12 ms·
BMW reported profits of €8.7bn for the year 2017. [1] Tesla stockholders must be very, very optimistic about its future performance when they value Tesla more
by ckastner 8y ago
BMW reported profits of €8.7bn for the year 2017. [1]
Tesla stockholders must be very, very optimistic about its future performance when they value Tesla more than an already established, immensely profitable player.
[1] https://phys.org/news/2018-03-bmw-net-profit-bn-euros.html https://phys.org/news/2018-03-bmw-net-profit-bn-euros.html
- DanCarvajal 8y agoStockholders just believe the no one else will ever be able to make an electric car.
- codeulike 8y agoBattery packs for EVs are expensive and heavy. And more complicated than people realise. They're not just big batteries. Making an electric car with decent range at an affordable price* is not easy at all. Tesla is closer than anyone else. * edit: an affordable price that isn't loss-making, I should say
- rootusrootus 8y agoBoth Chevy and Hyundai have decent range EVs that are significantly less expensive than a Tesla, so it seems like it's not a problem only Tesla knows the answer to.
- JoeAltmaier 8y agoThe Bolt at 238 miles is still quite a bit under the Tesla which can reach 300+. But at half the cost, its a price point that will suit many folks.
- rootusrootus 8y agoOnly because Chevy doesn't offer an LR upgrade for the Bolt. Otherwise it seems like it has more range than a 220-mile Model 3?
- codeulike 8y agoThe Chevvy bolt is sold at an $8000 loss. The Hyundai Kona Electric looks cool but is only going to be sold in small numbers and won't be available in much of the USA https://insideevs.com/hyundai-kona-electric-limited-u-s-availability/ https://insideevs.com/hyundai-kona-electric-limited-u-s-avai... I wonder why.
- Retric 8y agoNot only are they losing money, it also starts at $36,620 which is more than the Tesla 3 base model and it’s tiny. Bolt: 164″ L x 70″ W Model 3: 185″ L x 73″ W Which is not nessisarily a bad thing for a city car.
- falcolas 8y agoThe Tesla 3 base model is not in production right now. Only the higher priced models are. I'm sure they'll eventually get to it, but you're comparing a model that is available to buy today with one which is not.
- Retric 8y agoSure, in practice you can even get a 2019 Bolt for 9k under MSRP becase nobody wants them. https://www.cars.com/vehicledetail/detail/747922437/overview/ https://www.cars.com/vehicledetail/detail/747922437/overview... Tesla may or may not start base model production in Q1 2019, but availability is not really helping the Bolt sell.
- falcolas 8y agoCars almost always sell under MSRP - because there's a middleman involved. For example: https://www.cars.com/vehicledetail/detail/750619576/overview/ https://www.cars.com/vehicledetail/detail/750619576/overview... "Nobody wants one" is also hyperbolic - Chevy releases sale numbers, and while not top-of-the-line, they're also not 0.
- 8y ago
- mdasen 8y agoI can go to a dealer today and grab a Chevy Bolt for under $32k with no haggling with 238 mile range. Hyundai hasn't come out with US pricing for their Kona EV yet, but in Norway they're selling it for the equivalent of $40k with 258 mile range. It certainly isn't trivial and Tesla has invested a good bit in EV technology, but it looks like rivals aren't that far behind.
- deleted 8y ago[deleted]
- deleted 8y ago[deleted]
- LeonM 8y agoThey are able, but they don't do it. The only full electric car BMW currently produces is the wacky i3, which doesn't appeal to the average BMW buyer. For some reason all car manufacturers (except tsla) build really lame, goofy, small electric cars, why can't we just have a traditional luxury saloon? The current 5 and 3-series are not offered in an full electric version. Which means that maybe, if we are lucky, there will be an all-electric 3/5 series in the next-generation (to be expected in 2021).
- toomuchtodo 8y agoJust bought a new Model S 100D. Sat in other cars just for giggles (BMW 5 series, Mercedes E Class, Audi RS 3). Where else am I getting an electric car that holds two large Clek Fllo car seats, two adults, a full trunk of luggage, has 330 miles of range, does 0-60 in 3.6 seconds, and I can travel cross country effortlessly in? It doesn't exist besides a Tesla. Tesla is valued appropriately based on the market.
- athenot 8y agoI drove 2 Nissan LEAFs for 5 years. They are solid cars, and this year's iteration moved out of the "early adopter" segment and is being marketed as a mainstream car. Their roadmap in 2022 calls for 4 EVs plus 2 more under the Infiniti brand. Unlike GM, Nissan has 8 years of experience with EVs so I think their roadmap is believable.
- kazen44 8y agoAlso, the nissan leaf could be the kind of car that fetches the low end of the market. All the people driving cheap tiny cars like the toyota aygo, these people are usually also those who don't drive long distances. A nissan leaf would be a perfect car for my Mother in law for instance, she drives very little, and the distances she drives are usually >50km.
