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I have two separate and (mostly) unrelated feelings. Musk has done something remarkable as you say. At the same time, the market cap is nuts and a portent of

I have two separate and (mostly) unrelated feelings. Musk has done something remarkable as you say. At the same time, the market cap is nuts and a portent of doom. Bigger than all car companies combined, by market cap? A market crash could take down Tesla and set back electric car adoption by 20 years.

legulere 5y ago
It wouldn’t, even traditional car manufacturers like VW are massively ramping up their electric car production. They just don’t have Elon musk for PR
- tim-- 5y ago
  Voltswagen definitely made some noise. I think the other large car manufacturers have been learning a few tricks.
- zarkov99 5y ago
  They also do not have the technology, the software capabilities or the charging network. In fact all they have is PR right now. Their EV offering is at 5 to 8 years behind Tesla and and they are moving slower in R&D.
  - f6v 5y ago
    > the software capabilities Am I wrong or the cars were running software for at least a decade? What kind of software can’t VW develop?
    - dkirill 5y ago
      Traditional manufactures software sucks in every way possible
AYBABTME 5y ago
I think the cat is out of the bag for EVs: enough people have tasted them and wouldn't go back, and enough manufacturers got into the game, that even if Tesla was to fail, enough people would be asking for it, and enough manufacturers would already be advanced enough in their plans to keep the ball rolling. Basically, Tesla's mission is 99% accomplished.
- sharken 5y ago
  In Europe there is still too few charging facilities. Basically an EV only makes sense if you own a house and can get your own charger. The V2 supercharger still needs around 20 minutes for an 80% charge, while the new BMW iX3 needs around 30 minutes for 80%. The Tesla V3 supercharger is promising, but the killer feature will be a unified charging platform and not one for each car maker.
  - iso1631 5y ago
    > Basically an EV only makes sense if you own a house and can get your own charger. New houses in the UK have required chargers as part of planning permission for 5 years. Most people have, or can have, a 3KW socket installed in their driveway, very cheaply (like 2-3 tanks of fuel) 73% of cars in the UK are parked on private property overnight. Most cars do under 8,000 miles a year, or 160 miles a week, 77% of cars passing an MOT in 2019 did under 10,000 miles/year, or 200 miles a week. At 5 miles per KWh, that's 15mph of charging, or 200 miles in one overnight charge.
    - Angostura 5y ago
      There are large city areas with no off-street parking. I'm currently sitting in a terraced house in East London.
      - iso1631 5y ago
        37% of cars in urban areas are parked on the street. There's a whole separate question about why so many people in urban areas have cars of course. The direction of travel is that it will be uneconomical to keep a petrol car in London in 10 years time, even if they were still available for sale, so it's fairly meaningless. People will have to adapt.
bpodgursky 5y ago
Tesla doesn't _need_ to raise more money now though. They may do so to accelerate factory buildouts etc, but it's cash-positive. So a stock crash would be inconvenient, but unless it leads to a shareholder revolt or something, wouldn't really matter.
brtkdotse 5y ago
> A market crash could take down Tesla and set back electric car adoption by 20 years. Why? Even if TSLA dropped to 1 cent today, all factories, employees, supply chain, IP, sales channels etc would remain intact.
aero-glide2 5y ago
Lets start with two assumptions. In 10 years, majority of cars sold will be electric. Majority of cars sold will have self driving capability. Tesla is a leader in both. Much of the traditional knowledge companies have about ICE engines do not help them build a better electric car. That knowledge is worthless for the future. Stock price represents future value.
- BluntleyHonest 5y ago
  God I wish stupid people like you didn't exist.
  - meowface 5y ago
    I don't mind harsh or critical comments, but you're going to have to at least add some substance if you want any effect.
- kaba0 5y ago
  In electric cars, the battery is the only “hard” part, and that is (or maybe just was) “third-party” even for Tesla. And level 2 is not self-driving and is just dangerous. And I don’t see how would we get to level 3, let alone higher levels. And stock price represents.. basically hype, which is remotely may be based on some figures.
  - deleted 5y ago
    [deleted]
- oblio 5y ago
  > Much of the traditional knowledge companies have about ICE engines do not help them build a better electric car. True, but look around at the electric platforms being developed by traditional car companies. Mercedes has one, BMW has one, VW has one, Nissan has one, etc. Most of them will be transitioning. The stock price represents future value where that value is Tesla absolutely crushing everyone else, which we can now say with ~80% confidence won't happen. Irrational exuberance.
- 5y ago
jillesvangurp 5y ago
Tesla is not just a car company. They are diversifying their income. Trucks, vans, are things they are planning to do but are holding back on because of a lack of battery to build those and because of continued spectacular demand for very lucrative high end cars. And that's just vehicles. Their solar business is scaling nicely. Grid storage is a growth market as well. And of course they are pairing their solar with domestic storage as well. All rapid growth markets. That's why their market cap is what it is. Multiple rapid growth markets, a proven ability to scale and execute, etc. That's why investors love them. A market crash would be brutal for everyone. Particularly those with struggling product lines and outdated products that are very dependent on both to secure the revenue to invest themselves out of that mess.
