24 ms·

Tesla’s stock price is confusing if you compare them to a car company. But they are not just a car company. They are also a car manufacturing supply chain, havi

Tesla’s stock price is confusing if you compare them to a car company. But they are not just a car company. They are also a car manufacturing supply chain, having brought much of their component production in house. They are also an energy company, both generation and storage, but also distribution, like gas stations. Think Exxon, BP, Chevron, ARCO, etc. They are probably a few other things, but this is the mystery of their valuation.

rich_sasha 5y ago
That’s true. But also, presumably, these companies outsourced their supply chains etc because it was (or seemed) profitable. There is still a disconnect for me. First everyone outsources, apparently successfully for automotive, and that’s great, all these joint ventures between car makers etc. Then Tesl comes along, integrates everything, and poof that’s also good..?
- jjeaff 5y ago
  I'm guessing the automotive industry benefited more from outsourcing because they were heavily unionized. Outsourcing parts allowed them to get the parts from sub-contractors that didn't have to pay union wages. Tesla started much later and didn't have this problem.
  - rich_sasha 5y ago
    So is Tesla another labour rights arbitrage at heart? That would make me sad. It feels to me that even taking the company at face value, this valuation is just silly. And I thought that for years, so clearly as a short-seller I’d be toast. But the more the price levitates, the more unreal it feels.
    - panick21_ 5y ago
      No it isn't. The difference between union and non union is far smaller then people have in the idealistic fantasies. Tesla employees are payed just as well, and with stock options they actually historically have been paid WAY, WAY better. The thing about Tesla is that its forward looking for a long time since they have a stable leadership with a clear long term plan. This leadership has been leading the company for more then a decade and all their plans have worked out. Tesla now certainty is worth now what they were valued at a few years ago. For myself, I would already consider electric flight as part of their future revenue. Its a logical next step but it will take 10 years. Of course I can understand that other people think this is crazy. But flat out, for me, I see them growing 50% a year for many more years with no end in sight.
      - penjelly 5y ago
        youre right that at least one person thinks thats crazy. Strange how we all see what we want to see in the end. Myself included.
        panick21_ 5y ago
        My thing is that I invested where the stock was way lower, so even if it goes down a large amount I am in the black. I simply believe in leadership, no company with Elon as a CEO has really failed to grow. The closest is maybe Solarcity but he was not CEO. Tesla threw Elon has strong connection with SpaceX. They already share material science. SpaceX uses Tesla battery technology. The connection is strong. Electric flight (not flying taxis) is a clear next step for both companies and Elon has been wanting to do it for a decade. It will take another 3-5 years before this is a serious project, but I don't think any other company is really up to it. Boeing and Airbus are not gone do it. Until then I see continue 50% growth for a long while based on EV and Storage. If Self-Driving works out, its massive. I am not counting on that. Even just as a advanced level 2 system its a great asset. But if it works out, the potential value is huge.
      - sofixa 5y ago
        > For myself, I would already consider electric flight as part of their future revenue. Its a logical next step but it will take 10 years. Of course I can understand that other people think this is crazy That's extremely unrealistic. The aeroplane industry is extremely complex, and there are heavy regulations where (hopefully) Tesla's "move fast and break things" + use commercial grade stuff and refuse warranty ( was it the chips in their screens or the screens themselves in some models that were not made for constant use in a car) approach won't fly. 10 years is a decent development time for a plane, if you skip the parts that Tesla have no