5 ms·

I never understood why Tesla valuation is orders of magnitude higher than honda

zerotolerance 1y ago
Because it isn't a car company, it feels more like a fraud funnel for retail investor funds into multi-billion special dividends and bonuses for Musk.
- thethimble 1y ago
  You're welcome to short it and make lots of money if you are correct!
  - jordanscales 1y ago
    “Markets can remain irrational longer than you can remain solvent.” - John Maynard Keynes
  - whatever1 1y ago
    Enron was going up for years and years before the fraud could not be hidden anymore. A short Tesla position is correct. The question is at what expiration date ?
  - rsynnott 1y ago
    Often the difficult thing isn't predicting "this bubble will collapse eventually"; it's predicting the _date_ of the collapse. You really need both, to short.
  - justin66 1y ago
    Why would shorting TSLA make him lots of money if he is correct? If he's correct, the fraud is working. He hasn't staked out a position on what might stop it and when.
  - nitwit005 1y ago
    It's generally difficult to do. The problem is you have no idea when the collapse in value will happen, or even if it will. A lot of the companies I'd have bet against in the past, like AOL, sold for huge sums of money, and the purchasing company ended up regretting their decision. The actual AOL stock never collapsed.
  - surgical_fire 1y ago
    This is always a shit argument. Timing the market is incredibly hard. Investors can be extremely irrational. Haven't we learned anything with the GameStop bullshit from a few years ago?
    - IT4MD 1y ago
      You're forgetting the bottomless human trait of "That won't happen to me", that remains right up to where it happens to them. As far as GME, if the SEC worked, then GME would have never been a thing.
      - surgical_fire 1y ago
        I agree. As for the GME thing, the only reason why I sort give it a pass is because it was sort of an unprecedented thing. I am not sure if regulations have been updated to address a future similar incident. At least it resulted in the "This Is Financial Advice" video from Folding Ideas. Fascinating watch after following the event back in the day - and losing €1500 because I didn't reach my goal of earning €500 to buy a PS5 with the profit. If shit went up for just one more day I would have reached my goal. Was a lesson to never try timing anything.
        IT4MD 1y ago
        I happened to "find" an very old IRA I had from a prior employer that had about $1200 sitting in it. I threw it all into GME. I pulled $500 in profits, and left the initial investment to ride. Today, I'm down about $300 on those shares (taken with the $500 in gains, I'm technically still up by $200), and that's fine. I believe in the leadership, I like the company's current state (flush with cash, little/no debt) and I'm just going to keep letting it ride. When I retire in 10 years or so, we'll see where it's at. Worst case, I'm out $700 bucks. Best case, I get that new riding lawnmower, for free! Otherwise, it's Index funds, have a nice day, because none of us can compete with Wall Street.
  - FreakLegion 1y ago
    When it peaks like the beginning of this month or late last year, I prefer to write naked calls. (Don't try this at home.)
  - LightBug1 1y ago
    The market can remain fraudulent longer than you can stay solvent.
- IT4MD 1y ago
  Its a meme stock kept at stratospheric heights by hype. It's only built 1 new vehicle in the last decade and that was the CyberFlop. Watch the stock on any news. Completely disconnected from reality.
nixass 1y ago
Becaut Tesla is everything else (whatever is hot topic) than car manufacturer /s
thelastgallon 1y ago
It's a meme stock, like an NFT with a ticker.
standardUser 1y ago
I understood it when Tesla was the path towards widespread electric car adoption. Now they have tons of competition and an aging lineup, I'm amazed they're competitive at all in East Asia.
- philistine 1y ago
  Look at their sales numbers ... they aren't.
- Rover222 1y ago
  The current valuation is largely driven by a future in robotics, not in traditional consumer vehicles. Both in driverless cars and the humanoid form factor. There is not another US company with anything near the position of tesla in terms of vertical integration, in-house self driving technology, manufacturing advancements, ambitious leadership, engineering talent, etc etc. Chinese companies are the only large threat on the horizon.
  - JumpCrisscross 1y ago
    > current valuation is largely driven by a future in robotics It probably isn’t, given Tesla has no unique lead in robotics and its recent news of setbacks didn’t move the market. Tesla stock is a bet on Musk. It’s why the Board pays him hundreds of billions of dollars to not lose focus on a business he’s very obviously bored with.
    - Rover222 1y ago
      No unique lead on robotics, except the largest fleet of self driving cars by several orders of magnitude, the largest training cluster, custom silicon, experience in mass produciton and vertical integraiton, a much more ambitious Optimus program than the causal headlines would have you know about...
      - senordevnyc 1y ago
        Last I checked there are zero self-driving Teslas.
