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Unfortunately for Tesla, at its current valuation, nobody is going to buy it. The race now is between established players catching up to Tesla and its technolo

Unfortunately for Tesla, at its current valuation, nobody is going to buy it. The race now is between established players catching up to Tesla and its technology, and Tesla catching up to established players with their capacity to produce cars at scale.

lazyjones 8y ago
> Unfortunately for Tesla, at its current valuation, nobody is going to buy it. A stock-for-stock merger is also a possibility, it's been done before.
- cinquemb 8y ago
  In this case, the interested potential acquirer would have to move heaven and earth to avoid an instant credit downgrade (assuming they have investment grade status now) at current valuations.
  - bryanlarsen 8y ago
    Toyota has a lot more debt and a significantly higher debt/equity ratio than Tesla has, a merger shouldn't have a material impact on credit ratings. Also, I feel quite confident in stating that the short-term market cap of the two companies merged would be significantly higher than the two companies separate. Toyota has a P/E of 10 (!). A merger would make it "cool", giving it a better ratio. Not Tesla's ~50 (based on quadrupling the last quarter earnings; TTM earnings are negative), but something higher than 10. And since Toyota has significant earnings, increasing the multiple of a big number.... Long term I'm not so sure it's a good strategy but a superficially the synergy looks awesome: combine Tesla's innovation and hype with Toyota's ability to deliver high quality cars.
    - deleted 8y ago
      [deleted]
threeseed 8y ago
If you look at the Volvo Polestar it is easily a peer of Tesla and far exceeds it on the software front with the partnership with Google. And the car companies are playing in mass market segments that Tesla isn't in e.g. Kia Soul, Renault Zoe, Ford Focus, VW e-Golf etc.
- natch 8y ago
  >Polestar Comparing vaporware to current Tesla cars makes no sense at all. And I still have a Volvo. The quality level is astoundingly bad. You don’t want a Volvo.
- rconti 8y ago
  The Polestar is not shipping. I had a brand new S90 rental last year, and the software was.. not great. Tesla's just starting in that mass market segment. The prices are very very close to the ones you cite.
mrtksn 8y ago
What technology exactly do the established players are catching up to? I'm under impression that the value of Tesla comes from the brand itself and Elon Musk's persona. The tech itself is nothing special, they are far behind in autonomous driving but the brand is very strong, they easily upsell "one day it will be autonomous" packages.
- leesec 8y ago
  Their whole car is a computer that can receive OTA updates. ( please show me an instance where a major car company sent 5% performance increase over the internet ) Their battery tech is better than everyones. ( Why is the Audi E-tron and Jaguar I-pace Less range than even the cheapest Tesla? ) Their autonomous is better than everyones. ( Don't know why you think they're far behind, the only other player with a comparable product is Supercruise and that is on one version of Cadillac ). The data they have on their cars/collection pipeline is better than everyones. Because their car is software there are all sorts of quality of life perks that exist from the dashboard. So tired of hearing these cars aren't any better when they're some of the highest rated cars of all time and consistently compete with cars much more expensive.
  - clouddrover 8y ago
    > Their battery tech is better than everyones. ( Why is the Audi E-tron and Jaguar I-pace Less range than even the cheapest Tesla? ) The Audi e-tron deliberately over-provisioned the battery to give it a longer life and to enable faster charging. Only 88% of the battery (about 83 kwh) is available for use, but the upside of that is the e-tron can maintain a 150 kilowatt charge rate up to 80% state of charge which no other current EV can do: https://support.fastned.nl/hc/en-gb/articles/115015420127-175-kW-fast-chargers https://support.fastned.nl/hc/en-gb/articles/115015420127-17... Not even the Tesla Model 3 on the new Tesla V3 chargers: https://electrek.co/2019/03/07/tesla-v3-supercharger-action-first-look/ https://electrek.co/2019/03/07/tesla-v3-supercharger-action-... The e-tron's main problem is that it's too heavy for the battery it has. It either needs a bigger battery or a lighter construction or both. But the Hyundai Kona EV, the Kia Niro EV, and the new Kia Soul EV all have good range for a good price. The Kona narrowly beat the Model X in this 1000 km road trip comparison: https://insideevs.com/hyundai-kona-electric-race-tesla-model-x-video/ https://insideevs.com/hyundai-kona-electric-race-tesla-model... Tesla doesn't seem very far ahead.
konschubert 8y ago
Or maybe Tesla’s valuation catching up with its capacity to produce and sell cars at scale.