experience with it and there'd be plenty of R&D to make them work. For reference, Bombardier, a company with decades of aeronautics experience and an established supply chain, started work on the C-Series in 2004. First flight was in 2014, first commercial service in 2016, and it nearly banrkupted them. Unless Tesla are already currently working on an electric airplane, i call bullshit on them having one in 10 years. Considering they already have the truck and semi which are oversold and underdelivered/delayed, do you think they have the capacity to tackle such a huge undertaking any time soon? As to your other comment that Airbus won't do it - they've been on it since 2010: https://www.airbus.com/innovation/zero-emission/electric-flight.html https://www.airbus.com/innovation/zero-emission/electric-fli... If one of the biggest companies in aviation has been working on it for a decade and doesn't have anything commercially viable yet to show for it, and estimate it will take them another decade for this, what makes you think a company with no aeronautics experience and history of overpromising and underdelivering can do it all in a decade?
patd 5y ago
On the automotive side, they are also a worldwide dealership network, a nascent insurance company.
- jonathankoren 5y ago
  Name a mass market international car manufacturer that doesn't have a worldwide dealership network and an absolutely massive financial arm?
  - patrickk 5y ago
    Most other OEMs don’t own much dealers. Tesla is more like Apple by owning their own retailers and controlling the whole value chain.
    - deleted 5y ago
      [deleted]
  - acchow 5y ago
    AFAIK, the major car manufacturers' dealership networks are franchises. Yes, they have massive financial arms but they are for financing the vehicles, not for insurance.
    - jonathankoren 5y ago
      Car manufacturers aren't by an large allowed to own dealerships in the United States. The point is, the number of dealerships is a good proxy for demand and sales. Also, dealerships by and large don't make much money on the sale of cars (due to having to purchase the cars from the manufacturer), but rather they make their money on the service and repair of cars. Even then, they're not really rolling in the dough. General Motors's old financial arm was GMAC, now Ally Bank. Under General Motors's ownership, they offered credit cards[+], mortgages, and were in the insurance market since 1939. This is not an innovation. [+] This was the only credit card my parents had for over a decade.
rtpg 5y ago
Maybe what you're saying is true regarding the company itself, but it's a meme stock. You go down and talk to people, people will say that yet wouldn't actually invest in the basket of companies of those industries. It's not a problem for Tesla or Elon per-se, but we shouldn't assign intelligence to people basically voting for their favs with their wallets.
- TeMPOraL 5y ago
  Shouldn't also blame these people, because the stock market is as much prescriptive as it's predictive: if enough people "vote for their favs with their wallets", those favs may actually start (or keep) doing OK because of that, if they're not completely incompetent. (Myself, if I had some funds that are not already earmarked for something more important, I'd dump some into TSLA just as an expression of support to Musk and electrification of transport. I'm sure many people did just that, with no expectations of return.)
  - guiriduro 5y ago
    Isn't Tesla one of the least capital efficient ways to invest in transport electrification? How much of that will end up in genuine R&D and furtherance of your aims, as against paying for transient meme interest and massive risk loading?
    - panick21_ 5y ago
      Tesla spends like 5x as much per car on R&D. They literally developed a completely new battery manufacturing factory and cathode plant from the ground up. Plus of course their own batteries with their own chemistries. No other car company comes even close to that. They are vertically integrating to the point where they themselves are building their own battery manufacturing equipment. They are even slowly getting into mining themselves. And of course solar, stationary storage and so on. Hard to see what company is doing considerable more. Tesla is doing a pretty large amount of innovation.
