5 ms·

Tesla becomes most valuable automaker in latest stock rally

52 points by miked85 6y ago

marceloabsousa 6y ago
Impressive given that it has never made a profit! PS: https://www.theguardian.com/technology/2020/jul/01/tesla-becomes-worlds-most-valuable-carmaker-without-making-a-profit https://www.theguardian.com/technology/2020/jul/01/tesla-bec...
- meritt 6y ago
  Sir, you're in the church of Elon, and you know blasphemy is not allowed.
  - dang 6y ago
    HN is divided on that figure. You might be running into the notice-dislike bias: https://hn.algolia.com/?dateRange=all&page=0&prefix=true&query=by%3Adang%20notice%20dislike&sort=byDate&type=comment https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que....
- eindiran 6y ago
  FTA: > After several years of losses, Tesla has delivered three straight profitable quarters since the third quarter of 2019 and surprised investors with solid first-quarter deliveries despite the virus outbreak.
  - reitzensteinm 6y ago
    I think three quarters is probably still too short to declare profitability overall, especially considering there were $1.1bn in total losses the previous two quarters before that (compared to a cumulative $264m in profit the past three). There are just too many games you can play by shifting losses between quarters, and Tesla definitely engages in them (as does every other public company). You could play the game in reverse, dump the sale of things like ZEV credits in their $702m loss quarter, and end up with 5 consecutive quarters of losses. However there are rumblings of a potential Q2 2020 profit, which would be four consecutive quarters and in my (bearish for HN) mind take the "Tesla has never been profitable" criticism off the table once and for all.
- deleted 6y ago
  [deleted]
- CydeWeys 6y ago
  Is it? This was true if Amazon for well over a decade, and look at them now. If you can meaningfully reinvest into your business rather than show a profit (and pay taxes on it), then you're in a good position. Tesla has the growth that merits doing this, which is why their share price is so high.
  - denzil_correa 6y ago
    Tesla's operating margin (16 years after operation) 0.3%, Amazon's operating margin in 2010 (roughly after 16 years of operation) 4.4%
- wesammikhail 6y ago
  The least you can do is read their filing before you comment and spread misinformation.
  - deleted 6y ago
    [deleted]
- sgerenser 6y ago
  Tesla has had several profitable quarters, but I don't believe they've ever had a full year GAAP profit.
cma 6y ago
Nikola is now bigger than Ford, Fiat/Chrysler, Hyundai, Suzuki, Nissan, and Subaru
- xur17 6y ago
  Interesting. Didn't realize this was the case: https://markets.businessinsider.com/news/stocks/nikola-stock-market-value-soar-past-ford-fiat-chrysler-surpass-2020-6-1029298004 https://markets.businessinsider.com/news/stocks/nikola-stock...
- KiwiJohnno 6y ago
  Thats absolutely nuts, considering they yet to sell any cars, or book ANY revenue. People bashed Tesla for years because they weren't profitable... But at least they had revenue.
  - rcMgD2BwE72F 6y ago
    At today's NKLA valuation, Tesla was selling 20K cars a year. And Tesla had already proven the BEV are far better than FCV in every aspect (well explained by VW: https://www.volkswagen-newsroom.com/en/stories/battery-or-fuel-cell-that-is-the-question-5868 https://www.volkswagen-newsroom.com/en/stories/battery-or-fu...)
czzr 6y ago
Calling the market is a fool’s game, but that valuation makes no sense to me at all. Remember this is supposed to be the expected value weighted across up and down scenarios. The down scenarios are clear, so in what crazy world are the up scenarios enough to average out to 210 billion?
- api 6y ago
  It makes at least some sense if: (1) Some percentage of existing auto makers are asleep at the switch and are going to lose in the long term as the EV revolution gathers momentum. Note that battery prices are still dropping. Also note that COVID temporarily crashed oil prices but in the long term may lead to an oil price spike since it's bankrupting and decommissioning a ton of "enhanced recovery" and harder-to-get oil operations. When oil demand recovers supply may not be there. (2) Tesla will at least not fail, and therefore has a chance to pick up market share from auto companies that are left behind. If Tesla does more than just not fail and actually improves and grows, it could pick up quite a bit of market share. Now add... (3) Every central bank is spraying the markets with a fire hose, so if Tesla at least looks decent it may hold up against asset price inflation vs. less healthy looking auto companies.
- joewadcan 6y ago
  Tesla themselves are telling that story: 1. The world largest utility for electricity (combining Powerwalls + Solar) 2. The most profitable transportation company (personal automobiles, semi-trucks, and autonomy)
  - joewadcan 6y ago
    The difference is that people are starting to believe them now and extrapolating in a future where there's fewer other investment alternatives with high potential gains.
- martythemaniak 6y ago
  The up scenario is basically the one where Tesla's cars are Apple's Macs. Apple used the success of the mac to get itself into a number of other industries to such an extent that people now fear it will abandon the mac because it makes such a small amount from it. So what are Tesla's other business lines? Solar panel deployments (residential and industrial), battery deployments, electrical utility software providers, autonomous robotaxi services, residential HVAC. This is just things they've publicly said they're working on today. It would surprise me if they don't have an electric plane in the works by the end of this decade. Maybe industrial sabatier-process based carbon capture for jurisdictions with carbon taxes and Mars bases. Basically, they have enough "bets" that you can believe, if you want to.
yrral 6y ago
I don't understand the mentality people have when calling Tesla an automaker. Automakers today traditionally outsource a majority of their parts and are just glorified assemblers. Meanwhile tesla has much more vertical integration in their cars and owns much more of the stack, from the batteries (there are even rumors they'll go into mining to secure steady supply), to their software and self driving stack, to grid storage, etc. I'm not sure exactly what I'm getting at here, but it reminds me of back in the day when people called amazon just a bookstore.
- Andrex 6y ago
  Amazon began selling more than books, Tesla is still only automobiles. I'm not sure the analogy holds up, unless Tesla started licensing out parts of their vertical integration (such as how Sony's image sensor business licenses and contracts to all kinds of non-Sony devices.)
  - xur17 6y ago
    Tesla also sells batteries and solar panels. And folks would argue that Tesla is more software focused than other car makers (and therefore should be able to command a larger margin).
  - rcMgD2BwE72F 6y ago
    >Amazon began selling more than books, Tesla is still only automobiles. 82% of Tesla revenues are from the automotive segment. https://ir.tesla.com/static-files/c1723af4-ffda-4881-ae12-b6f3c972b795 https://ir.tesla.com/static-files/c1723af4-ffda-4881-ae12-b6...
- agumonkey 6y ago
  I think you're twisting reality a tiny bit. Car brands have used all kinds of partnerships from car body design, to engines. Just last week I learned that DMC Delorean use a PRV engine. PRV standing for Peugeot Renault Volvo. 3 European brands, nothing American in it.. Same goes for airplanes, boeing and airbus uses parts from similar suppliers.
agumonkey 6y ago
who's buying which rumor ? battery day ?
woodandsteel 6y ago
The valuation makes sense. In the coming years the auto market is going to be moving rapidly to ev's and away from ice's. Demand for ev's is going to outrun supply, in part due to battery shortages. Tesla is expanding rapidly and is going to be in a better position than any other car maker to take advantage of the situation, though lately VW has also getting very serious about ev's.
fallingfrog 6y ago
Generally market bubbles come to an end when you run out of fools, but in this case the supply of fools seems just limitless. What’s the story here? Where are they coming from? Is it massive leverage? Is it free money from the fed? What accounts for the endless supply of idiots? I really do want to know who is buying at these prices and where they are getting the cash to do so.

