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True, but it still seems unlikely that the unconstrained choice would be 100% Tesla. Do we really think Toyota will be incapable of retaining any significant %
by rossdavidh 5y ago
True, but it still seems unlikely that the unconstrained choice would be 100% Tesla. Do we really think Toyota will be incapable of retaining any significant % of EV sales once that's where the industry mostly is at?
- random314 5y agoVW, Renault- maybe. Toyota has a lot of work to do if it has to avoid getting wiped out by the EV revolution.
- ajross 5y agoThe 100% isn't really the right analysis. Market caps for auto manufacturers tend to be quite low because it's a low-growth industry, and the biggest players are non-US securities where low market caps are more routine. Total world automotive revenue is something like $1.5T (I forget the source, that's from my head). At the same price/revenue ratio as AAPL (a similarly dominant player in a rather different industry), TSLA would only have to make up 8% of the world revenue to justify it's current share price. Is that comparing Apples (heh) to oranges? Yeah, it is. But the point is there's no magic principle that says "auto companies get impoverished share prices relative to tech companies" either. Broadly: the market is betting Tesla gets valued like a tech stock and not a heavy industry stock. And the valuation is pretty much where you'd expect if that were the case.
- deleted 5y ago[deleted]