      - 5y ago
dado3212 5y ago
For the record, their market cap is also greater than "Australia's Woodside Petroleum, Chevron, Exxon Mobil, Imperial Oil, Royal Dutch Shell, Shell Energy North America, Canadian Natural Resources, ConocoPhillips and French group Total [combined]" [1], so they're also valued kind of crazy compared to energy companies...and that was in January 2021 before the most recent spike. Sure, part of that is faith in renewables. But in any fair comparison their stock price is still a little confusing. [1] https://www.tesmanian.com/blogs/tesmanian-blog/teslas-market-cap-exceeds-the-total-value-of-a-number-of-oil-and-gas-companies-that-s-p-may-downgrade https://www.tesmanian.com/blogs/tesmanian-blog/teslas-market...
- TearsInTheRain 5y ago
  They are also an innovation engine. You have to value all of the things they havent created yet but will.
  - cinntaile 5y ago
    What part of their market cap is unrealized tech dreams and what part is substance, in the traditional value investor sense, in your opinion?
    - trhway 5y ago
      Tesla price to revenue is 20x - a pretty normal for a tech company.
      - listenallyall 5y ago
        Tech companies generally sell software or ad space with near-zero marginal costs. Tesla does not.
        trhway 5y ago
        Not really. The modern tech companies, FAANG, and many doing SaaS, etc. consume highly expensive labor and consume it while not linear, yet still in some significant correlation to the revenue, thus one can see that they have kind of significant marginal costs. While Tesla's marginal costs will more and more will be dominated by the R&D.
jonathankoren 5y ago
Every car manufacturer is a supply chain and and owns their own component production. Ford owns Motorcraft. General Motors owns AC Delco. Tesla doesn't have nearly the size of the distribution network of any of the oil companies. The fact is Tesla was trading at 1000x historic earnings, and 161x future earnings, or to put it another way, 10x any other car manufacturer, and this this was before this deal. [0] This simply doesn't make any sense. [0] https://www.tradestation.com/insights/2021/04/08/tesla-overvalued-comparison-gm-ford/ https://www.tradestation.com/insights/2021/04/08/tesla-overv...
- Seanambers 5y ago
  As long as Tesla can grow at or around 50% a year all those numbers you are using are useless. They will be halved every year from the current level. Yeah right now its seems crazy, and it is a unbelievably high valuation. But its more a sign of things to come. The other OEMs are laden with debt, which Tesla doesn't have so any comparison there would be at the EV level which doesn't make Tesla look that out of line considering it is about to overtake in 3-4 years most of the companies it is compared with. Also that debt the other OEMs have, was used to build ICE factories and technologies which are quickly becoming outdated. If and its a rather big IF I'll grant you that Tesla manages to achieve what they aim for which is 20 million cars in 2030, thats effectively 1/5 market share globally. Add into that the energy storage, charging network, solar roof tiles, AI and FSD. However any signs of growth weakness or interest rate changes will wreak havoc for sure. Even if Tesla falters, the other LICE OEMs are destined to fail, maybe 1-2 survives (GM/VW), the cat is out of the bag and what looked like a totally entrenched industry has been blown wide open by Tesla, and loads of other startups are following through.
  - jonathankoren 5y ago
    Tesla needs to execute, and I’m not sure that’s their strong suit. Sure they identified that it was finally time for the electric car, and made an electric car that wasn’t ugly as sin (gdiaf CitiCar and EV-1), but theiyre plagued with manufacturing delays and poor workmanship. The other manufacturers simply are better at putting quality cars out the door. Sure they were late to the game, and but it’s not a foregone conclusion that Tesla (or any startup) is going to dominate this market. As for AI and FSD, I’ll put my flag in the sand. We will not have production fully autonomous self driving cars (ie cars without controls) on uncontrolled surface streets in 20 years. From what I understand, the technology has hit a plateau, and there’s just way too many edge cases. If this wasn’t the case, you wouldn’t have people like Andrew Ng going around telling people to redesign cities to make it easier for robot drivers. If it does happen, it’s not going to be Tesla. I don’t think they’re the technology leader here. Last time I read something, Cruise and Waymo were leading, and Elon’s insistence on not having lidars was holding Tesla back.
