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It seems like a smart decision once you look at car companies' market caps: Tesla: $651 B Toyota: $288 B Volkswagen: $152 B Daimler / Mercedes: $99 B Ford:
by FartyMcFarter 5y ago
It seems like a smart decision once you look at car companies' market caps:
Tesla: $651 B
Toyota: $288 B
Volkswagen: $152 B
Daimler / Mercedes: $99 B
Ford: $60 B
- paulpauper 5y agoPeople said this 3 years ago too, arguing Tesla was too big. guess what: it got way bigger. Tesla is forcing other brands to have to adapt or die. They are way behind Tesla in technology, infrastructure, and marketshare for electric vehicle and battery tech.
- bredren 5y agoDon’t forget customer satisfaction.
- Aperocky 5y agoMaybe market share, but I can't see how the argument goes for technology or infrastructure. As of now, none of the auto-driving tech is acceptable to go hands free, people have tried it and paid with their lives. The only difference between Tesla and traditional companies is that Tesla didn't seem to mind people testing unproven techs with their lives while the other manufacturers are more restrictive.
- toomuchtodo 5y agoTake a long distance road trip with an EV without Supercharger access. Report back.
- agloeregrets 5y agoSuperchargers are better on average. But the US Electric Canonball run record is NOT held by a Tesla. It's getting there.
- adolph 5y agoKyle Connor, from the Out of Spec Motoring YouTube Channel, took a Porsche Taycan across the country on December 31 and set a new electric Cannonball record with a time of 44:26. This beats the previous record set by Connor and his team in a Tesla Model 3 by almost an hour. https://cleantechnica.com/2021/01/12/porsche-taycan-beats-teslas-ev-cannonball-record/ https://cleantechnica.com/2021/01/12/porsche-taycan-beats-te...
- gambiting 5y agoI mean, just 3-4 years back I'd agree with you. Nowadays at least here in UK you're getting 100-150kW chargers being built literally everywhere. I'd have no problem owning and driving cross-country in a non-Tesla EV nowadays. That equation will only be getting worse and worse for Tesla - they are adding more Superchargers but nowhere near the rate of non-Superchargers. Yes, Superchargers are better technically(especially if you have the latest Model 3 and can tap into the 250kW charge), but it's no longer the argument to buy a Tesla - charging a normal EV is less and less of a problem, even on long journeys, even without having access to the Supercharger network.
- deleted 5y ago[deleted]
- moistbar 5y agoTheir charging infrastructure is by far the best out there, even if it is a proprietary standard.
- CreepGin 5y agoYour comment reminds of me of this. If in the future medicines/technologies are invented to get rid of people's impulses to hurt one another (as in Stanislaw Lem's Return from the Stars), but in doing so, people also lost the impulse to take risks, would you be for or against such technology? Neither side is wrong. Anyhow, I think it's a well-known fact that Tesla's rise is due to their innovation in both hardware and software (Technology). Their Supercharger network (Infrastructure) surely is also ahead of their competitors by a wide margin.
- deleted 5y ago[deleted]
- bserge 5y agoTaking risks on impulse is just gambling. Taking risks after considering all of the known factors and estimating the unknown is logic.
- FartyMcFarter 5y ago> it got way bigger. It's still unclear whether this is due to fundamentals like the ones you mention, or just an irrational stock market. Now that more and more companies are coming out with their EVs, the truth might become clearer.
- deelowe 5y agoIt's pretty clear to me...
- JPKab 5y agoAs a recent owner of a model 3, I've been blown away by the charging infrastructure advantage. The non-Tesla chargers near me in Colorado are just plain garbage. Sometimes, they work great, but other days I go back and the terminal won't function. And currently, these chargers are all the owners of non-Tesla EVs have. I'm actually surprised there isn't a legal push by Congress to force Tesla to open up their charging infrastructure to others.
- shiftpgdn 5y agoI own both a Audi e-Tron and Tesla Model Y (well, it’s the wife’s but you get the idea.) Taking a road trip in the Audi is all but out of the question because of how awful the charging infrastructure is. That is not say nothing in regards to the litany of design flaws, poor consumption, and miserable dealer support with the Audi. Tesla is easily 10-15 years ahead of all other manufacturers.
- ForHackernews 5y agoToyota have been mass producing hybrid electric cars since 1997, and they practically invented the modern vehicle assembly line. It's hard for me to accept as credible the assertion that they would be "way" behind Tesla in anything.
