5 ms·

For a substantial part, Tesla stock is not valued based on its underlying fundamentals, but on its polularity as a David vs Goliath story, and on Elons charisma

For a substantial part, Tesla stock is not valued based on its underlying fundamentals, but on its polularity as a David vs Goliath story, and on Elons charisma/character. The latter two won't likely yield actual value, so financially speaking ste stock is highly overvalued. That said, I'd never bet against it, because those two factors are entirely dominant in TSLA valuation.

wcunning 3y ago
"The market can remain irrational longer than you can remain solvent" has been a financial truism for a long time. Tesla is just the most glaring and recent example of it.
aantix 3y ago
Will Tesla be the one to solve self driving?
- wyre 3y ago
  No. Tesla calling their cruise control Autopilot is a gross overstatement, meanwhile Cruise and Wayne has rolled out actual driverless vehicles and Honda released the first Level 3 autonomous vehicle to Japan last March [1]. [1] https://web.archive.org/web/20210305144526/https://mainichi.jp/english/articles/20210304/p2g/00m/0bu/109000c https://web.archive.org/web/20210305144526/https://mainichi....
  - seanmcdirmid 3y ago
    I thought calling it autopilot was an understatement. All auto pilot does on an airplane is keep the plane flying in a straight line. Cruise controls on modern cars slow down and can keep a lane. It’s telling that Tesla doesn’t call it’s FSD “autopilot”, using the term instead for modern cruise control features that most other higher end new cars have.
deleted 3y ago
[deleted]
grecy 3y ago
> Tesla stock is not valued based on its underlying fundamentals I'm no Musk fan with his latest comments, but I disagree with this quite strongly. Have a look at how many vehicles Toyota have produced for the last 10 years, and have a look at their stock price. Take a guess at their stock price in 10 more years. It's a flat line Now have a look at the number of vehicles Tesla have produced in the last ten years. Now guess at their stock price in 10 more years. There is a chance Tesla will make 20 million vehicles by 2030. If they do, their stock price will go up a lot. There really is not much chance of Toyota doing that. (they're not trying to)
- jliptzin 3y ago
  Yea, I’m no Musk fan either but declaring Tesla overvalued simply because of Musk’s presumed appeal is just lazy.
  - anothernewdude 3y ago
    Sure. It's lazy and correct.
- jrflowers 3y ago
  This is a good point. The fact that stock prices are not connected to output with car companies is an indicator that the market is rational. This explains why the appeal of the Tesla figurehead is not a factor
- nateglims 3y ago
  20 million annually? Because Toyota sold nearly 6 million cars in a year.
  - grecy 3y ago
    Yes. They did just under 2 million this year, and the goal is 20 million annually by 2030. Even if they don't hit it by 2030, based on everything else they've done to date, I think it's likely they will eventually get there.
- 3y ago
swamp_donkey 3y ago
I think the valuation is based on potential for growth. People expect Tesla to grow by doing new things that other companies don’t have the ability to do, either because they have a cash cow they don’t want to disrupt, they don’t appreciate the value software can bring to automotive with some more love than it has been getting, they don’t have the people and culture to take risks and everyone is happy with small tweaks to existing designs, they don’t know how to go back to the drawing board and make a new car and new production line from first principles. Tesla has learned how to do everything in a decade and has exceeded traditional automakers in some areas and has nothing to lose. I don’t care about Elon, I have never owned Tesla stock, but I surely admire his ability to execute, and I think that is part of the reason the market assigns such a high multiple Tesla - they are going to be at the vanguard of any developments in the electric terrestrial transportation space.
raincom 3y ago
One should never short a stock based on fundamentals. That’s an expensive lesson every stock trader would learn after incurring losses.
FireBeyond 3y ago
Tesla is a Schrödinger. David vs Goliath when that fits the narrative. And then fans are all too eager to remind us of the (utterly ridiculous at times) market cap when that fits the narrative. (Oh yes, absolutely worth more than deep breath Toyota, Volkwagen Group, Hyundai/Kia, General Motors, Ford, Nissan, Honda, Fiat Chrysler, Renault, Suzuki, Daimler, BMW, Mazda and Mitsubishi combined. (Oh, and several Chinese manufacturers: SAID, Geely, Changan, Dongfeng).)
matthewdgreen 3y ago
In fairness to Tesla stockholders, I think there is some genuine attraction to owning a company that isn’t entirely hobbled by US professional management culture, and that is trying to build new things on an aggressive schedule. And watching the big US carmakers fall on their faces trying to launch EVs, I’ve come to the conclusion that maybe those “Tesla will eat the entire legacy car industry” predictions aren’t quite as outlandish as I once thought.
- makeitdouble 3y ago
  > isn’t entirely hobbled by US professional management culture When the only competitor fully keeping up/overpassing Tesla on the EV side is BYD, and VW is cuting through it's workforce to "stay competitive", it gives a lot of pause on the ethics of the car makers in the field. Do we need to go through a dark age again before ever getting out of the tunnel ?
  - dzhiurgis 3y ago
    Imagine how low the bar is when someone like BYD can become number 1…
    - matthewdgreen 3y ago
      I think this is going to be one of those comments like “gosh Nissan/Sony/Toyota only makes cheap and junky items, who could ever imagine them becoming a mainstream competitor to established brands like GM/Zenith/Eagle.”
      - dzhiurgis 3y ago
        It wasn't my point, but I think we agree. Legacy auto can't make a competitive small EV. I give it 50% chance it won't in US - Tesla will release cheaper model by the time BYD starts selling (if ever) in US.
        matthewdgreen 3y ago

wcunning 3y ago

"The market can remain irrational longer than you can remain solvent" has been a financial truism for a long time. Tesla is just the most glaring and recent example of it.