lazyjones 8y ago

> Unfortunately for Tesla, at its current valuation, nobody is going to buy it. A stock-for-stock merger is also a possibility, it's been done before.

cinquemb 8y ago
In this case, the interested potential acquirer would have to move heaven and earth to avoid an instant credit downgrade (assuming they have investment grade status now) at current valuations.
- bryanlarsen 8y ago
  Toyota has a lot more debt and a significantly higher debt/equity ratio than Tesla has, a merger shouldn't have a material impact on credit ratings. Also, I feel quite confident in stating that the short-term market cap of the two companies merged would be significantly higher than the two companies separate. Toyota has a P/E of 10 (!). A merger would make it "cool", giving it a better ratio. Not Tesla's ~50 (based on quadrupling the last quarter earnings; TTM earnings are negative), but something higher than 10. And since Toyota has significant earnings, increasing the multiple of a big number.... Long term I'm not so sure it's a good strategy but a superficially the synergy looks awesome: combine Tesla's innovation and hype with Toyota's ability to deliver high quality cars.
  - deleted 8y ago
    [deleted]

threeseed 8y ago

If you look at the Volvo Polestar it is easily a peer of Tesla and far exceeds it on the software front with the partnership with Google. And the car companies are playing in mass market segments that Tesla isn't in e.g. Kia Soul, Renault Zoe, Ford Focus, VW e-Golf etc.

natch 8y ago
>Polestar Comparing vaporware to current Tesla cars makes no sense at all. And I still have a Volvo. The quality level is astoundingly bad. You don’t want a Volvo.
rconti 8y ago
The Polestar is not shipping. I had a brand new S90 rental last year, and the software was.. not great. Tesla's just starting in that mass market segment. The prices are very very close to the ones you cite.

mrtksn 8y ago

What technology exactly do the established players are catching up to? I'm under impression that the value of Tesla comes from the brand itself and Elon Musk's persona. The tech itself is nothing special, they are far behind in autonomous driving but the brand is very strong, they easily upsell "one day it will be autonomous" packages.

leesec 8y ago
Their whole car is a computer that can receive OTA updates. ( please show me an instance where a major car company sent 5% performance increase over the internet ) Their battery tech is better than everyones. ( Why is the Audi E-tron and Jaguar I-pace Less range than even the cheapest Tesla? ) Their autonomous is better than everyones. ( Don't know why you think they're far behind, the only other player with a comparable product is Supercruise and that is on one version of Cadillac ). The data they have on their cars/collection pipeline is better than everyones. Because their car is software there are all sorts of quality of life perks that exist from the dashboard. So tired of hearing these cars aren't any better when they're some of the highest rated cars of all time and consistently compete with cars much more expensive.
- clouddrover 8y ago
  > Their battery tech is better than everyones. ( Why is the Audi E-tron and Jaguar I-pace Less range than even the cheapest Tesla? ) The Audi e-tron deliberately over-provisioned the battery to give it a longer life and to enable faster charging. Only 88% of the battery (about 83 kwh) is available for use, but the upside of that is the e-tron can maintain a 150 kilowatt charge rate up to 80% state of charge which no other current EV can do: https://support.fastned.nl/hc/en-gb/articles/115015420127-175-kW-fast-chargers https://support.fastned.nl/hc/en-gb/articles/115015420127-17... Not even the Tesla Model 3 on the new Tesla V3 chargers: https://electrek.co/2019/03/07/tesla-v3-supercharger-action-first-look/ https://electrek.co/2019/03/07/tesla-v3-supercharger-action-... The e-tron's main problem is that it's too heavy for the battery it has. It either needs a bigger battery or a lighter construction or both. But the Hyundai Kona EV, the Kia Niro EV, and the new Kia Soul EV all have good range for a good price. The Kona narrowly beat the Model X in this 1000 km road trip comparison: https://insideevs.com/hyundai-kona-electric-race-tesla-model-x-video/ https://insideevs.com/hyundai-kona-electric-race-tesla-model... Tesla doesn't seem very far ahead.

konschubert 8y ago

Or maybe Tesla’s valuation catching up with its capacity to produce and sell cars at scale.