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There is $254.20 billion in Toyota shares and they made 8.7 million cars in 2023. Tesla's market cap is $744.17 billion for 1.8 million cars, 14x higher per car

There is $254.20 billion in Toyota shares and they made 8.7 million cars in 2023. Tesla's market cap is $744.17 billion for 1.8 million cars, 14x higher per car. If Teslas price were based on the possibility that they could eventually reach a bit over double Toyota's production, they wouldn't already be almost 3x more highly valued.

jliptzin 3y ago
Missing from your calculation is the fact that Tesla makes almost 10 times more profit per vehicle than Toyota does, and is still growing sales at a much faster rate. Market cap is much more closely related to total profit and future company outlook rather than a current snapshot of the number of cars sold.
- oblio 3y ago
  Tesla doesn't have a huge backlog of vehicles to service and recall nor a ton of expensive lawsuits active, though they're getting there. And they're not making any $20k car which is how they reach 20 million cars. Guess what the profit per car for those is.
  - jliptzin 3y ago
    They also don’t have dealer networks or unions, almost no debt, and have somehow maintained those high margins despite their low debt and rapid growth. It’s possible that by the time they start making the $20k car their margins will still be relatively high compared to other cars in the same price range. I wonder how almost $200 billion in debt at these interest rates might factor into your calculations? Or were you not aware of Toyota’s debt? https://www.statista.com/chart/27743/companies-with-the-highest-net-debt-in-2021-2022/ https://www.statista.com/chart/27743/companies-with-the-high...
    - oblio 3y ago
      I wasn't aware of Toyota's (or VW's debt), but just raw debt numbers don't provide enough insight. Is it long term debt? Short term? What are the interest rates? And again, let's see Tesla a few years down the line when political and social factors start weighing them down, too. The big automakers have the profit margins they do not just simply because they're all dumb, as Tesla fanboys would love to believe, but because their environment is constrained by many things, primarily legislation. My guess, Tesla will stabilize as a major car maker, maybe even #1 for a short period of time, and after a while the shine will wear off. They'll just be GM for the internet era.
      - jliptzin 3y ago
        But even just assuming 0% interest rate on that debt is still a lot better than ignoring it entirely. For simplicity you can add Toyota's $200 billion debt to its market cap to do a more apples to apples comparison with Tesla (since tesla only has ~$5 billion debt). So now we're talking $700B for Tesla to $500B Toyota assuming Toyota's debt is interest-free. As for political factors, it seems that would only benefit Tesla vs the other automakers as Tesla only makes electric cars which is where many governments are trying to push consumers to. Other carmakers have to figure out a way to convert their ICE assembly lines to EV lines if we assume that we'll be moving towards a mostly electric future (which I believe, regardless if it's Tesla or someone else who takes us there).
- notahacker 3y ago
  A current snapshot of the per vehicle profit of a luxury car manufacturer versus a mass market manufacturer tells us even less. Suffice to say that if they were to scale sales to hit the multiple of Toyota's annual profit level implied by their respective market caps, Tesla would need to be selling cars for a lot less than $40k...

jliptzin 3y ago

Missing from your calculation is the fact that Tesla makes almost 10 times more profit per vehicle than Toyota does, and is still growing sales at a much faster rate. Market cap is much more closely related to total profit and future company outlook rather than a current snapshot of the number of cars sold.

oblio 3y ago
Tesla doesn't have a huge backlog of vehicles to service and recall nor a ton of expensive lawsuits active, though they're getting there. And they're not making any $20k car which is how they reach 20 million cars. Guess what the profit per car for those is.
- jliptzin 3y ago
  They also don’t have dealer networks or unions, almost no debt, and have somehow maintained those high margins despite their low debt and rapid growth. It’s possible that by the time they start making the $20k car their margins will still be relatively high compared to other cars in the same price range. I wonder how almost $200 billion in debt at these interest rates might factor into your calculations? Or were you not aware of Toyota’s debt? https://www.statista.com/chart/27743/companies-with-the-highest-net-debt-in-2021-2022/ https://www.statista.com/chart/27743/companies-with-the-high...
  - oblio 3y ago
    I wasn't aware of Toyota's (or VW's debt), but just raw debt numbers don't provide enough insight. Is it long term debt? Short term? What are the interest rates? And again, let's see Tesla a few years down the line when political and social factors start weighing them down, too. The big automakers have the profit margins they do not just simply because they're all dumb, as Tesla fanboys would love to believe, but because their environment is constrained by many things, primarily legislation. My guess, Tesla will stabilize as a major car maker, maybe even #1 for a short period of time, and after a while the shine will wear off. They'll just be GM for the internet era.
    - jliptzin 3y ago
      But even just assuming 0% interest rate on that debt is still a lot better than ignoring it entirely. For simplicity you can add Toyota's $200 billion debt to its market cap to do a more apples to apples comparison with Tesla (since tesla only has ~$5 billion debt). So now we're talking $700B for Tesla to $500B Toyota assuming Toyota's debt is interest-free. As for political factors, it seems that would only benefit Tesla vs the other automakers as Tesla only makes electric cars which is where many governments are trying to push consumers to. Other carmakers have to figure out a way to convert their ICE assembly lines to EV lines if we assume that we'll be moving towards a mostly electric future (which I believe, regardless if it's Tesla or someone else who takes us there).
notahacker 3y ago
A current snapshot of the per vehicle profit of a luxury car manufacturer versus a mass market manufacturer tells us even less. Suffice to say that if they were to scale sales to hit the multiple of Toyota's annual profit level implied by their respective market caps, Tesla would need to be selling cars for a lot less than $40k...