- TheTrotters 5y ago
  Yeah, perhaps it's easier to understand Tesla's valuation if we look at is as a solar energy company, not just a car company.
  - dannyw 5y ago
    No, that gets even harder to understand, as Tesla sucks at solar.
- mupuff1234 5y ago
  Most car manufacturers sell trucks, vans, etc as well.
hurril 5y ago
No, a market crash would not touch Tesla as the stock and the company are two different things. The fact that a lot of people want to pay top dollar to own a share of the pie is not the Tesla operations churning out cars (or not.)
- jpgvm 5y ago
  This is correct. To add TSLA took advantage of it's massive stock price rise to pad it's coffers with a number of stock offerings. They now have a warchest of billions of cash and cash equivalents (like BTC) that they can use to expand without going back to the public market for cash for a while. Especially with their cash flows looking a lot better now.
  - hurril 5y ago
    Yes. A lot of the stock rockets do this now, so sure - that connects the stock to the company.
alexc05 5y ago
If you're still seeing tesla as a car company you're missing their home-energy business and their utility business. Look at the australian mega-battery project. They've reduced power outages and normalized the grid. As household solar+battery installs grow, they're going to eat into the massive utility business. They're much bigger than cars because they are not just cars.
- tenpies 5y ago
  > If you're still seeing tesla as a car company you're missing their home-energy business and their utility business. Tesla Energy lost a little over $100 MM this quarter. Last quarter they lost less money. Solar installs have never recovered from the 2016 peak - they're barely at 50% what they were then. The economy of scale is working in the wrong way and Tesla is competing in a commodity space against companies who are vertically integrated and specialize in the type of batteries and solar panels in use - in fact Tesla often buys batteries from them. This is like if Apple were selling iron ore. The fan boy consumer may pay a 100% premium, but 99.9% of the world will just buy the cheapest iron ore around.
jxidjhdhdhdhfhf 5y ago
Tesla is not terribly dependent on its share price. They have 17 Billion in cash on hand so they can fund their operations for quite a few years to come, even in a market downturn (we had a market downturn last year by the way in which they continued to grow). A large drop in shareholders certainly would disappoint shareholders but they are the ones valuing Tesla so high. Musk is on the record saying the share price is too high and it's factoring in a ton of potential future growth.
carlivar 5y ago
A few years ago I'd agree it would be a major EV setback but there are so many other options now I don't think that's the case any longer. I'm very optimistic about Rivian. It's Tesla but without the ego thinking they are smarter than 50 years of manufacturing lessons.
- paranoidrobot 5y ago
  I think that if Tesla were to go belly-up because of some sharemarket issue, that it'd be very easy for all the other manufacturers to back off their BEV plans. Not necessarily outright cancel them, but just not push for it and possibly let it fizzle somewhat. They'd have the excuse that "Well, Tesla failed, and they were more valuable than all of us combined at one point, so... we'll just be more cautious" One major issue is adoption. While there's a whole lot of people who want BEVs, price is still a major concern, as is infrastructure. Tesla make it dead simple with their supercharger network - find a charger, plug in, fast charging happens. The find a charger thing is integrated into the car, and often has feedback about what chargers are busy or unavailable. Unfortunately, outside of Europe and the UK, the BEV charging story is pretty terrible. Volkswagon, who arguably have the biggest incentive to make this work, have a pretty atrocious charging experience in the US, as demonstrated by Engineering Explained[1] with their latest and greatest model the 'ID.4' Europe and the UK have put down standards and basically forced some level of interoperation between charging network systems, which reduced friction for EV owners. The other issue is getting dealers onboard. If you're someone for whom an EV might make a whole lot of sense, there's approximately zero chance you're going to get recommended an EV, even if the dealer has one to sell you (either because the dealership dont' keep units to test-drive, or the manufacturer doesn't sell a BEV). Dealers hate them, because there's little to no after-sales servicing requirement. I've seen many stories about people basically having to argue or beg a dealer to let them buy or even order an EV. Perhaps Manufacturers could go with direct sales a-la Tesla, but there seems to still be a lot of political power left in the dealer networks, so that isn't necessarily going to be possible any time soon. What will convince me that EVs are here to stay is when dealerships are pushing BEVs right alongside their ICEs. [1] https://www.youtube.com/watch?v=EotuxCptcM4 https://www.youtube.com/watch?v=EotuxCptcM4
dillon 5y ago
I kindly disagree with your critique. BUT I am also very biased. This is because I am an owner of a Model Y, but I do not own any stock in Tesla whatsoever. I do not like nor trust Elon Musk, especially with my retirement. I think people want EV's and when they see that they only need to spend a little bit extra for that extra range and access to a nationwide supercharger network. They are willing to pay for it. I don't think a drop in stock is going to change that mentality. Other automakers keep trying to build a quality EV, but they simply do not hold up to a Tesla.
- BluntleyHonest 5y ago
  Tesla are shit cars, just like most of their owners are shit people.