deleted 1y ago
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_ea1k 1y ago
Usually people respond to this by questioning Tesla's high valuation, and that's fair. TBH, though, I also wonder why auto companies tend to be valued so lowly. Often P/E ratios are in the single digits, and frequently paired with high dividends. Maybe both valuations are really wrong.
- bryanlarsen 1y ago
  Auto companies aren't valued as lowly as the P/E ratio indicates. Auto companies have massive amounts of debt, and debt has higher priority than equity. Instead of "P" you should use "Enterprise Value", which is Equity + Debt - Cash. (cash subtracted to prevent double counting it). Their EV/E ratios are much more reasonable. And Tesla's used to be only a small multiple of traditional companies, when I owned shares. Now they aren't, and I don't own shares.
- justin66 1y ago
  Some of those companies have an awful lot of debt on their balance sheets.
- jerlam 1y ago
  Cars are a mature market, with lots of competitors and flat overall sales. Many brands are consolidating or contracting. US total vehicle sales, historical: https://fred.stlouisfed.org/series/TOTALSA https://fred.stlouisfed.org/series/TOTALSA Growth markets like China have stiff domestic competition and many barriers to entry.
zpeti 1y ago
The answer is fairly obvious, humanity is always more obsessed with potential value than actual value. Elon sells that potential very well, but he does actually follow up in a decent way. Turning the impossible into late is a legitimate business strategy, because you create markets that weren't there before (like cheap satellite launches). And he has a history of doing this, and he's trying to do it again with optimus and robotaxi. There's massive potential in humanoid robots and robotaxis, which is why people are willing to take a risk. You might think that's irrational, and that's fine. Others do not. Compare this to other car companies, they don't offer any vision of changing the future in any major way or bringing new products to market. That is boring and predictable. Still valuable, but not as much as Tesla.
specialist 1y ago
Me neither. Which is prob why I remain poor (comparatively). Now that our domestic grid storage market has "crossed the chasm" -- new energy with solar & battery is cheap enough and quickest to deploy -- methinks future Tesla will do fine. Surely making up for any lost vehicle revenue.
nicoburns 1y ago
For the same reason that Bitcoin is valuable and property prices in many markets are insane. It's valuable because other people consider it valuable. The stock market stopped being an accurate measure of the underlying value of the assets it tracks decades ago, if it ever was.
JumpCrisscross 1y ago
> never understood why Tesla valuation is orders of magnitude higher than honda Tesla has solved the problem of unit profitably manufacturing EVs. Outside America and other petrostates, these are broadly accepted to be the future of transportation. (It’s getting its ass kicked by BYD, which didn’t distract itself with a Cybertruck or what increasingly looks like an Optimus follow-on. But being the only American challenger in a new economy is not worthless.) Tesla’s also lead by a man who has consistently made money for his investors. Even when bets are bad, e.g. Twitter, he’s financially engineered an outcome that ensured, at the very least, nobody who backed him lost money. Tesla being public, he can’t provide that sort of assurance to everyone who buys at any price. But he can at least credibly pretend to do that for anyone who buys in or near a primary.
- Rover222 1y ago
  Nice to see some rational thought around here about Tesla and Musk's role.
- traceroute66 1y ago
  > Tesla has solved the problem of unit profitably manufacturing EVs. Well, you can say "profitably" because Tesla drivers seem to be surprisingly willing to put up with corners being cut in order to achieve said "profitability" ... panel gaps, cheap interiors and lousy software. :)
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  - JumpCrisscross 1y ago
    > you can say "profitably" because Tesla drivers seem to be surprisingly willing to put up with corners being cut in order to achieve said "profitability" Low-end Chinese EVs feel like cheap Teslas. But they’re under $15k. Are panel gaps really worth tens of thousands of dollars to most car buyers?
dkobia 1y ago
Besides being a meme stock, Tesla is also in the enviable position of owning its entire stack - software, hardware, chips, manufacturing etc., unlike Honda that has many critical components built by other manufacturers and not tightly integrated with the software. It is therefore well placed to make much more revenue per vehicle, if only the owner of the company can get out of its way.
- justapassenger 1y ago
  Owning entire stack has benefits for sure, especially if you're dominating market. But it also comes at a huge cost - you now need to pay for R&D for the whole stack yourself. Tesla was dreaming of dominating market. But it looks like it peaked already and its sales are falling. Having to do R&D for entire stack without growth is a very very costly proposal. It often results in just not doing R&D, and falling behind.
deleted 1y ago
[deleted]

