5 ms·

Give it a few years. I'm still skeptical that Tesla should be worth more than all the other auto companies combined.

option 6y ago
In addition to making cars people want, Tesla also makes their own software, chips for AI inference and training, batteries, charging network, home energy solutions (solar+ battery). All of these not just related products but a cohesive strategy with sum much equal to its parts. Which other automaker does that? Edit: Having said that, I bought them long ago at their IPO price and sold long ago when they were around 300 pre-splits. The current valuation is indeed a little risky.
- mike00632 6y ago
  I agree. I even own Tesla stock. But Tesla 1) still has a lot of scaling to get through before they reach anything close to the sales volume of their competition. Elon talks a lot about scaling but Tesla is still microscopic compared to other manufacturers. The business operations of a much larger company will present challenges in communication, structure, quality assurance, legal liabilities in various jurisdictions, not to mention the struggle of sourcing battery components. Tesla scaling is not as easy as spinning up additional Kubernetes pods. 2) The competition WILL electrify. Tesla is not likely to have more than 6 models in the coming years yet they will compete with hundreds of models from different companies that cater to different niches. Any company that offers an electric vehicle with physical buttons instead of a touchscreen has my attention. 3) Tesla workers will unionize and/or mature away from the company. I grew up around Detroit and witnessed a lot of labor dynamics with the UAW. Assuming Tesla succeeds in preventing a union the workers will eventually cash out their stock and leave for better offers at other automotive companies or spin off their services into tier automotive groups. Why write software for Tesla robots when the robot company will hire you to write software for all auto companies?
  - krrrh 6y ago
    The competition has electrified. America is just behind the trend. https://twitter.com/asymco/status/1352335793025650695?s=20 https://twitter.com/asymco/status/1352335793025650695?s=20
omgwtfbyobbq 6y ago
You mean their market value right? Tesla's enterprise value (EV) is pretty high thanks to their market value, but they have a ways to go before they surpass the EV of everyone else combined. Also, they're an energy company too, which means at least some of their speculative valuation is in energy, which is a totally different market.
worker767424 6y ago
Depends if they can have profit margins a lot higher than other auto companies. They probably can't, but higher profit margins are one way to justify a valuation. Really, it's priced higher because people like the brand, even if it's run by someone easily distracted who used shareholder money to bail out his cousin's solar business who goes around making 420 tweets, and that's when he's not calling people pedophiles. Oh, and their hubris kills people.
- mschuster91 6y ago
  > Oh, and their hubris kills people. Killing people comes with manufacturing automobiles. Takata airbags and other "cost cutting" disasters, selling cars that can go 300+ km/h which can't be legally driven at that speed anywhere except race tracks and German autobahns, making safety features such as seat belts, side mirrors, traction control etc. optional until the government regulators have had enough deaths and mandate it...
- mike00632 6y ago
  I suspect the profit margin for a $50k gas guzzling truck is pretty high.
  - splistud 6y ago
    And yet the car companies make very little
marvin 6y ago
Regardless, it should definitely be worth more than the $8 per share that it was in 2013, or the $45 per share that it was in 2014. Short sellers were clamoring very loudly then too. Lots of people preached "the market can stay irrational longer than you can stay solvent". Eventually, of course, if a security keeps only going up, this mantra will become true. The point is that sometimes, a bet that seems like a sure thing will blow up spectacularly. And that not everyone who takes such a bet is obviously wrong.
- mike00632 6y ago
  Why should it be worth $8 a share? Do you really want GameStop in your retirement portfolio? It's pretty clear to me that it will, and should, be worth $0 eventually.

In addition to making cars people want, Tesla also makes their own software, chips for AI inference and training, batteries, charging network, home energy solutions (solar+ battery). All of these not just related products but a cohesive strategy with sum much equal to its parts. Which other automaker does that? Edit: Having said that, I bought them long ago at their IPO price and sold long ago when they were around 300 pre-splits. The current valuation is indeed a little risky.

mike00632 6y ago
I agree. I even own Tesla stock. But Tesla 1) still has a lot of scaling to get through before they reach anything close to the sales volume of their competition. Elon talks a lot about scaling but Tesla is still microscopic compared to other manufacturers. The business operations of a much larger company will present challenges in communication, structure, quality assurance, legal liabilities in various jurisdictions, not to mention the struggle of sourcing battery components. Tesla scaling is not as easy as spinning up additional Kubernetes pods. 2) The competition WILL electrify. Tesla is not likely to have more than 6 models in the coming years yet they will compete with hundreds of models from different companies that cater to different niches. Any company that offers an electric vehicle with physical buttons instead of a touchscreen has my attention. 3) Tesla workers will unionize and/or mature away from the company. I grew up around Detroit and witnessed a lot of labor dynamics with the UAW. Assuming Tesla succeeds in preventing a union the workers will eventually cash out their stock and leave for better offers at other automotive companies or spin off their services into tier automotive groups. Why write software for Tesla robots when the robot company will hire you to write software for all auto companies?
- krrrh 6y ago
  The competition has electrified. America is just behind the trend. https://twitter.com/asymco/status/1352335793025650695?s=20 https://twitter.com/asymco/status/1352335793025650695?s=20

omgwtfbyobbq 6y ago

You mean their market value right? Tesla's enterprise value (EV) is pretty high thanks to their market value, but they have a ways to go before they surpass the EV of everyone else combined. Also, they're an energy company too, which means at least some of their speculative valuation is in energy, which is a totally different market.

worker767424 6y ago

Depends if they can have profit margins a lot higher than other auto companies. They probably can't, but higher profit margins are one way to justify a valuation. Really, it's priced higher because people like the brand, even if it's run by someone easily distracted who used shareholder money to bail out his cousin's solar business who goes around making 420 tweets, and that's when he's not calling people pedophiles. Oh, and their hubris kills people.

mschuster91 6y ago
> Oh, and their hubris kills people. Killing people comes with manufacturing automobiles. Takata airbags and other "cost cutting" disasters, selling cars that can go 300+ km/h which can't be legally driven at that speed anywhere except race tracks and German autobahns, making safety features such as seat belts, side mirrors, traction control etc. optional until the government regulators have had enough deaths and mandate it...
mike00632 6y ago
I suspect the profit margin for a $50k gas guzzling truck is pretty high.
- splistud 6y ago
  And yet the car companies make very little

marvin 6y ago

Regardless, it should definitely be worth more than the $8 per share that it was in 2013, or the $45 per share that it was in 2014. Short sellers were clamoring very loudly then too. Lots of people preached "the market can stay irrational longer than you can stay solvent". Eventually, of course, if a security keeps only going up, this mantra will become true. The point is that sometimes, a bet that seems like a sure thing will blow up spectacularly. And that not everyone who takes such a bet is obviously wrong.

mike00632 6y ago
Why should it be worth $8 a share? Do you really want GameStop in your retirement portfolio? It's pretty clear to me that it will, and should, be worth $0 eventually.