ikerdanzel 5y ago
Tesla is as much speculative as wework. Tesla revenue absolutely can't justify the current stock price. It may turn out it can decades later but definitely not now. Would you pay current Apple price back in the 90s? Apple did turnout able to justify current pricing but no sane investors will agree to pay that price. If today Tesla disappear from earth, nothing much happens. If those oil companies you mentioned disappear, shipping and airlines will stop. Dupont too will stop. Tesla technology can be easily copied by others as you can see many car manufacturers are catching up fast. Batteries and solar are all available widely. A barrel of oil under Exxon will not be able to be cloned by BP. BP has to have their own oil rig to produce that.
freemint 5y ago
If your business model is an affine combination of other business models your valuation should also be an affine combination of the valuation functions of these business models. This is not the case for Tesla.
albatrosstrophy 5y ago
Exactly what so many people are missing. Unlike other car companies, Tesla run almost the whole value chain themselves, from software to hardware. In a way, they're an amalgamation of Blackberry and GM and Exxon and whatever in between. And they're also going into AI robots and home solar. While these may be hits or misses, they underline the immense market penetration of Tesla. They're not just cars, which is why many investors project a much higher valuation for them in the coming years.
oxfordmale 5y ago
Tesla is an amazing company, however, still hasn't reached the peak of inflated expectations. As a seasoned equity investor put it: "Tesla the stock isn't being valued by any metrics that make sense and today investors are paying too much for their future growth which is dangerous."
nebula8804 5y ago
Do we actually have a detailed document explaining how much of their component production is actually in house? It seems like there are A LOT of common components between Tesla and others while at the same time they are clearly doing a lot of in house things that others dropped decades ago. (eg. Seat Production, having metallurgy department to come up with better alloys etc.) These are things other OEMs tossed to the curb decades ago.
tw04 5y ago
> They are also a car manufacturing supply chain, having brought much of their component production in house. They are also an energy company, both generation and storage, but also distribution, like gas stations. So basically a car company. GM makes their cars in-house. They own their own parts supplier (acdelco) and charging/distribution network (Ultium Charge 360). Ford and Stellantis are working on the same.
- jiveturkey 5y ago
  Like other car companies, also their own finance arm.
nuerow 5y ago
> Tesla’s stock price is confusing if you compare them to a car company. But they are not just a car company. Tesla's stock price is confusing because it cannot be explained, let alone justified, by any market analysis, results, or market price calculation. It's purely willingness to pay driven by meme stock speculation. > They are also a car manufacturing supply chain, having brought much of their component production in house. This assertion makes absolutely no sense given that Tesla's market value is currently greater than Volkswagen's market value, and by no means is Tesla even comparable with Volkswagen in terms of any of the criteria you've brought up.
- seanmcdirmid 5y ago
  Stock prices are more about growth potential than existing size. Tesla is valued more than Volkswagen because it is expected to be bigger in the future (or VW is expected to be smaller in the future, or a mix of both). We’ve been through this before with tech stocks, and the enthusiasm for future growth has shown to be often correct, and also often incorrect. Playing the market is a bit crazy like that.

