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Tesla is profitable. The profit is propped up a bit by subsidies, but it seems strange to include the company in a discussion about service providers that are b

Tesla is profitable. The profit is propped up a bit by subsidies, but it seems strange to include the company in a discussion about service providers that are battling in a war of attrition.

mdoms 5y ago
You can be profitable and also wildly overvalued. If I invest $50 million for a 50% stake in my neighbour's kids' lemonade stand it's very unlikely to be a reasonable valuation regardless of their gross margin.
ska 5y ago
> The profit is propped up a bit by subsidies, b Does this mean that Tesla would have a smaller profit margin without subsidies, or that Tesla would not be profitable in real terms without the subsidies?
- selectodude 5y ago
  Both. People would purchase fewer teslas without the tax credit and Tesla would have less income without the ability to trade their tax credits to “dirtier” manufacturers.
  - ska 5y ago
    Sure this is all coupled; But I was trying to separate "propped up a bit" from "pretty dependent on". It's not really clear without having looked into the details.
lostcolony 5y ago
Tesla is profitable; so are some small mom and pop stores. The valuation isn't a boolean "isProfitable ? trillion dollars : worthless". Compare Tesla's revenues against other trillion dollar companies and it clearly seems overvalued. Here's Bloomberg's analysis - https://www.bloomberg.com/news/articles/2021-10-26/tesla-is-lowest-revenue-company-to-hit-1-trillion-market-value https://www.bloomberg.com/news/articles/2021-10-26/tesla-is-...
- OldHand2018 5y ago
  > However, Jonas said Morgan Stanley clients also noted the company’s larger addressable market, and an opportunity to dominate the internet-of-cars market as other possible factors built into its valuation. Ah yes, the internet-of-cars market. It would be very wise and lucrative to dominate there.
  - lostcolony 5y ago
    Yeah; the ink spilled on "IoV" (Internet of Vehicles) is...hilariously bad. And even if you assume there's something there, Tesla doesn't seem well prepared to dominate it, since all of the use cases assume every car is connected. Maybe I missed it, but I haven't seen Tesla seeking to write software for other manufacturers, nor seeking to create RFCs or similar collaborative methods for ensuring a standard that would connect all vehicles.

Tesla is profitable. The profit is propped up a bit by subsidies, but it seems strange to include the company in a discussion about service providers that are battling in a war of attrition.

mdoms 5y ago

You can be profitable and also wildly overvalued. If I invest $50 million for a 50% stake in my neighbour's kids' lemonade stand it's very unlikely to be a reasonable valuation regardless of their gross margin.

ska 5y ago

> The profit is propped up a bit by subsidies, b Does this mean that Tesla would have a smaller profit margin without subsidies, or that Tesla would not be profitable in real terms without the subsidies?

selectodude 5y ago
Both. People would purchase fewer teslas without the tax credit and Tesla would have less income without the ability to trade their tax credits to “dirtier” manufacturers.
- ska 5y ago
  Sure this is all coupled; But I was trying to separate "propped up a bit" from "pretty dependent on". It's not really clear without having looked into the details.

lostcolony 5y ago

Tesla is profitable; so are some small mom and pop stores. The valuation isn't a boolean "isProfitable ? trillion dollars : worthless". Compare Tesla's revenues against other trillion dollar companies and it clearly seems overvalued. Here's Bloomberg's analysis - https://www.bloomberg.com/news/articles/2021-10-26/tesla-is-lowest-revenue-company-to-hit-1-trillion-market-value https://www.bloomberg.com/news/articles/2021-10-26/tesla-is-...

OldHand2018 5y ago
> However, Jonas said Morgan Stanley clients also noted the company’s larger addressable market, and an opportunity to dominate the internet-of-cars market as other possible factors built into its valuation. Ah yes, the internet-of-cars market. It would be very wise and lucrative to dominate there.
- lostcolony 5y ago
  Yeah; the ink spilled on "IoV" (Internet of Vehicles) is...hilariously bad. And even if you assume there's something there, Tesla doesn't seem well prepared to dominate it, since all of the use cases assume every car is connected. Maybe I missed it, but I haven't seen Tesla seeking to write software for other manufacturers, nor seeking to create RFCs or similar collaborative methods for ensuring a standard that would connect all vehicles.