6 ms·

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 tradin

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?
    - erikpukinskis 10y ago
      Put a probability on the IF and multiply it by the revenue of the oil companies and you've got a valuation for Tesla.
macspoofing 10y ago
>Tesla is potentially a trillion dollar company... Huh?
- agreedasdfs4 10y ago
  Tesla isn't a car company. It's a power/battery company that makes electric cars. This is the goal: https://www.tesla.com/tesla_theme/assets/img/solar/section-hero.jpg https://www.tesla.com/tesla_theme/assets/img/solar/section-h... Powerwall Solar roof Car All made/sold by Tesla. If Apple can be a multi-billion dollar company making laptops, phones, and an app store, I don't really see the Tesla "could be a trillion dollar company" as too far-fetched. I mean this is the era when SnapChat is "worth 25 billion".
  - macspoofing 10y ago
    >I don't really see the Tesla "could be a trillion dollar company" as too far-fetched. Anything could be anything. The challenge for Tesla is that they validated the electric car market and managed to carve out some market share, but now they are in the sights of every car manufacturer in the world. It's a different ball game for them. Car companies know how to make cars at scale, Tesla doesn't. It's a big challenge.
- leggomylibro 10y ago
  I think that line of thought assumes that they pivot from electric cars to batteries, and from batteries to energy in general. Imagine huge, modular atmospheric/solar/geothermal/battery/molten salt combination generator/energy storage plants dotting the globe. But I mean, couldn't GE do that too? Or Samsung/Murata/Vishay/Maxwell/Panasonic/etc.? It kind of seems like the stocks are trading largely on the strength of Musk's vision. I am kind of okay with letting mad scientists-cum-Bond villains like Musk and Bezos run amok with billions of dollars, though. I mean why not, it's a bit of a wildcard and it makes about as much sense as anything else that's happening right now.
  - erikpukinskis 10y ago
    > But I mean, couldn't GE do that too? Or Samsung/Murata/Vishay/Maxwell/Panasonic/etc.? Sure. So could Martha Stewart, or Jeff Bezos. That hard part is actually doing it and doing it well. Is GE better positioned to do it than Tesla? Not really. It's a complex problem involving advanced software, engineering, branding, customer service, talent retention, supply chain, and myriad other challenges. Tesla is better at some of these things, worse at others. But they're going for it. GE, GM, et al don't appear to be moving aggressively towards these goals at all.
FilterSweep 10y ago
> Ford doesn't have any growth potential Word? https://seekingalpha.com/article/4031938-ford-potential-grow https://seekingalpha.com/article/4031938-ford-potential-grow
- spyspy 10y ago
  That link has no real info on their growth potential, it's just one analyst saying that it has some with no follow up.
  - FilterSweep 10y ago
    the parent has provided no citation on his claim of no growth potential. my source at least provides qualitative reasons why Ford has seen growth in the 2016 fiscal year, reasons which are clearly overlooked by parent. Not many people are aware of Ford's big sell on Mobility Services - it certainly is not as exciting as Electric cars that have a "Ludicrous Speed" button. Full disclosure, I'm a fan of both companies.
ovulator 10y ago
What are you basing that trillion dollar evaluation off of? Combining the 5 largest auto manufactures on earth and you are still well short of a trillion dollar company.
- deleted 10y ago
  [deleted]
- 5ilv3r 10y ago
  While the biggest 5 are spending in R&D to meet tesla in product, tesla will be enjoying (presumably) apple level profit margins on their established product. Or at least that is how I understand it.
- erikpukinskis 10y ago
  Add in the 5 largest oil producers, the 5 largest electric utilities, and the 5 largest public transit systems and you'll get there.
  - princeb 10y ago
    ah hell, might as well toss in the 5 largest software companies while we're at it.
- kirillzubovsky 10y ago
  Ha! I just wrote about it this morning. Tesla's potential is not in the car business as we used to know it, but in the way it's going to play out in the next decade. Based on everything happening right now, it's not an IF but WHEN kind of question. Here, some detailed thoughts : http://kirillzubovsky.com/what-is-tesla-really/ http://kirillzubovsky.com/what-is-tesla-really/
mcguire 10y ago
So, when will Tesla be manufacturing 2,500,000 cars per year? Edit: No, really. Ford sold over a million vans, pickups and heavy trucks last year, a market that Tesla has no apparent interest in entering.[1] The Toyota Camry alone sold 428,000 in 2014, the Honda Accord 328,000, the Corolla 340,000, the Ford Fusion 306,000, the Nissan Altima 336,000, and the Honda Civic 326,000.[2] The Tesla Model 3 will presumably be in that latter market (although those are roughly $10,000 cheaper), and if Musk is right about scaling his factory to 500,000/year, it will take a big chunk of it (but still, it's $10,000 more). (If it's in the BMW 3-series/Merc. C-class/Lexus range, 500,000/year would eat all of that market.) [1] https://corporate.ford.com/content/dam/corporate/en/investors/investor-events/Sales%20Calls/2017/December-2016-Sales-Release-with-tables.pdf https://corporate.ford.com/content/dam/corporate/en/investor... [2] https://www.bloomberg.com/graphics/2015-auto-sales/ https://www.bloomberg.com/graphics/2015-auto-sales/
- erikpukinskis 10y ago
  Tesla has already announced plans to build vans, pickups, and semis.
  - dragontamer 10y ago
    Tesla is _priced_ as if they are already building vans, pickups, and semis.
nojvek 10y ago
Tesla seems to be nimble and quick. They are making the future of cars like making software. Quick and iterative. If they can make batteries cheaper than anyone else. If they can make electric cars cheaper than equivalent gas cars for long term then they are clear winner. It didn't take Apple much to take Nokia out of the game. Nokia had smartphones on the agenda for a long time. The problem was that wasn't their only focus. Apple went all hands into the iPhone.