rich_sasha 5y ago

That’s true. But also, presumably, these companies outsourced their supply chains etc because it was (or seemed) profitable. There is still a disconnect for me. First everyone outsources, apparently successfully for automotive, and that’s great, all these joint ventures between car makers etc. Then Tesl comes along, integrates everything, and poof that’s also good..?

jjeaff 5y ago
I'm guessing the automotive industry benefited more from outsourcing because they were heavily unionized. Outsourcing parts allowed them to get the parts from sub-contractors that didn't have to pay union wages. Tesla started much later and didn't have this problem.
- rich_sasha 5y ago
  So is Tesla another labour rights arbitrage at heart? That would make me sad. It feels to me that even taking the company at face value, this valuation is just silly. And I thought that for years, so clearly as a short-seller I’d be toast. But the more the price levitates, the more unreal it feels.
  - panick21_ 5y ago
    No it isn't. The difference between union and non union is far smaller then people have in the idealistic fantasies. Tesla employees are payed just as well, and with stock options they actually historically have been paid WAY, WAY better. The thing about Tesla is that its forward looking for a long time since they have a stable leadership with a clear long term plan. This leadership has been leading the company for more then a decade and all their plans have worked out. Tesla now certainty is worth now what they were valued at a few years ago. For myself, I would already consider electric flight as part of their future revenue. Its a logical next step but it will take 10 years. Of course I can understand that other people think this is crazy. But flat out, for me, I see them growing 50% a year for many more years with no end in sight.
    - penjelly 5y ago
      youre right that at least one person thinks thats crazy. Strange how we all see what we want to see in the end. Myself included.
      - panick21_ 5y ago
        My thing is that I invested where the stock was way lower, so even if it goes down a large amount I am in the black. I simply believe in leadership, no company with Elon as a CEO has really failed to grow. The closest is maybe Solarcity but he was not CEO. Tesla threw Elon has strong connection with SpaceX. They already share material science. SpaceX uses Tesla battery technology. The connection is strong. Electric flight (not flying taxis) is a clear next step for both companies and Elon has been wanting to do it for a decade. It will take another 3-5 years before this is a serious project, but I don't think any other company is really up to it. Boeing and Airbus are not gone do it. Until then I see continue 50% growth for a long while based on EV and Storage. If Self-Driving works out, its massive. I am not counting on that. Even just as a advanced level 2 system its a great asset. But if it works out, the potential value is huge.
    - sofixa 5y ago
      > For myself, I would already consider electric flight as part of their future revenue. Its a logical next step but it will take 10 years. Of course I can understand that other people think this is crazy That's extremely unrealistic. The aeroplane industry is extremely complex, and there are heavy regulations where (hopefully) Tesla's "move fast and break things" + use commercial grade stuff and refuse warranty ( was it the chips in their screens or the screens themselves in some models that were not made for constant use in a car) approach won't fly. 10 years is a decent development time for a plane, if you skip the parts that Tesla have no experience with it and there'd be plenty of R&D to make them work. For reference, Bombardier, a company with decades of aeronautics experience and an established supply chain, started work on the C-Series in 2004. First flight was in 2014, first commercial service in 2016, and it nearly banrkupted them. Unless Tesla are already currently working on an electric airplane, i call bullshit on them having one in 10 years. Considering they already have the truck and semi which are oversold and underdelivered/delayed, do you think they have the capacity to tackle such a huge undertaking any time soon? As to your other comment that Airbus won't do it - they've been on it since 2010: https://www.airbus.com/innovation/zero-emission/electric-flight.html https://www.airbus.com/innovation/zero-emission/electric-fli... If one of the biggest companies in aviation has been working on it for a decade and doesn't have anything commercially viable yet to show for it, and estimate it will take them another decade for this, what makes you think a company with no aeronautics experience and history of overpromising and underdelivering can do it all in a decade?

patd 5y ago

On the automotive side, they are also a worldwide dealership network, a nascent insurance company.

jonathankoren 5y ago
Name a mass market international car manufacturer that doesn't have a worldwide dealership network and an absolutely massive financial arm?
- patrickk 5y ago
  Most other OEMs don’t own much dealers. Tesla is more like Apple by owning their own retailers and controlling the whole value chain.
  - deleted 5y ago
    [deleted]
- acchow 5y ago
  AFAIK, the major car manufacturers' dealership networks are franchises. Yes, they have massive financial arms but they are for financing the vehicles, not for insurance.
  - jonathankoren 5y ago
    Car manufacturers aren't by an large allowed to own dealerships in the United States. The point is, the number of dealerships is a good proxy for demand and sales. Also, dealerships by and large don't make much money on the sale of cars (due to having to purchase the cars from the manufacturer), but rather they make their money on the service and repair of cars. Even then, they're not really rolling in the dough. General Motors's old financial arm was GMAC, now Ally Bank. Under General Motors's ownership, they offered credit cards[+], mortgages, and were in the insurance market since 1939. This is not an innovation. [+] This was the only credit card my parents had for over a decade.

rtpg 5y ago

Maybe what you're saying is true regarding the company itself, but it's a meme stock. You go down and talk to people, people will say that yet wouldn't actually invest in the basket of companies of those industries. It's not a problem for Tesla or Elon per-se, but we shouldn't assign intelligence to people basically voting for their favs with their wallets.