aantix 3y ago

Will Tesla be the one to solve self driving?

wyre 3y ago
No. Tesla calling their cruise control Autopilot is a gross overstatement, meanwhile Cruise and Wayne has rolled out actual driverless vehicles and Honda released the first Level 3 autonomous vehicle to Japan last March [1]. [1] https://web.archive.org/web/20210305144526/https://mainichi.jp/english/articles/20210304/p2g/00m/0bu/109000c https://web.archive.org/web/20210305144526/https://mainichi....
- seanmcdirmid 3y ago
  I thought calling it autopilot was an understatement. All auto pilot does on an airplane is keep the plane flying in a straight line. Cruise controls on modern cars slow down and can keep a lane. It’s telling that Tesla doesn’t call it’s FSD “autopilot”, using the term instead for modern cruise control features that most other higher end new cars have.

deleted 3y ago

[deleted]

grecy 3y ago

> Tesla stock is not valued based on its underlying fundamentals I'm no Musk fan with his latest comments, but I disagree with this quite strongly. Have a look at how many vehicles Toyota have produced for the last 10 years, and have a look at their stock price. Take a guess at their stock price in 10 more years. It's a flat line Now have a look at the number of vehicles Tesla have produced in the last ten years. Now guess at their stock price in 10 more years. There is a chance Tesla will make 20 million vehicles by 2030. If they do, their stock price will go up a lot. There really is not much chance of Toyota doing that. (they're not trying to)

jliptzin 3y ago
Yea, I’m no Musk fan either but declaring Tesla overvalued simply because of Musk’s presumed appeal is just lazy.
- anothernewdude 3y ago
  Sure. It's lazy and correct.
jrflowers 3y ago
This is a good point. The fact that stock prices are not connected to output with car companies is an indicator that the market is rational. This explains why the appeal of the Tesla figurehead is not a factor
nateglims 3y ago
20 million annually? Because Toyota sold nearly 6 million cars in a year.
- grecy 3y ago
  Yes. They did just under 2 million this year, and the goal is 20 million annually by 2030. Even if they don't hit it by 2030, based on everything else they've done to date, I think it's likely they will eventually get there.
3y ago

swamp_donkey 3y ago

I think the valuation is based on potential for growth. People expect Tesla to grow by doing new things that other companies don’t have the ability to do, either because they have a cash cow they don’t want to disrupt, they don’t appreciate the value software can bring to automotive with some more love than it has been getting, they don’t have the people and culture to take risks and everyone is happy with small tweaks to existing designs, they don’t know how to go back to the drawing board and make a new car and new production line from first principles. Tesla has learned how to do everything in a decade and has exceeded traditional automakers in some areas and has nothing to lose. I don’t care about Elon, I have never owned Tesla stock, but I surely admire his ability to execute, and I think that is part of the reason the market assigns such a high multiple Tesla - they are going to be at the vanguard of any developments in the electric terrestrial transportation space.

raincom 3y ago

One should never short a stock based on fundamentals. That’s an expensive lesson every stock trader would learn after incurring losses.

FireBeyond 3y ago

Tesla is a Schrödinger. David vs Goliath when that fits the narrative. And then fans are all too eager to remind us of the (utterly ridiculous at times) market cap when that fits the narrative. (Oh yes, absolutely worth more than deep breath Toyota, Volkwagen Group, Hyundai/Kia, General Motors, Ford, Nissan, Honda, Fiat Chrysler, Renault, Suzuki, Daimler, BMW, Mazda and Mitsubishi combined. (Oh, and several Chinese manufacturers: SAID, Geely, Changan, Dongfeng).)

matthewdgreen 3y ago

In fairness to Tesla stockholders, I think there is some genuine attraction to owning a company that isn’t entirely hobbled by US professional management culture, and that is trying to build new things on an aggressive schedule. And watching the big US carmakers fall on their faces trying to launch EVs, I’ve come to the conclusion that maybe those “Tesla will eat the entire legacy car industry” predictions aren’t quite as outlandish as I once thought.

makeitdouble 3y ago
> isn’t entirely hobbled by US professional management culture When the only competitor fully keeping up/overpassing Tesla on the EV side is BYD, and VW is cuting through it's workforce to "stay competitive", it gives a lot of pause on the ethics of the car makers in the field. Do we need to go through a dark age again before ever getting out of the tunnel ?
- dzhiurgis 3y ago
  Imagine how low the bar is when someone like BYD can become number 1…
  - matthewdgreen 3y ago
    I think this is going to be one of those comments like “gosh Nissan/Sony/Toyota only makes cheap and junky items, who could ever imagine them becoming a mainstream competitor to established brands like GM/Zenith/Eagle.”
    - dzhiurgis 3y ago
      It wasn't my point, but I think we agree. Legacy auto can't make a competitive small EV. I give it 50% chance it won't in US - Tesla will release cheaper model by the time BYD starts selling (if ever) in US.
      - matthewdgreen 3y ago