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?
  - erikpukinskis 10y ago
    Put a probability on the IF and multiply it by the revenue of the oil companies and you've got a valuation for Tesla.

macspoofing 10y ago

>Tesla is potentially a trillion dollar company... Huh?

agreedasdfs4 10y ago
Tesla isn't a car company. It's a power/battery company that makes electric cars. This is the goal: https://www.tesla.com/tesla_theme/assets/img/solar/section-hero.jpg https://www.tesla.com/tesla_theme/assets/img/solar/section-h... Powerwall Solar roof Car All made/sold by Tesla. If Apple can be a multi-billion dollar company making laptops, phones, and an app store, I don't really see the Tesla "could be a trillion dollar company" as too far-fetched. I mean this is the era when SnapChat is "worth 25 billion".
- macspoofing 10y ago
  >I don't really see the Tesla "could be a trillion dollar company" as too far-fetched. Anything could be anything. The challenge for Tesla is that they validated the electric car market and managed to carve out some market share, but now they are in the sights of every car manufacturer in the world. It's a different ball game for them. Car companies know how to make cars at scale, Tesla doesn't. It's a big challenge.
leggomylibro 10y ago
I think that line of thought assumes that they pivot from electric cars to batteries, and from batteries to energy in general. Imagine huge, modular atmospheric/solar/geothermal/battery/molten salt combination generator/energy storage plants dotting the globe. But I mean, couldn't GE do that too? Or Samsung/Murata/Vishay/Maxwell/Panasonic/etc.? It kind of seems like the stocks are trading largely on the strength of Musk's vision. I am kind of okay with letting mad scientists-cum-Bond villains like Musk and Bezos run amok with billions of dollars, though. I mean why not, it's a bit of a wildcard and it makes about as much sense as anything else that's happening right now.
- erikpukinskis 10y ago
  > But I mean, couldn't GE do that too? Or Samsung/Murata/Vishay/Maxwell/Panasonic/etc.? Sure. So could Martha Stewart, or Jeff Bezos. That hard part is actually doing it and doing it well. Is GE better positioned to do it than Tesla? Not really. It's a complex problem involving advanced software, engineering, branding, customer service, talent retention, supply chain, and myriad other challenges. Tesla is better at some of these things, worse at others. But they're going for it. GE, GM, et al don't appear to be moving aggressively towards these goals at all.