- deleted 5y ago[deleted]
- kozak 5y agoToyota's reluctance to accept that battery EVs are the next big thing is so strong that it can negate all these advantages.
- deelowe 5y ago"The market can remain irrational longer than you can remain solvent." And it will continue to go up until it doesn't. Maybe Tesla has a vault of unicorn blood and is just waiting for the perfect time to unveil it, but as a car company, their stock valuation makes absolutely no sense. It would take a miracle for Tesla to overtake more than all 3 top automakers combined. There is zero indication this has any possibility of becoming a reality. Tesla's stock performance is in pure FOMO land now.
- synaesthesisx 5y ago> until it doesn't. That's not necessarily the case. Financials are irrelevant for stocks like Tesla, and it can continue to moon indefinitely if the market dictates it.
- Wowfunhappy 5y agoSo I guess “stocks like Tesla” are really just tulip petals? What are people paying for?
- systemvoltage 5y agoIt's a great question. Future potential, leadership, tech stack, manufacturing capacity, etc. There is a lot of "soft" aspects of running a company and valuation is one of the most difficult/error-prone things to do. Damodaran's Google talk kind of does a good job describing valuation of high-growth companies (it is deceivingly simple): https://www.youtube.com/watch?v=Z5chrxMuBoo https://www.youtube.com/watch?v=Z5chrxMuBoo
- ac29 5y ago> it can continue to moon indefinitely if the market dictates it Not really. The higher the price gets, the more new money it takes to move the price higher. TSLA has done significantly worse than the overall US stock market this year.
- JPKab 5y agoI don't disagree with you, but the common retort I hear to this sentiment is that "they aren't a car company, they are a battery/energy storage company that currently sells cars". What are your thoughts on that sentiment? Just curious to hear from rational investors on that specific item.
- 988747 5y agoTesla MARKET VALUATION has grown like crazy, but their sales and profits are lagging behind. And you're wrong: Tesla might have an advantage in infrastructure (Supercharges) but their technology is not far ahead of others, and their market share is falling down (at least in Europe). Also: Tesla is planning to open up their chargers network to other cars [1]. So either they have a plan to ditch car manufacturing and focus on chargers network (and battery production), or they are digging their own grave. [1] https://electrek.co/2021/06/24/tesla-confirms-plan-open-supercharger-network-other-automakers-next-year/ https://electrek.co/2021/06/24/tesla-confirms-plan-open-supe...
- JPKab 5y agoThat article you linked to isn't saying what you think it is. I specifically would like to see the superchargers opened up to all vehicles as well, but the details of the article state that they are only doing this in very select locations/markets, and primarily focused on those which were built with government subsidies. We are not likely to see the vast majority of the Tesla charger locations opened up to other brands for a while, and that may come via regulation.
- 988747 5y ago1. This is happening in Europe is, which is the place where they are already losing market share 2. If they agree to open their network in some markets, the rest of the world will soon demand the same.
- croes 5y agoThe share is overvalued. Tesla is the leader in CPU, but only average in the rest of the manufacturing. And the main selling point for the CPU, autonomous driving, has been announced for years. In the meantime, there is only talk of the full potential for autonomous driving. In my opinion, it will still not be ready in 5 years.
- croes 5y agoWithout climate crisis and emission scandal emobility still wouldn't be an issue.
- halotrope 5y agoJust look at Norway and the Netherlands which seem to have a 2-3 year lead on EV adoption. Volkswagen brands have already surpassed Tesla sales there. Tesla makes a terrific product and they single handedly provoked that change we are seeing now. However, the German and Korean brands make great cars too. Given the choice I would trade good build quality, some more physical buttons and a quiet cabin at highway speeds for Teslas ride and futuristic infotainment on most days.
- JPKab 5y agoThey are catching up, but currently the VW and other EVs, with the exception of Porsche, are pretty inferior. (A notable exception is Hyundai's Ioniq5, which is very impressive). My biggest concern with other auto manufacturers EV projects is how absolutely abysmal these companies are at building software. It's just not even close. And software makes a HUGE difference with EVs. My wife's Audi has absolute shit software. It's not that it's some tall order to write good software, it's just that these massive corporations have no idea how to build good software teams, period.