- thepangolino 8y agoThis is something that also always boggled my mind. One of the most expensive parts on an electric car are the batteries. No matter how cheap you try to make your car, you'll be set back about 20k just with the batteries. At this point, why even bother trying to go for the lower end.
- leesec 8y agoThe fact that it's electric is not even close to the only advantage that Tesla's cars have over ICE cars. Tesla turned the car into a software problem, and I would argue they have demonstrated they are WAY WAY ahead of the major OEM's at software and in the infrastructure supporting it. Not to mention extremely sleek and well loved design, autopilot, etc. To just make a Camry electric won't be enough ( though it definitely will take some of the market share ).
- thesimon 8y ago>autopilot Other than marketing, are they really ahead of the competition?
- leesec 8y agoWhich competition are we talking about? GM Supercruise is the only other thing on the market that is comparable, and with Nav on Autopilot I'd argue Tesla is a fair bit ahead. Maybe they are not ahead of Waymo, but can you buy a Waymo? If not then when will you be able to? There is Comma.ai which I am impressed with and think will be the general autonomous solution to many (most?) non-Tesla cars going forward, but their product at the moment is for hobbyists and not consumers.
- hcg 8y ago> Tesla turned the car into a software problem No, they convinced fanboys that they turned it into a software problem. The reality is they are no different than any other auto manufacturer. Being in Silicon Valley doesn't change that. An electric Camry would sell so much more than the model 3.
- leesec 8y agoWhat are you talking about? They have turned it into a software problem. Name another company where you can make meaningful over the air software updates that affect more than the dashboard? Also while I am a Tesla fanboy, I work in automotive technology and interface with many of the major car companies daily, so I'm not just getting this from articles.
- 013a 8y agoBeyond the hype, I think it's feasible to believe that Tesla has a massive multi-year advantage that other car companies will be playing catchup to for a very long time. Having the global manufacturing infrastructure of someone like Ford or VAG certainly seems like an advantage, but retrofitting that infrastructure to manufacture electric vehicles isn't exactly trivial or cheap. Then consider you also need to "retrofit" all of your people to figure out how to make electric vehicles (or hire new people). The platforms that worked for ICEs don't work for EVs. The electronics don't work. It requires a huge number of new parts. And the parts that stay the same might not be well-suited for EVs; ICE buyers, especially BMW, don't really care about fuel economy, but every EV buyer does care about range. That's a huge shift that affects every part; seats have to be lighter, made of different materials, you have to use more aluminum and carbon fiber in more expensive models, aerodynamics change, etc. Then consider Tesla's massive lead in battery production which serves to drive down price and increase their technology lead.
- gamblor956 8y agoYour greatly overstating Tesla's advantages. EV drivetrains aren't quite drop in replacements but they are close enough that the first modern commercial EVs... including Tesla...were simply converted ICE vehicles. Also, Tesla doesn't make batteries, Panasonic does. Tesla just assembles them. Panasonic also sells batteries to Tesla's competition. And based on Tesla's past issues with paying vendors, if they miss even a single payment to Panasonic their supply advantage could disappear immediately.
- leesec 8y agoYes those cars were converted ICE vehicles... in 2008. Sounds like a multi year advantage to me.
- gamblor956 8y agoNo fewer than a dozen car companies are planning to launch more advanced EVs than Tesla within the next 3 years. Tesla can't afford the capital investment it needs to compete with that generation of competition, largely because it executed this generation's launch so poorly.
- rchaud 8y ago> Tesla stockholders must be very, very optimistic about its future performance or about their ability to flip the stock to the next buyer while the going is still good.
- sorrymate 8y agoNot true. We are not all short sellers.
- lotsofpulp 8y agoBuying something because you think it’s price will rise and then selling it is the opposite of short selling.
- calyth2018 8y agoshhhh... short seller is just a code word for Tesla hater ;)
- gehsty 8y agoFlipping stock is not short selling. There is literally nothing wrong with selling a stock you own for more than you bought it. Maybe a good time to cash in a percentage of you’ve made a lot of money.
- mcguire 8y agoSpeculators != short sellers.
- this_user 8y agoBMW's net profits just tanked 24% in Q3. Meanwhile, TSLA is producing margins that the legacy manufacturers can only dream of. They are making 20% on a Model 3 while the others are squeezing out a few hundred Euros in the non-luxury segment. Also, TSLA's battery tech is years ahead while especially the German manufacturers have been putting their eggs mostly in the Diesel basket. But those have become increasingly hard to sell to the point where Porsche has abandoned that technology altogether, and others are likely to follow. These companies are the Palm, Blackberry and Nokia of the auto industry: They don't understand that the paradigm has shifted, and when they finally do, it will already be too late.