TeMPOraL 5y ago
Shouldn't also blame these people, because the stock market is as much prescriptive as it's predictive: if enough people "vote for their favs with their wallets", those favs may actually start (or keep) doing OK because of that, if they're not completely incompetent. (Myself, if I had some funds that are not already earmarked for something more important, I'd dump some into TSLA just as an expression of support to Musk and electrification of transport. I'm sure many people did just that, with no expectations of return.)
- guiriduro 5y ago
  Isn't Tesla one of the least capital efficient ways to invest in transport electrification? How much of that will end up in genuine R&D and furtherance of your aims, as against paying for transient meme interest and massive risk loading?
  - panick21_ 5y ago
    Tesla spends like 5x as much per car on R&D. They literally developed a completely new battery manufacturing factory and cathode plant from the ground up. Plus of course their own batteries with their own chemistries. No other car company comes even close to that. They are vertically integrating to the point where they themselves are building their own battery manufacturing equipment. They are even slowly getting into mining themselves. And of course solar, stationary storage and so on. Hard to see what company is doing considerable more. Tesla is doing a pretty large amount of innovation.
    - 5y ago

dado3212 5y ago

For the record, their market cap is also greater than "Australia's Woodside Petroleum, Chevron, Exxon Mobil, Imperial Oil, Royal Dutch Shell, Shell Energy North America, Canadian Natural Resources, ConocoPhillips and French group Total [combined]" [1], so they're also valued kind of crazy compared to energy companies...and that was in January 2021 before the most recent spike. Sure, part of that is faith in renewables. But in any fair comparison their stock price is still a little confusing. [1] https://www.tesmanian.com/blogs/tesmanian-blog/teslas-market-cap-exceeds-the-total-value-of-a-number-of-oil-and-gas-companies-that-s-p-may-downgrade https://www.tesmanian.com/blogs/tesmanian-blog/teslas-market...

TearsInTheRain 5y ago
They are also an innovation engine. You have to value all of the things they havent created yet but will.
- cinntaile 5y ago
  What part of their market cap is unrealized tech dreams and what part is substance, in the traditional value investor sense, in your opinion?
  - trhway 5y ago
    Tesla price to revenue is 20x - a pretty normal for a tech company.
    - listenallyall 5y ago
      Tech companies generally sell software or ad space with near-zero marginal costs. Tesla does not.
      - trhway 5y ago
        Not really. The modern tech companies, FAANG, and many doing SaaS, etc. consume highly expensive labor and consume it while not linear, yet still in some significant correlation to the revenue, thus one can see that they have kind of significant marginal costs. While Tesla's marginal costs will more and more will be dominated by the R&D.

jonathankoren 5y ago

Every car manufacturer is a supply chain and and owns their own component production. Ford owns Motorcraft. General Motors owns AC Delco. Tesla doesn't have nearly the size of the distribution network of any of the oil companies. The fact is Tesla was trading at 1000x historic earnings, and 161x future earnings, or to put it another way, 10x any other car manufacturer, and this this was before this deal. [0] This simply doesn't make any sense. [0] https://www.tradestation.com/insights/2021/04/08/tesla-overvalued-comparison-gm-ford/ https://www.tradestation.com/insights/2021/04/08/tesla-overv...

Seanambers 5y ago
As long as Tesla can grow at or around 50% a year all those numbers you are using are useless. They will be halved every year from the current level. Yeah right now its seems crazy, and it is a unbelievably high valuation. But its more a sign of things to come. The other OEMs are laden with debt, which Tesla doesn't have so any comparison there would be at the EV level which doesn't make Tesla look that out of line considering it is about to overtake in 3-4 years most of the companies it is compared with. Also that debt the other OEMs have, was used to build ICE factories and technologies which are quickly becoming outdated. If and its a rather big IF I'll grant you that Tesla manages to achieve what they aim for which is 20 million cars in 2030, thats effectively 1/5 market share globally. Add into that the energy storage, charging network, solar roof tiles, AI and FSD. However any signs of growth weakness or interest rate changes will wreak havoc for sure. Even if Tesla falters, the other LICE OEMs are destined to fail, maybe 1-2 survives (GM/VW), the cat is out of the bag and what looked like a totally entrenched industry has been blown wide open by Tesla, and loads of other startups are following through.
- jonathankoren 5y ago
  Tesla needs to execute, and I’m not sure that’s their strong suit. Sure they identified that it was finally time for the electric car, and made an electric car that wasn’t ugly as sin (gdiaf CitiCar and EV-1), but theiyre plagued with manufacturing delays and poor workmanship. The other manufacturers simply are better at putting quality cars out the door. Sure they were late to the game, and but it’s not a foregone conclusion that Tesla (or any startup) is going to dominate this market. As for AI and FSD, I’ll put my flag in the sand. We will not have production fully autonomous self driving cars (ie cars without controls) on uncontrolled surface streets in 20 years. From what I understand, the technology has hit a plateau, and there’s just way too many edge cases. If this wasn’t the case, you wouldn’t have people like Andrew Ng going around telling people to redesign cities to make it easier for robot drivers. If it does happen, it’s not going to be Tesla. I don’t think they’re the technology leader here. Last time I read something, Cruise and Waymo were leading, and Elon’s insistence on not having lidars was holding Tesla back.