legulere 5y ago

It wouldn’t, even traditional car manufacturers like VW are massively ramping up their electric car production. They just don’t have Elon musk for PR

tim-- 5y ago
Voltswagen definitely made some noise. I think the other large car manufacturers have been learning a few tricks.
zarkov99 5y ago
They also do not have the technology, the software capabilities or the charging network. In fact all they have is PR right now. Their EV offering is at 5 to 8 years behind Tesla and and they are moving slower in R&D.
- f6v 5y ago
  > the software capabilities Am I wrong or the cars were running software for at least a decade? What kind of software can’t VW develop?
  - dkirill 5y ago
    Traditional manufactures software sucks in every way possible

AYBABTME 5y ago

I think the cat is out of the bag for EVs: enough people have tasted them and wouldn't go back, and enough manufacturers got into the game, that even if Tesla was to fail, enough people would be asking for it, and enough manufacturers would already be advanced enough in their plans to keep the ball rolling. Basically, Tesla's mission is 99% accomplished.

sharken 5y ago
In Europe there is still too few charging facilities. Basically an EV only makes sense if you own a house and can get your own charger. The V2 supercharger still needs around 20 minutes for an 80% charge, while the new BMW iX3 needs around 30 minutes for 80%. The Tesla V3 supercharger is promising, but the killer feature will be a unified charging platform and not one for each car maker.
- iso1631 5y ago
  > Basically an EV only makes sense if you own a house and can get your own charger. New houses in the UK have required chargers as part of planning permission for 5 years. Most people have, or can have, a 3KW socket installed in their driveway, very cheaply (like 2-3 tanks of fuel) 73% of cars in the UK are parked on private property overnight. Most cars do under 8,000 miles a year, or 160 miles a week, 77% of cars passing an MOT in 2019 did under 10,000 miles/year, or 200 miles a week. At 5 miles per KWh, that's 15mph of charging, or 200 miles in one overnight charge.
  - Angostura 5y ago
    There are large city areas with no off-street parking. I'm currently sitting in a terraced house in East London.
    - iso1631 5y ago
      37% of cars in urban areas are parked on the street. There's a whole separate question about why so many people in urban areas have cars of course. The direction of travel is that it will be uneconomical to keep a petrol car in London in 10 years time, even if they were still available for sale, so it's fairly meaningless. People will have to adapt.

