Tesla isn't a car company. It's an energy company that started with cars.
That fact isn't sufficient to justify its price, but it's a critical component. Just measuring it against car companies misses a large fraction of its value -- maybe even a large majority of it.
Valuations simply don't matter right now, Tesla is bigger than every car company combined and makes less than virtually all of them. I don't get it, but that's how it is. There is no end in sight, if there were a moment to burst any bubble it would have been last March...and it didn't.
Tesla is not valued as car company by the market. 30% of Tesla float is shorted and yet it still has a market cap on par with Ford. I've read a ton of similar arguments about Amazon how it's burning through cash for years how Walmart will crush etc.
People will never understand Tesla's value if they don't understand that Tesla is more than just a car company. (But no comment on the current stock value.)
Also I believe Tesla's valuation is not inherent to company and what it is doing, but hype and our entirely broken capital system with enough players there in pumping its valuation to massive levels.
Tesla's valuation certainly is insane. They're valued higher than GM and Ford, the former moves over 100x more vehicles and both are actually profitable.
If you value Tesla as battery company that happens to make cars, it's just as silly since it's such a small portion of their revenue.
The headline and article are misleading in my opinion, by focusing so closely on comparisons with automakers and calling Tesla an automaker. Yes, Tesla makes automobiles, but they dropped 'Motors' from their name a long time ago in indications that they are much more than cars.
They're solar roofing, too. They're energy storage through batteries, too. They've recently expanded their product lines much past what 'other automakers' are doing. So I don't think it makes much sense to look at TSLA valuation and compared to 'other automakers'.
'Other automakers' are not run by Elon, either. Without injecting an opinion about Elon, he clearly does have a track record of finding new LOB in his startups that are not what the industry expects. I would by this point assume that is also priced in.
If you calculate the expected value from the new market entrances and assume there will be more in the future, and also assume TSLA will become a major player in 2-3 global industries, the valuation may even start to feel low again.
Disclaimer, I bought TSLA at $32 but sold at $150 and been out since. Oh well.
My humble opinion is that Tesla without Musk is worth a small fraction of its current valuation. It's a tiny car manufacturer in a world of hyper-competitive giants, and the only thing that kept it afloat is Musk's incredible drive.
I actually don't consider Tesla a car company. They are a software company with world-leading expertise in energy production and storage. Vehicles are currently what they're mostly focused in applying this technology to, but that will change in the future. The stock price reflects the likelihood that Elon will accomplish the goals he has set out.
If they solve self-driving, that by itself will be worth over 100 billion dollars.
Some believe Tesla is properly described as a battery company instead of a car company. Their valuation is high for current sales though, obviously investors are buying on growth potential. Regretting selling my shares.
All of those things can be true and Tesla's stock can also be over-valued. A rapidly growing and popular company doesn't justify any arbitrary valuation.
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