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> To justify their current valuation, the “bull case” is for them to dominate the entire automative industry (not just the EV segment) Toyota has over twice th

• hyperbovine 7y ago
  The argument is not that no car maker deserves to be valued at $XXX billion. It's that Tesla, which produced around ~1/30th the number of autos as Toyota last year, probably shouldn't have a market cap that's anywhere near Toyota's.
  • grecy 7y ago
    I think your mistake is in assuming that Tesla only makes cars, and the number of them they make is the only factor that goes into their valuation. They also have the world's biggest charging network, storage solutions, solar solutions and produce more batteries than virtually everyone else combined. Mercedes actually just put out a press release that said they can't build enough electric cars because they can't build enough batteries, because Tesla acquired the company they were going to use in 2016. Evidently Mercedes have done exactly zero about that in the years since. Of course Tesla also have the whole "self driving car" thing they've been working on for a while. If they crack that one in the next ~24 months, their valuation will easily top Toyota's, because they're worth so much more than just how many cars they can build.
    • xkjkls 7y ago
      How much of their revenue comes from not making cars?
      • grecy 7y ago
        Good point. Right now it's not much, but I think the valuation is based on the speculation that it could soon be a lot. Right now revenue from energy storage resembles Tesla's auto business in 2013[1].. so if it grows at the same rate... [1] https://twitter.com/kerooke/status/1222637828741439488 https://twitter.com/kerooke/status/1222637828741439488
        • xkjkls 7y ago
          Their solar business, which they purchased, has declined every year since the acquisition
          • jlbooker 7y ago
            Until now. "The company marked a 26% quarter-on-quarter increase in solar installations" https://cleantechnica.com/2020/01/29/tesla-energy-lifts-off-with-26-qoq-increase-in-solar-136-yoy-increase-in-storage/ https://cleantechnica.com/2020/01/29/tesla-energy-lifts-off-...
            • xkjkls 7y ago
              QoQ. They still showed a YoY decline for 2019. And that's in a market that's been expanding, so they've significantly lost market share.
      • nickik 7y ago
        What is important is that they can make money from selling lots of electric cars. While the other companies get horrifying margin on their electric car and they have no clue how to make money with them.
        • xkjkls 7y ago
          Can they? They had a loss of $800 million in 2019, and that’s with over $500 million in regulatory credit sales boosting that. The EV market still seems like it incinerates capital
          • nickik 7y ago
            They lost that money because they had to repay massive amount of debt early in the year. They did that successfully and once that debt was payed they were profitable. What matters is that they produce lots of cars and the cars have a better then expected profit margin, focusing on anything else is simply foolish.
            • xkjkls 7y ago
              No, that’s GAAP loss, so that doesn’t include any debt repayments. That’s what the business generated. And they produced the most cars they ever did and still lost money for the tenth consecutive year, in a year where the expectations given from Wall Street and the company were to make money.
    • reitzensteinm 7y ago
      Can you please link me to this press release?
      • grecy 7y ago
        Press release for what?
        • reitzensteinm 7y ago
          This: "Mercedes actually just put out a press release that said they can't build enough electric cars because they can't build enough batteries, because Tesla acquired the company they were going to use in 2016. "
          • grecy 7y ago
            Here's the original (in german) https://teslamag.de/news/betriebsrat-tesla-ist-mitschuld-an-batteriemangel-fuer-mercedes-elektroauto-eqc-26661 https://teslamag.de/news/betriebsrat-tesla-ist-mitschuld-an-... And translated https://www.reddit.com/r/teslamotors/comments/euob34/the_cribbing_is_real_works_council_tesla_is/ https://www.reddit.com/r/teslamotors/comments/euob34/the_cri...
            • reitzensteinm 7y ago
              That's not a press release from Mercedes, and given that Mercedes denied the core allegation that production would be halved this year, I would probably give them the benefit of the doubt on the rest...
  • kanox 7y ago
    Stock valuation also includes future growth and Tesla is consistently showing large growth in deliveries and expanding with new factories. This growth will eventually plateau but it's a good bet that it will do so with millions of cars in production.
• imtringued 7y ago
  One of them has manufactured 900k cars the other manufactured more than 200 million. Even if Tesla were the market leader and reached peak production rates of 10 million cars per year it would still take 20 years to catch up and justify that valuation.
  • megablast 7y ago
    What does the total car manufactures have to do with anything at all? Cars sold last year, sure, that makes sense.