52 points by miked85 6y ago

Impressive given that it has never made a profit! PS: https://www.theguardian.com/technology/2020/jul/01/tesla-becomes-worlds-most-valuable-carmaker-without-making-a-profit https://www.theguardian.com/technology/2020/jul/01/tesla-bec...

meritt 6y ago
Sir, you're in the church of Elon, and you know blasphemy is not allowed.
- dang 6y ago
  HN is divided on that figure. You might be running into the notice-dislike bias: https://hn.algolia.com/?dateRange=all&page=0&prefix=true&query=by%3Adang%20notice%20dislike&sort=byDate&type=comment https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que....
eindiran 6y ago
FTA: > After several years of losses, Tesla has delivered three straight profitable quarters since the third quarter of 2019 and surprised investors with solid first-quarter deliveries despite the virus outbreak.
- reitzensteinm 6y ago
  I think three quarters is probably still too short to declare profitability overall, especially considering there were $1.1bn in total losses the previous two quarters before that (compared to a cumulative $264m in profit the past three). There are just too many games you can play by shifting losses between quarters, and Tesla definitely engages in them (as does every other public company). You could play the game in reverse, dump the sale of things like ZEV credits in their $702m loss quarter, and end up with 5 consecutive quarters of losses. However there are rumblings of a potential Q2 2020 profit, which would be four consecutive quarters and in my (bearish for HN) mind take the "Tesla has never been profitable" criticism off the table once and for all.
deleted 6y ago
[deleted]
CydeWeys 6y ago
Is it? This was true if Amazon for well over a decade, and look at them now. If you can meaningfully reinvest into your business rather than show a profit (and pay taxes on it), then you're in a good position. Tesla has the growth that merits doing this, which is why their share price is so high.
- denzil_correa 6y ago
  Tesla's operating margin (16 years after operation) 0.3%, Amazon's operating margin in 2010 (roughly after 16 years of operation) 4.4%
wesammikhail 6y ago
The least you can do is read their filing before you comment and spread misinformation.
- deleted 6y ago
  [deleted]
sgerenser 6y ago
Tesla has had several profitable quarters, but I don't believe they've ever had a full year GAAP profit.