FilterSweep 10y ago

> Ford doesn't have any growth potential Word? https://seekingalpha.com/article/4031938-ford-potential-grow https://seekingalpha.com/article/4031938-ford-potential-grow

spyspy 10y ago
That link has no real info on their growth potential, it's just one analyst saying that it has some with no follow up.
- FilterSweep 10y ago
  the parent has provided no citation on his claim of no growth potential. my source at least provides qualitative reasons why Ford has seen growth in the 2016 fiscal year, reasons which are clearly overlooked by parent. Not many people are aware of Ford's big sell on Mobility Services - it certainly is not as exciting as Electric cars that have a "Ludicrous Speed" button. Full disclosure, I'm a fan of both companies.

ovulator 10y ago

What are you basing that trillion dollar evaluation off of? Combining the 5 largest auto manufactures on earth and you are still well short of a trillion dollar company.

deleted 10y ago
[deleted]
5ilv3r 10y ago
While the biggest 5 are spending in R&D to meet tesla in product, tesla will be enjoying (presumably) apple level profit margins on their established product. Or at least that is how I understand it.
erikpukinskis 10y ago
Add in the 5 largest oil producers, the 5 largest electric utilities, and the 5 largest public transit systems and you'll get there.
- princeb 10y ago
  ah hell, might as well toss in the 5 largest software companies while we're at it.
kirillzubovsky 10y ago
Ha! I just wrote about it this morning. Tesla's potential is not in the car business as we used to know it, but in the way it's going to play out in the next decade. Based on everything happening right now, it's not an IF but WHEN kind of question. Here, some detailed thoughts : http://kirillzubovsky.com/what-is-tesla-really/ http://kirillzubovsky.com/what-is-tesla-really/

mcguire 10y ago

So, when will Tesla be manufacturing 2,500,000 cars per year? Edit: No, really. Ford sold over a million vans, pickups and heavy trucks last year, a market that Tesla has no apparent interest in entering.[1] The Toyota Camry alone sold 428,000 in 2014, the Honda Accord 328,000, the Corolla 340,000, the Ford Fusion 306,000, the Nissan Altima 336,000, and the Honda Civic 326,000.[2] The Tesla Model 3 will presumably be in that latter market (although those are roughly $10,000 cheaper), and if Musk is right about scaling his factory to 500,000/year, it will take a big chunk of it (but still, it's $10,000 more). (If it's in the BMW 3-series/Merc. C-class/Lexus range, 500,000/year would eat all of that market.) [1] https://corporate.ford.com/content/dam/corporate/en/investors/investor-events/Sales%20Calls/2017/December-2016-Sales-Release-with-tables.pdf https://corporate.ford.com/content/dam/corporate/en/investor... [2] https://www.bloomberg.com/graphics/2015-auto-sales/ https://www.bloomberg.com/graphics/2015-auto-sales/

erikpukinskis 10y ago
Tesla has already announced plans to build vans, pickups, and semis.
- dragontamer 10y ago
  Tesla is _priced_ as if they are already building vans, pickups, and semis.

nojvek 10y ago

Tesla seems to be nimble and quick. They are making the future of cars like making software. Quick and iterative. If they can make batteries cheaper than anyone else. If they can make electric cars cheaper than equivalent gas cars for long term then they are clear winner. It didn't take Apple much to take Nokia out of the game. Nokia had smartphones on the agenda for a long time. The problem was that wasn't their only focus. Apple went all hands into the iPhone.