- wpietri 5y agoI'll note that "inferior" to somebody on HN may not be very much like "inferior" in the judgment of a mainstream consumer. I agree with you that traditional car company software is terrible. But if there's one lesson I've had to learn over and over, it's that terrible software is not much of a barrier to market success.
- tablespoon 5y ago> My biggest concern with other auto manufacturers EV projects is how absolutely abysmal these companies are at building software. It's just not even close. And software makes a HUGE difference with EVs. My wife's Audi has absolute shit software. A few years ago I read some forum posts from someone who claimed to be an ex-Tesla engineer that basically said Tesla was pretty bad at building software too. They're probably just better at making the UI seem shiny.
- TX0098812 5y ago
- aNoob7000 5y agoTesla has a lead now, but can it keep it?
- hef19898 5y agoOther car manufacturers are already catching up, so I guess we will see!
- notsureaboutpg 5y agoIt just isn't true that other brands are lagging way behind Tesla in tech / infra / market share for electric vehicles. The difference in the past 3-4 years has been huge and traditional car companies have really closed the gap. We're no longer in the days of only the Leaf and the Bolt being electric cars with reasonable range. Most electric cars these days have enough range to be a daily driver. Most cars these days have driver assist and rear cameras, etc. Tesla's "fully autonomous" car is not here (despite being "2 years away" 6 years ago). Teslas have shockingly lower reliability than people expected when they first started being sold, and traditional cars have a leg up on them in this regard. I'm not a Tesla downer, honestly I think they've done so much good for the world and the risks taken to make that company a success has accelerated progress in so many ways. All of that can be true, and it can also be true that other brands are catching up and already have attractive alternatives to Teslas out in the market now.
- kuerbel 5y agoBMWs next electric cars will have batteries with zero (!) rare minerals, they are on the way to produce cars with renewable energy and they can recycle 96% of their batteries, just not the thermoplastic. There is much more they are doing. Where they forced to adapt? Yes, they weren't at the forefront. But they are taking huge leaps forward. All that while providing, well, the quality of a german car. I drove a model 3 and a BMW and there is a massive difference in quality. If there is a German car maker lagging behind I think it would be Daimler/Mercedes Benz. VW is somewhere in the middle I guess.
- wpietri 5y agoI think this point is key. Musk was fast out of the gate and did well out of it. Existing car companies are slower to adopt innovation, but they've been doing it for 100 years at this point. Musk is a darling of the early-adopter market, but that's a small percentage of the total market. The more established car companies have huge advantages there, and Tesla's going to have to work very hard to overcome them.
- kevin_thibedeau 5y ago> while providing, well, the quality of a german car So half the electronics will be broken in five years.
- wcarron 5y agoI would say VW AG is leading the charge among the germans, especially considering the volume of cars the group sells as a whole. The ID.4, the Buzz, the Audi E-tron lineup and the Porsche Taycan, just to start. VW group also has a long history of racing hybrid vehicles, and I'm looking forward to seeing more and more racing classes move to hybrids. But i digress. Agreed that MB is the laggard and that Tesla quality is poor.
- wpietri 5y agoThat doesn't prove much; it's been 3 years of a very bubbly market. The NASDAQ has gone up 2x over that period. As Warren Buffett said, "Only when the tide goes out do you discover who's been swimming naked." I remember a lot of people in 1999 and 2000 pooh-poohing talk of a bubble with the exact same arguments. The technology is amazing! People predicted it was a bubble before and it's only gone up! There's no denying Musk is a true master of hype. That has given him a ton of free advertising and a very low cost of capital. And he's gotten away with fantasies and lies for years, like promising 1 million robo-taxis on the road by the end of 2020. [1] But all bubbles pop eventually, and truth always wins over hype in the long run. It's only then we'll see whether Tesla's become truly a sustainable business, or whether Musk is still swimming naked. [1] https://www.businessinsider.com/tesla-robo-taxis-elon-musk-pt-barnum-circus-2019-4 https://www.businessinsider.com/tesla-robo-taxis-elon-musk-p...
- Black101 5y ago> They are way behind Tesla in technology Electric cars are simpler then ICE cars... and Ford has the Mach-E SUV, VW has the ID.4, etc...
- api 5y agoCan Tesla align body panels yet? I want Tesla to succeed but I know of several horror stories with quality and getting any kind of support or repairs post-purchase. They have some work to do.