- gehsty 8y agoI don’t think this is the same as the phone market. Tesla’s success does not stop BMW from thriving in the EV market in the future, another way to put it is that cars are not a platform.
- Heag3aec 8y agoUntil autonomous rideshare services take over. Then regional monopolies will arise due to the infrastructure needed to support those fleets.
- MuffinFlavored 8y ago> BMW's net profits just tanked 24% in Q3. What caused this?
- deleted 8y ago[deleted]
- mdasen 8y agoThis is a key point when considering Tesla stock. In order to justify the current price, Tesla really has to become the next Toyota. Volkswagen is an $85B auto maker and the second most valuable. Tesla is already a $60B auto maker. If Tesla becomes the next Volkswagen in 10 years, they will have gained 42% returns over 10 years or about 3.6% annual returns. Given the high risk that Tesla won't become the next Volkswagen, it seems over-priced. Even Toyota, at $192B, seems like it would be lackluster returns if Tesla reaches their heights in a decade. That would be a 12.4% annualized return. Now, that's a very good return, but is is likely that Tesla will become the next Toyota? Why not the Next Volkswagen at $85B or Ford at $28B or GM at $51B or Mazda at $7B? Those are all successful auto makers with good profits. Worse, are cars really the future? More and more people are migrating to cities and looking toward public transit. Even if cars become green, they're still congestion in a world whose urban population is increasing a lot where congestion and parking are becoming larger problems. Even if cars are the future, will people own them? If self-driving cars become a reality, demand for vehicles could fall by 90%. Most cars are idle most of the time. If I can just get a self-driving taxi everywhere I need to go, it would be a fraction of the price of owning a vehicle since I would be sharing vehicles with many people. That would lower the demand for vehicles a lot. Even if Tesla became 100% of the auto industry, if that industry is a tiny fraction of the size today, it would really hurt Tesla's finances. Really, I think there are two ways Tesla could hold up to its expectations. 1) Being more than a car company. Tesla might become big in other industries like solar power in addition to being a car company. They'd probably need more than just solar as an add-on, but there are markets out there. 2) Tesla's vertical integration works really well and beats out competitors. One thing to note about this: the vertical integration also exposes them to a lot of risk. When you have several outside companies creating the same component for you, if one doesn't deliver, you don't have to push back projects - you just buy from a different supplier. While you pay a mark-up, you also get different companies and teams working on the same problem to drive down price and drive up quality. It's certainly possible that Tesla will do excellently with their in-house components and keep that going for decades and it could provide them a strong price advantage against competitors.
- TekMol 8y agoIf Tesla becomes the next Volkswagen in 10 years, they will have gained 42% returns over 10 years. And if they become a trillion dollar company, they will have gained 1566%. They are in AI and in Solar. Two giant waves ahead of us. AI will be bigger then the web. Solar might too. The 'Google of AI' will be way bigger then Google. Given the high risk that Tesla won't become the next Volkswagen, it seems over-priced. The 'risk' that Tesla becomes the Google of AI or the Apple of Solar makes up for it.
- moorhosj 8y agoAMZN has reported $6.15 billion of profits over the past year. [1] AAPL has reported $185 billion of profits over the past year (30x that of AMZN). [2] AMZN has an $865 billion market cap and AAPL has a $980 billion market cap. [1] https://finance.yahoo.com/quote/AMZN/financials?p=AMZN https://finance.yahoo.com/quote/AMZN/financials?p=AMZN [2] https://finance.yahoo.com/quote/AAPL/financials?p=AAPL https://finance.yahoo.com/quote/AAPL/financials?p=AAPL
- ckastner 8y ago(Side note: your profits for AAPL are way off, they should be around $58 billion) This is an interesting comparison, but I don't think it is an applicable one. Amazon and Apple run vastly different business, whereas BMW and Tesla compete entirely within the same market (even market segment). Furthermore, Amazon is infamous for being an outlier with regards to profit reporting, but this was generally understood to be a financially engineered situation rather than a lack of success. If I recall correctly, in 2016 or so AWS became so successful that the profits it generated couldn't be engineered away anymore, hence why we're seeing billions of profits (after 20 or so years without them).
- rcMgD2BwE72F 8y agoElon Musk has said repeatedly that the energy side of the business will grow faster and exceed the size of its car business. Many stockholders bet on this – given the multiyear advance over its competitors in both EV and battery production. They expect Tesla to combine the sales of a large car and truck manufacturer, but also of the equivalent of a global car dealer network, of an oil and gas company, a power distribution company, a roof manufacturer and installer, a P2P car renting company, an automated on-demand transportation & logistics company, etc. Other car manufacturers only manufacture and sell cars. Apple didn't stop at the iPod, obviously.