cma 6y ago

Nikola is now bigger than Ford, Fiat/Chrysler, Hyundai, Suzuki, Nissan, and Subaru

xur17 6y ago
Interesting. Didn't realize this was the case: https://markets.businessinsider.com/news/stocks/nikola-stock-market-value-soar-past-ford-fiat-chrysler-surpass-2020-6-1029298004 https://markets.businessinsider.com/news/stocks/nikola-stock...
KiwiJohnno 6y ago
Thats absolutely nuts, considering they yet to sell any cars, or book ANY revenue. People bashed Tesla for years because they weren't profitable... But at least they had revenue.
- rcMgD2BwE72F 6y ago
  At today's NKLA valuation, Tesla was selling 20K cars a year. And Tesla had already proven the BEV are far better than FCV in every aspect (well explained by VW: https://www.volkswagen-newsroom.com/en/stories/battery-or-fuel-cell-that-is-the-question-5868 https://www.volkswagen-newsroom.com/en/stories/battery-or-fu...)

czzr 6y ago

Calling the market is a fool’s game, but that valuation makes no sense to me at all. Remember this is supposed to be the expected value weighted across up and down scenarios. The down scenarios are clear, so in what crazy world are the up scenarios enough to average out to 210 billion?

api 6y ago
It makes at least some sense if: (1) Some percentage of existing auto makers are asleep at the switch and are going to lose in the long term as the EV revolution gathers momentum. Note that battery prices are still dropping. Also note that COVID temporarily crashed oil prices but in the long term may lead to an oil price spike since it's bankrupting and decommissioning a ton of "enhanced recovery" and harder-to-get oil operations. When oil demand recovers supply may not be there. (2) Tesla will at least not fail, and therefore has a chance to pick up market share from auto companies that are left behind. If Tesla does more than just not fail and actually improves and grows, it could pick up quite a bit of market share. Now add... (3) Every central bank is spraying the markets with a fire hose, so if Tesla at least looks decent it may hold up against asset price inflation vs. less healthy looking auto companies.
joewadcan 6y ago
Tesla themselves are telling that story: 1. The world largest utility for electricity (combining Powerwalls + Solar) 2. The most profitable transportation company (personal automobiles, semi-trucks, and autonomy)
- joewadcan 6y ago
  The difference is that people are starting to believe them now and extrapolating in a future where there's fewer other investment alternatives with high potential gains.
martythemaniak 6y ago
The up scenario is basically the one where Tesla's cars are Apple's Macs. Apple used the success of the mac to get itself into a number of other industries to such an extent that people now fear it will abandon the mac because it makes such a small amount from it. So what are Tesla's other business lines? Solar panel deployments (residential and industrial), battery deployments, electrical utility software providers, autonomous robotaxi services, residential HVAC. This is just things they've publicly said they're working on today. It would surprise me if they don't have an electric plane in the works by the end of this decade. Maybe industrial sabatier-process based carbon capture for jurisdictions with carbon taxes and Mars bases. Basically, they have enough "bets" that you can believe, if you want to.

yrral 6y ago

I don't understand the mentality people have when calling Tesla an automaker. Automakers today traditionally outsource a majority of their parts and are just glorified assemblers. Meanwhile tesla has much more vertical integration in their cars and owns much more of the stack, from the batteries (there are even rumors they'll go into mining to secure steady supply), to their software and self driving stack, to grid storage, etc. I'm not sure exactly what I'm getting at here, but it reminds me of back in the day when people called amazon just a bookstore.

Andrex 6y ago
Amazon began selling more than books, Tesla is still only automobiles. I'm not sure the analogy holds up, unless Tesla started licensing out parts of their vertical integration (such as how Sony's image sensor business licenses and contracts to all kinds of non-Sony devices.)
- xur17 6y ago
  Tesla also sells batteries and solar panels. And folks would argue that Tesla is more software focused than other car makers (and therefore should be able to command a larger margin).
- rcMgD2BwE72F 6y ago
  >Amazon began selling more than books, Tesla is still only automobiles. 82% of Tesla revenues are from the automotive segment. https://ir.tesla.com/static-files/c1723af4-ffda-4881-ae12-b6f3c972b795 https://ir.tesla.com/static-files/c1723af4-ffda-4881-ae12-b6...
agumonkey 6y ago
I think you're twisting reality a tiny bit. Car brands have used all kinds of partnerships from car body design, to engines. Just last week I learned that DMC Delorean use a PRV engine. PRV standing for Peugeot Renault Volvo. 3 European brands, nothing American in it.. Same goes for airplanes, boeing and airbus uses parts from similar suppliers.

agumonkey 6y ago

who's buying which rumor ? battery day ?

woodandsteel 6y ago

The valuation makes sense. In the coming years the auto market is going to be moving rapidly to ev's and away from ice's. Demand for ev's is going to outrun supply, in part due to battery shortages. Tesla is expanding rapidly and is going to be in a better position than any other car maker to take advantage of the situation, though lately VW has also getting very serious about ev's.

fallingfrog 6y ago

Generally market bubbles come to an end when you run out of fools, but in this case the supply of fools seems just limitless. What’s the story here? Where are they coming from? Is it massive leverage? Is it free money from the fed? What accounts for the endless supply of idiots? I really do want to know who is buying at these prices and where they are getting the cash to do so.