Because it isn't a car company, it feels more like a fraud funnel for retail investor funds into multi-billion special dividends and bonuses for Musk.

thethimble 1y ago
You're welcome to short it and make lots of money if you are correct!
- jordanscales 1y ago
  “Markets can remain irrational longer than you can remain solvent.” - John Maynard Keynes
- whatever1 1y ago
  Enron was going up for years and years before the fraud could not be hidden anymore. A short Tesla position is correct. The question is at what expiration date ?
- rsynnott 1y ago
  Often the difficult thing isn't predicting "this bubble will collapse eventually"; it's predicting the _date_ of the collapse. You really need both, to short.
- justin66 1y ago
  Why would shorting TSLA make him lots of money if he is correct? If he's correct, the fraud is working. He hasn't staked out a position on what might stop it and when.
- nitwit005 1y ago
  It's generally difficult to do. The problem is you have no idea when the collapse in value will happen, or even if it will. A lot of the companies I'd have bet against in the past, like AOL, sold for huge sums of money, and the purchasing company ended up regretting their decision. The actual AOL stock never collapsed.
- surgical_fire 1y ago
  This is always a shit argument. Timing the market is incredibly hard. Investors can be extremely irrational. Haven't we learned anything with the GameStop bullshit from a few years ago?
  - IT4MD 1y ago
    You're forgetting the bottomless human trait of "That won't happen to me", that remains right up to where it happens to them. As far as GME, if the SEC worked, then GME would have never been a thing.
    - surgical_fire 1y ago
      I agree. As for the GME thing, the only reason why I sort give it a pass is because it was sort of an unprecedented thing. I am not sure if regulations have been updated to address a future similar incident. At least it resulted in the "This Is Financial Advice" video from Folding Ideas. Fascinating watch after following the event back in the day - and losing €1500 because I didn't reach my goal of earning €500 to buy a PS5 with the profit. If shit went up for just one more day I would have reached my goal. Was a lesson to never try timing anything.
      - IT4MD 1y ago
        I happened to "find" an very old IRA I had from a prior employer that had about $1200 sitting in it. I threw it all into GME. I pulled $500 in profits, and left the initial investment to ride. Today, I'm down about $300 on those shares (taken with the $500 in gains, I'm technically still up by $200), and that's fine. I believe in the leadership, I like the company's current state (flush with cash, little/no debt) and I'm just going to keep letting it ride. When I retire in 10 years or so, we'll see where it's at. Worst case, I'm out $700 bucks. Best case, I get that new riding lawnmower, for free! Otherwise, it's Index funds, have a nice day, because none of us can compete with Wall Street.
- FreakLegion 1y ago
  When it peaks like the beginning of this month or late last year, I prefer to write naked calls. (Don't try this at home.)
- LightBug1 1y ago
  The market can remain fraudulent longer than you can stay solvent.
IT4MD 1y ago
Its a meme stock kept at stratospheric heights by hype. It's only built 1 new vehicle in the last decade and that was the CyberFlop. Watch the stock on any news. Completely disconnected from reality.

nixass 1y ago

Becaut Tesla is everything else (whatever is hot topic) than car manufacturer /s

thelastgallon 1y ago

It's a meme stock, like an NFT with a ticker.

standardUser 1y ago

I understood it when Tesla was the path towards widespread electric car adoption. Now they have tons of competition and an aging lineup, I'm amazed they're competitive at all in East Asia.

philistine 1y ago
Look at their sales numbers ... they aren't.
Rover222 1y ago
The current valuation is largely driven by a future in robotics, not in traditional consumer vehicles. Both in driverless cars and the humanoid form factor. There is not another US company with anything near the position of tesla in terms of vertical integration, in-house self driving technology, manufacturing advancements, ambitious leadership, engineering talent, etc etc. Chinese companies are the only large threat on the horizon.
- JumpCrisscross 1y ago
  > current valuation is largely driven by a future in robotics It probably isn’t, given Tesla has no unique lead in robotics and its recent news of setbacks didn’t move the market. Tesla stock is a bet on Musk. It’s why the Board pays him hundreds of billions of dollars to not lose focus on a business he’s very obviously bored with.
  - Rover222 1y ago
    No unique lead on robotics, except the largest fleet of self driving cars by several orders of magnitude, the largest training cluster, custom silicon, experience in mass produciton and vertical integraiton, a much more ambitious Optimus program than the causal headlines would have you know about...
    - senordevnyc 1y ago
      Last I checked there are zero self-driving Teslas.