- karmakaze 5y agoThat makes sense in the restricted context of what traditional makers did. Tesla has a way of broadening their markets. e.g. batteries. electric power storage, electric chargers. This can continue so possibly cut into petrol or logistics companies. Hard to quantify a limit.
- systemvoltage 5y agoThere are a few more in the pipes: - Rivian (Private) - Lucid (Private) - Arrival (ARVL): $10B - Nikola (NKLA): $7B - Canoo (GOEV): $2B - Lordstown Motors (RIDE): $2B Although: > EV Startups Are in Trouble. Investors Don’t Care. https://www.wsj.com/articles/ev-startups-are-in-trouble-investors-dont-care-11624075431 https://www.wsj.com/articles/ev-startups-are-in-trouble-inve...
- belter 5y agoLets add PE Ratios as of last Friday 24 June .... Tesla: 674.98 ( !!!) Volkswagen: 12.70 Daimler/Mercedes: 10.43 Ford: 15.52
- nickik 5y agoPE Ratio is one of the dumbest most irrelevant ways to measure company. At one point Tesla had no PE, then it was 10k and one quarter later it was 1k. Evaluating growth companies with PE is idiotic.
- belter 5y agoI did not claim this will be the single data point.Of course is not to be used without additional information. Warren Buffet also stated you should not rely solely on PE. It is a starting point, and the difference is enough, to justify a statement that Tesla is overvalued. Are you saying Tesla is not overvalued ?
- andrewtbham 5y agocomps are very simplistic way to value companies. in this case, your comparing apples to oranges. for starters, tesla is highly vertically integrated. so it doesn't really make sense. you would need to comp tesla to the auto supply chain. they make their own seats, speakers, driving assist programs, glass, they stamp their own metal, paint their own cars. They have their own chargers, service centers and do all their sales directly without a dealership network. All the companies you have listed outsource these tasks. Furthermore, they have an energy business, auto insurance, etc. dcf models are the best way to think about valuing a company.
- njharman 5y agoTSLA is a battery company. Autos are just the means to and end. Their market cap represents how well they are positioned to capitalize on the end of Fossil Fuel Age.
- adolph 5y agoOr is Tesla an integrated HW/SW company where batteries are just part of the physical implementation of transportation that be improved? https://www.youtube.com/watch?v=YZTlaiu_vWE&t=100s https://www.youtube.com/watch?v=YZTlaiu_vWE&t=100s
- hef19898 5y agoIsn't Panasonic the battery company?
- rcMgD2BwE72F 5y agoAs much as CATL. Or Tesla, soon.
- airstrike 5y agoMarket cap isn't really a meaningful metric to compare across companies for most use cases. It certainly isn't a valuation metric.
- dehrmann 5y agoI get what you're saying, and there's truth to it, but Tesla is also valued higher than all the major car companies. For that to make sense, it either needs to have a business well beyond cars (maybe batteries, maybe not; maybe solar) or a path to significantly better margins that competitors (unlikely). The valuation right now is entirely a bet on Elon and being part of the story.
- matthewowen 5y agoI won't dispute that Tesla's valuation is eye watering, but it isn't very meaningful to compare market caps. A generally superior comparison is between enterprise values. This is especially true for car companies which (with the exception of Tesla) are heavily debt financed. By that metric, Tesla actually drops below 600Bn. Toyota moves to about 400bn. Ford goes to 170bn. VW is 350bn.
- spaceflunky 5y agoThe other companies are valued so low because their ability to innovate is so low. Tesla is a vertically integrated company, while the others are horizontally integrated. The combined proprietary technology of Tesla is greater than the combined proprietary technology of all the big auto manufacturers. A lot of those companies just buy technology from some other vendor, so while it looks like they are competing with Tesla, they aren't really. The incumbents just know how to build a car, Tesla not only learned how to build a car, they built self-driving technology to compete with Google (Waymo), the built their own chips to compete with Nvidia, they built their own batteries to compete with Panasonic, and they built their own manufacturing technologies to compete with hundreds of long term industrial companies. Not a single one of those companies could design a GPU to save their life. Let alone in the time and quality that Tesla built it. You can't just look at the surface and go "Toyota and Tesla sell cars, therefore I can compare companies apples to apples"
- taylodl 5y agoOn the flip side it sounds like Tesla may be suffering from a Not Invented Here syndrome which would seriously hamper their ability to innovate quickly and inexpensively in the future.