ikerdanzel 5y ago

Tesla is as much speculative as wework. Tesla revenue absolutely can't justify the current stock price. It may turn out it can decades later but definitely not now. Would you pay current Apple price back in the 90s? Apple did turnout able to justify current pricing but no sane investors will agree to pay that price. If today Tesla disappear from earth, nothing much happens. If those oil companies you mentioned disappear, shipping and airlines will stop. Dupont too will stop. Tesla technology can be easily copied by others as you can see many car manufacturers are catching up fast. Batteries and solar are all available widely. A barrel of oil under Exxon will not be able to be cloned by BP. BP has to have their own oil rig to produce that.

freemint 5y ago

If your business model is an affine combination of other business models your valuation should also be an affine combination of the valuation functions of these business models. This is not the case for Tesla.

albatrosstrophy 5y ago

Exactly what so many people are missing. Unlike other car companies, Tesla run almost the whole value chain themselves, from software to hardware. In a way, they're an amalgamation of Blackberry and GM and Exxon and whatever in between. And they're also going into AI robots and home solar. While these may be hits or misses, they underline the immense market penetration of Tesla. They're not just cars, which is why many investors project a much higher valuation for them in the coming years.

oxfordmale 5y ago

Tesla is an amazing company, however, still hasn't reached the peak of inflated expectations. As a seasoned equity investor put it: "Tesla the stock isn't being valued by any metrics that make sense and today investors are paying too much for their future growth which is dangerous."

nebula8804 5y ago

Do we actually have a detailed document explaining how much of their component production is actually in house? It seems like there are A LOT of common components between Tesla and others while at the same time they are clearly doing a lot of in house things that others dropped decades ago. (eg. Seat Production, having metallurgy department to come up with better alloys etc.) These are things other OEMs tossed to the curb decades ago.

tw04 5y ago

> They are also a car manufacturing supply chain, having brought much of their component production in house. They are also an energy company, both generation and storage, but also distribution, like gas stations. So basically a car company. GM makes their cars in-house. They own their own parts supplier (acdelco) and charging/distribution network (Ultium Charge 360). Ford and Stellantis are working on the same.

jiveturkey 5y ago
Like other car companies, also their own finance arm.

nuerow 5y ago

> Tesla’s stock price is confusing if you compare them to a car company. But they are not just a car company. Tesla's stock price is confusing because it cannot be explained, let alone justified, by any market analysis, results, or market price calculation. It's purely willingness to pay driven by meme stock speculation. > They are also a car manufacturing supply chain, having brought much of their component production in house. This assertion makes absolutely no sense given that Tesla's market value is currently greater than Volkswagen's market value, and by no means is Tesla even comparable with Volkswagen in terms of any of the criteria you've brought up.

seanmcdirmid 5y ago
Stock prices are more about growth potential than existing size. Tesla is valued more than Volkswagen because it is expected to be bigger in the future (or VW is expected to be smaller in the future, or a mix of both). We’ve been through this before with tech stocks, and the enthusiasm for future growth has shown to be often correct, and also often incorrect. Playing the market is a bit crazy like that.