deleted 1y ago

[deleted]

_ea1k 1y ago

Usually people respond to this by questioning Tesla's high valuation, and that's fair. TBH, though, I also wonder why auto companies tend to be valued so lowly. Often P/E ratios are in the single digits, and frequently paired with high dividends. Maybe both valuations are really wrong.

bryanlarsen 1y ago
Auto companies aren't valued as lowly as the P/E ratio indicates. Auto companies have massive amounts of debt, and debt has higher priority than equity. Instead of "P" you should use "Enterprise Value", which is Equity + Debt - Cash. (cash subtracted to prevent double counting it). Their EV/E ratios are much more reasonable. And Tesla's used to be only a small multiple of traditional companies, when I owned shares. Now they aren't, and I don't own shares.
justin66 1y ago
Some of those companies have an awful lot of debt on their balance sheets.
jerlam 1y ago
Cars are a mature market, with lots of competitors and flat overall sales. Many brands are consolidating or contracting. US total vehicle sales, historical: https://fred.stlouisfed.org/series/TOTALSA https://fred.stlouisfed.org/series/TOTALSA Growth markets like China have stiff domestic competition and many barriers to entry.

zpeti 1y ago

The answer is fairly obvious, humanity is always more obsessed with potential value than actual value. Elon sells that potential very well, but he does actually follow up in a decent way. Turning the impossible into late is a legitimate business strategy, because you create markets that weren't there before (like cheap satellite launches). And he has a history of doing this, and he's trying to do it again with optimus and robotaxi. There's massive potential in humanoid robots and robotaxis, which is why people are willing to take a risk. You might think that's irrational, and that's fine. Others do not. Compare this to other car companies, they don't offer any vision of changing the future in any major way or bringing new products to market. That is boring and predictable. Still valuable, but not as much as Tesla.

specialist 1y ago

Me neither. Which is prob why I remain poor (comparatively). Now that our domestic grid storage market has "crossed the chasm" -- new energy with solar & battery is cheap enough and quickest to deploy -- methinks future Tesla will do fine. Surely making up for any lost vehicle revenue.

nicoburns 1y ago

For the same reason that Bitcoin is valuable and property prices in many markets are insane. It's valuable because other people consider it valuable. The stock market stopped being an accurate measure of the underlying value of the assets it tracks decades ago, if it ever was.

JumpCrisscross 1y ago

> never understood why Tesla valuation is orders of magnitude higher than honda Tesla has solved the problem of unit profitably manufacturing EVs. Outside America and other petrostates, these are broadly accepted to be the future of transportation. (It’s getting its ass kicked by BYD, which didn’t distract itself with a Cybertruck or what increasingly looks like an Optimus follow-on. But being the only American challenger in a new economy is not worthless.) Tesla’s also lead by a man who has consistently made money for his investors. Even when bets are bad, e.g. Twitter, he’s financially engineered an outcome that ensured, at the very least, nobody who backed him lost money. Tesla being public, he can’t provide that sort of assurance to everyone who buys at any price. But he can at least credibly pretend to do that for anyone who buys in or near a primary.

Rover222 1y ago
Nice to see some rational thought around here about Tesla and Musk's role.
traceroute66 1y ago
> Tesla has solved the problem of unit profitably manufacturing EVs. Well, you can say "profitably" because Tesla drivers seem to be surprisingly willing to put up with corners being cut in order to achieve said "profitability" ... panel gaps, cheap interiors and lousy software. :)
- deleted 1y ago
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- deleted 1y ago
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- JumpCrisscross 1y ago
  > you can say "profitably" because Tesla drivers seem to be surprisingly willing to put up with corners being cut in order to achieve said "profitability" Low-end Chinese EVs feel like cheap Teslas. But they’re under $15k. Are panel gaps really worth tens of thousands of dollars to most car buyers?

dkobia 1y ago

Besides being a meme stock, Tesla is also in the enviable position of owning its entire stack - software, hardware, chips, manufacturing etc., unlike Honda that has many critical components built by other manufacturers and not tightly integrated with the software. It is therefore well placed to make much more revenue per vehicle, if only the owner of the company can get out of its way.

justapassenger 1y ago
Owning entire stack has benefits for sure, especially if you're dominating market. But it also comes at a huge cost - you now need to pay for R&D for the whole stack yourself. Tesla was dreaming of dominating market. But it looks like it peaked already and its sales are falling. Having to do R&D for entire stack without growth is a very very costly proposal. It often results in just not doing R&D, and falling behind.

deleted 1y ago

[deleted]