bpodgursky 5y ago

Tesla doesn't _need_ to raise more money now though. They may do so to accelerate factory buildouts etc, but it's cash-positive. So a stock crash would be inconvenient, but unless it leads to a shareholder revolt or something, wouldn't really matter.

brtkdotse 5y ago

> A market crash could take down Tesla and set back electric car adoption by 20 years. Why? Even if TSLA dropped to 1 cent today, all factories, employees, supply chain, IP, sales channels etc would remain intact.

aero-glide2 5y ago

Lets start with two assumptions. In 10 years, majority of cars sold will be electric. Majority of cars sold will have self driving capability. Tesla is a leader in both. Much of the traditional knowledge companies have about ICE engines do not help them build a better electric car. That knowledge is worthless for the future. Stock price represents future value.

BluntleyHonest 5y ago
God I wish stupid people like you didn't exist.
- meowface 5y ago
  I don't mind harsh or critical comments, but you're going to have to at least add some substance if you want any effect.
kaba0 5y ago
In electric cars, the battery is the only “hard” part, and that is (or maybe just was) “third-party” even for Tesla. And level 2 is not self-driving and is just dangerous. And I don’t see how would we get to level 3, let alone higher levels. And stock price represents.. basically hype, which is remotely may be based on some figures.
- deleted 5y ago
  [deleted]
oblio 5y ago
> Much of the traditional knowledge companies have about ICE engines do not help them build a better electric car. True, but look around at the electric platforms being developed by traditional car companies. Mercedes has one, BMW has one, VW has one, Nissan has one, etc. Most of them will be transitioning. The stock price represents future value where that value is Tesla absolutely crushing everyone else, which we can now say with ~80% confidence won't happen. Irrational exuberance.
5y ago

jillesvangurp 5y ago

Tesla is not just a car company. They are diversifying their income. Trucks, vans, are things they are planning to do but are holding back on because of a lack of battery to build those and because of continued spectacular demand for very lucrative high end cars. And that's just vehicles. Their solar business is scaling nicely. Grid storage is a growth market as well. And of course they are pairing their solar with domestic storage as well. All rapid growth markets. That's why their market cap is what it is. Multiple rapid growth markets, a proven ability to scale and execute, etc. That's why investors love them. A market crash would be brutal for everyone. Particularly those with struggling product lines and outdated products that are very dependent on both to secure the revenue to invest themselves out of that mess.

TheTrotters 5y ago
Yeah, perhaps it's easier to understand Tesla's valuation if we look at is as a solar energy company, not just a car company.
- dannyw 5y ago
  No, that gets even harder to understand, as Tesla sucks at solar.
mupuff1234 5y ago
Most car manufacturers sell trucks, vans, etc as well.

hurril 5y ago

No, a market crash would not touch Tesla as the stock and the company are two different things. The fact that a lot of people want to pay top dollar to own a share of the pie is not the Tesla operations churning out cars (or not.)

jpgvm 5y ago
This is correct. To add TSLA took advantage of it's massive stock price rise to pad it's coffers with a number of stock offerings. They now have a warchest of billions of cash and cash equivalents (like BTC) that they can use to expand without going back to the public market for cash for a while. Especially with their cash flows looking a lot better now.
- hurril 5y ago
  Yes. A lot of the stock rockets do this now, so sure - that connects the stock to the company.

