crabasa 10y ago

> Over the last five years, Ford has posted net income totaling $26 billion, while Tesla has lost $2.3 billion. Ford: "We have no idea how to invest this money. I guess let's just put it in the bank." Tesla: "We have so many idea for investments, we're only constrained by cash. Let's go back to the capital markets!"

oculusthrift 10y ago
except ford is spending an order of magnitude more than tesla. it's much easier to spend 100 dollars meaningfully than a 100 billion. I also hope you're willing to level the same charge at Google and Apple.
- seanmcdirmid 10y ago
  It is like comparing a spunky startup to an entrenched corporation. Ya, IBM once spent more than Facebook, but Facebook was worth more because it had potential while IBM didn't. Ford doesn't have any good ideas for the future, they are too busy with the here and now and haven't shown an ability to do anything but incremental improvements with their R&D spending. Like we don't expect much more from IBM, we don't expect much more from Ford, but we do from Tesla.
  - dkrich 10y ago
    What is this based on? Ford has had record profits over the past few years and has continually improved their vehicles and manufacturing processes, including remaking two assembly plants to make aluminum body F 150s. They also invested a billion dollars in Arvo AI and are making aggressive moves into self driving technology.
    - sqeaky 10y ago
      An aluminum body is exactly the kind of iteration that was being talked about. It is neat, but its not and all new drive train on a totally different tech. Aluminium is a pretty well understood material, while self driving cars are virgin territory. Tesla is making larger swings and potentially accepting larger risk. Ford is... iterating.

drzaiusapelord 10y ago

and... this is how bubbles happen. Investors and fans say "but, but my stock isn't overvalued! Mine is the exception, its everyone else who is in the bubble!" There's no sane scenario where a car company that sells cars in the tens of thousands over-values a car company that sells cars in the millions.

stcredzero 10y ago
Investors and fans say "but, but my stock isn't overvalued! Mine is the exception, its everyone else who is in the bubble!" It was true if you held Google stock.
- drzaiusapelord 10y ago
  Google had a search monopoly. It trounced all competition trivially. I remember Google absolutely dominating the market and everyone shifting away from hotbot, yahoo, etc within a year or so. Anyone can, and does, make an electric car now and ones that don't cost $90,000. These aren't remotely comparable scenarios.
  - Lambdanaut 10y ago
    You've got impressive hindsight.
  - stcredzero 10y ago
    Lots of people made search engines back then.

fizixer 10y ago

> ... market cap isn’t everything ... Nothing is everything. That doesn't negate the fact that: Tesla Passes Ford by Market Value.

gozur88 10y ago

Isn't that the point, though? That Tesla's market cap can really only be justified by making the rosiest assumptions?

Fricken 10y ago

A study from Navigant research ranking leaders in automated driving ranks Ford 1st. Tesla ranks 12th: https://techcrunch.com/2017/04/03/ford-tops-the-list-of-automated-driving-leaders-in-new-study/ https://techcrunch.com/2017/04/03/ford-tops-the-list-of-auto...

calpaterson 10y ago

No, market cap is not everything. Specifically it is not enterprise value, which is the correct measure of the value of a business. Market cap is the value of the equity. Enterprise value is the value of the business (ie including debt). Tesla's EV is $52bn. Ford's EV is $150bn.

tylerappeared 10y ago
How is EV calculated?
akhatri_aus 10y ago
Enterprise value isn't the value of the business, its the cost to acquire a business and assume its debt. You've assumed that you have to take on a company's debt as an acquirer to take over a company. The market cap is closest to its value representing what it takes to control/own/sell the company.
- calpaterson 10y ago
  Well, ownership and value are different things. Ford has large creditors and they lay claim to a correspondingly large portion of the cash flows. Tesla (presumably, looking at the difference between EV and market cap,) does not. The significant extra value of Ford is ignored when you focus the cost of getting control of a company rather than total value.
- Hermel 10y ago
  In financial theory, enterprise value corresponds to the sum of all discounted cash flows (after tax). Thus, it is the market's best estimate for the value of the business. The question of capital structure should not really matter according to the Miller-Modigliani theorem.
  - akhatri_aus 10y ago
    The value of a business is what someone would be willing to pay for control over it, or its market cap (value of all shares). This is typically disconnected from its DCF which is a modelled value based on expected future returns. Enterprise value is also market cap + net debt, not its cumulative present value DCFs. [1] http://www.investopedia.com/terms/e/enterprisevalue.asp http://www.investopedia.com/terms/e/enterprisevalue.asp

toddmorey 10y ago

I'll put the math behind the numbers aside just for a moment to consider this is still a pretty impressive feat. I wouldn't have believed it 24 months ago. Also wouldn't have predicted for Ford and other nameplates to remain so static in this category. A high performance luxury EV just seems a great asset for any brand at the moment, even selling in lower numbers. We're at one of those shifts in technology where the cards get shuffled. I think Porsche gets it. Jaguar. Maybe Chevy. Tesla is reminding me a lot of early Apple—equally rapid supporters and detractors. If anything, that means people find your work interesting. (Wonder if Elon will send out a staff note mirroring the note Jobs sent when Apple first passed Dell in market cap.)

Hydraulix989 10y ago

Meanwhile, this very same day, another article topped HN: "Ford tops list of automated driving leaders in Navigant study. Tesla ranks 12th" https://techcrunch.com/2017/04/03/ford-tops-the-list-of-automated-driving-leaders-in-new-study/ https://techcrunch.com/2017/04/03/ford-tops-the-list-of-auto... Like parent said, market cap isn't everything.

kirillzubovsky 10y ago
There's no such thing as "independent research." Any article like that is always paid for by the company that ends up "leading" in it; that's how these research companies make their money. I worked for this lovely company once where we paid hundreds of thousands of dollars to a consulting company to "research" how we were the dopest, only to have pretty much written the entire document for them. Go figure...
- kirillzubovsky 10y ago
  ps. From that TC article: "Ford has already responded to their position in the study, with a Medium post from CTO Raj Nair expressing their satisfaction at being ranked number one. " -- if this doesn't read like a pre-plan PR, I don't know what does.

elastic_church 10y ago

Tesla probably has a premium partly because of the exclusiveness of ownership and the features that come with those vehicles

aerovistae 10y ago

Are you arguing that people would be better off investing in Ford? Because if not, I don't really see the point of always trotting out the fact that 100 year old auto-makers have a larger manufacturing base than new ones. Seems obvious. "People in their 30s, on average, are taller than people in elementary school!" Whoa, really??!!!

deleted 10y ago

[deleted]

psyc 10y ago

There wasn't a doubt in my mind that this would be the top comment. But it is still a milestone, and a trend. Does anybody think that what happened to Apple and Google's market caps wasn't globally significant?

kirillzubovsky 10y ago

It's not about the number of cars that Tesla can sell today, and it's not even about the cars it will sell in the next decade, it's about the market domination a decade from now, and I see Tesla as a clear-cut winner. A few concrete thoughts here - http://kirillzubovsky.com/what-is-tesla-really/ http://kirillzubovsky.com/what-is-tesla-really/