alexc05 5y ago

If you're still seeing tesla as a car company you're missing their home-energy business and their utility business. Look at the australian mega-battery project. They've reduced power outages and normalized the grid. As household solar+battery installs grow, they're going to eat into the massive utility business. They're much bigger than cars because they are not just cars.

tenpies 5y ago
> If you're still seeing tesla as a car company you're missing their home-energy business and their utility business. Tesla Energy lost a little over $100 MM this quarter. Last quarter they lost less money. Solar installs have never recovered from the 2016 peak - they're barely at 50% what they were then. The economy of scale is working in the wrong way and Tesla is competing in a commodity space against companies who are vertically integrated and specialize in the type of batteries and solar panels in use - in fact Tesla often buys batteries from them. This is like if Apple were selling iron ore. The fan boy consumer may pay a 100% premium, but 99.9% of the world will just buy the cheapest iron ore around.

jxidjhdhdhdhfhf 5y ago

Tesla is not terribly dependent on its share price. They have 17 Billion in cash on hand so they can fund their operations for quite a few years to come, even in a market downturn (we had a market downturn last year by the way in which they continued to grow). A large drop in shareholders certainly would disappoint shareholders but they are the ones valuing Tesla so high. Musk is on the record saying the share price is too high and it's factoring in a ton of potential future growth.

carlivar 5y ago

A few years ago I'd agree it would be a major EV setback but there are so many other options now I don't think that's the case any longer. I'm very optimistic about Rivian. It's Tesla but without the ego thinking they are smarter than 50 years of manufacturing lessons.

paranoidrobot 5y ago
I think that if Tesla were to go belly-up because of some sharemarket issue, that it'd be very easy for all the other manufacturers to back off their BEV plans. Not necessarily outright cancel them, but just not push for it and possibly let it fizzle somewhat. They'd have the excuse that "Well, Tesla failed, and they were more valuable than all of us combined at one point, so... we'll just be more cautious" One major issue is adoption. While there's a whole lot of people who want BEVs, price is still a major concern, as is infrastructure. Tesla make it dead simple with their supercharger network - find a charger, plug in, fast charging happens. The find a charger thing is integrated into the car, and often has feedback about what chargers are busy or unavailable. Unfortunately, outside of Europe and the UK, the BEV charging story is pretty terrible. Volkswagon, who arguably have the biggest incentive to make this work, have a pretty atrocious charging experience in the US, as demonstrated by Engineering Explained[1] with their latest and greatest model the 'ID.4' Europe and the UK have put down standards and basically forced some level of interoperation between charging network systems, which reduced friction for EV owners. The other issue is getting dealers onboard. If you're someone for whom an EV might make a whole lot of sense, there's approximately zero chance you're going to get recommended an EV, even if the dealer has one to sell you (either because the dealership dont' keep units to test-drive, or the manufacturer doesn't sell a BEV). Dealers hate them, because there's little to no after-sales servicing requirement. I've seen many stories about people basically having to argue or beg a dealer to let them buy or even order an EV. Perhaps Manufacturers could go with direct sales a-la Tesla, but there seems to still be a lot of political power left in the dealer networks, so that isn't necessarily going to be possible any time soon. What will convince me that EVs are here to stay is when dealerships are pushing BEVs right alongside their ICEs. [1] https://www.youtube.com/watch?v=EotuxCptcM4 https://www.youtube.com/watch?v=EotuxCptcM4

dillon 5y ago

I kindly disagree with your critique. BUT I am also very biased. This is because I am an owner of a Model Y, but I do not own any stock in Tesla whatsoever. I do not like nor trust Elon Musk, especially with my retirement. I think people want EV's and when they see that they only need to spend a little bit extra for that extra range and access to a nationwide supercharger network. They are willing to pay for it. I don't think a drop in stock is going to change that mentality. Other automakers keep trying to build a quality EV, but they simply do not hold up to a Tesla.

BluntleyHonest 5y ago
Tesla are shit cars, just like most of their owners are shit people.