Team-BHP > The International Automotive Scene


Reply
  Search this Thread
8,858 views
Old 24th January 2020, 14:35   #1
Senior - BHPian
 
vsrivatsa's Avatar
 
Join Date: Jan 2014
Location: Bangalore
Posts: 1,617
Thanked: 3,860 Times
Tesla tops Volkswagen to become 2nd-most-valuable car maker

Tesla Tops Volkswagen to Become Second-Most-Valuable Auto Maker : URL (Wall Street Journal)

Quote:
Elon Musk has navigated Tesla Inc. TSLA 0.46% into new territory, as the electric-car maker’s market value topped $100 billion Wednesday and overtook Volkswagen AG as the world’s No. 2 most valuable auto maker.

Tesla shares rose 4.1% to $569.56, lifting its market cap to $102.7 billion, according to FactSet. Crossing the $100 billion threshold could start unlocking a more than $50 billion pay package for Mr. Musk. Volkswagen shares fell 1.19% in German trading, putting its market cap around 90 billion euros ($99.6 billion).
Tesla Is Now the Second-Most-Valuable Car Maker in the World. Look Out, Toyota : URL

Quote:
Electric-vehicle pioneer Tesla is now the second-most-valuable car manufacturer on the planet— Toyota Motor being the only auto maker that Elon Musk’s company has to eclipse to claim the crown.

Tesla (ticker: TSLA) hit another record in Wednesday-afternoon trading. Shares jumped more than $22, or 4.2%, closing at $569.56. The surge gives Tesla a market value of about $103 billion, leaving previous No. 2 Volkswagen (VOW. Germany) in the dust. The German manufacturer’s market capitalization is about $99 billion.

Last edited by vsrivatsa : 24th January 2020 at 14:38.
vsrivatsa is offline   (11) Thanks
Old 24th January 2020, 21:43   #2
Team-BHP Support
 
SmartCat's Avatar
 
Join Date: Jun 2007
Location: Bangalore
Posts: 6,332
Thanked: 42,093 Times
Re: Tesla tops Volkswagen to become 2nd-most-valuable car maker

I have a bad feeling about this. But many short sellers have bet against Tesla stock only to lose their shirt, and now are on the verge of losing their pants.

VW Group has sold 11 million automobiles to get to a topline of $278 billion. Average car price works out to be $25,000. Operating profit margin is just 5%. Meanwhile, Tesla sold 367,500 automobiles to get to a topline of $21 billion. Average car price works out to be $57,000. Since Tesla is still in investment mode, operating profits are negligible.

These valuations may be justified if Tesla is able to show operating profit margins similar to Ferrari or Porsche (in 15% to 20% range) consistently, once growth slows down and production stabilizes.

Last edited by SmartCat : 24th January 2020 at 21:45.
SmartCat is online now   (16) Thanks
Old 24th January 2020, 22:27   #3
Zed
BHPian
 
Zed's Avatar
 
Join Date: Aug 2011
Location: Germany
Posts: 516
Thanked: 487 Times
Re: Tesla tops Volkswagen to become 2nd-most-valuable car maker

Another example of an organisation with a charismatic and visible leader winning the confidence of investors. I was skeptic about Teslas ability to scale globally. But judging by what it has been able to achieve so far in select markets and its audacious expansion plans in China and Europe - I am more of a fence-sitter at this point in time. But there will be pressure on Tesla's global expansion plans - not just from the Toyotas & VWs of the world but potentially from regional players. Tata/Mahindra in India, the dime-a-dozen EV's in China, TOGG in Turkey are examples that spring to mind. Another factor to consider is the ownership model which I expect will move progressively to a shared\leased landscape in the next 5-8 years. OE's that recognise and adopters to this new paradigm of ownership are likely to reap long-term benefits.
Zed is offline   (1) Thanks
Old 25th January 2020, 00:08   #4
BHPian
 
GutsyGibbon's Avatar
 
Join Date: Mar 2008
Location: Southern Calif.
Posts: 751
Thanked: 4,518 Times
Re: Tesla tops Volkswagen to become 2nd-most-valuable car maker

Quote:
Originally Posted by SmartCat View Post
These valuations may be justified if Tesla is able to show operating profit margins similar to Ferrari or Porsche (in 15% to 20% range) consistently, once growth slows down and production stabilizes.
In my opinion, these evaluations mean that there is too much money chasing too few good ideas. Is Uber worth $62B? That is close to 2 times market cap of Ford. What do they really have? Sure they have bunch of customers looking for a deal, and whole bunch of drivers. Rest is all a well woven web of stories and vaporware. Truck loads of high risk ETFs and index funds who have bought in to these stories. (including our own 401k )

It all seems like a replay of 1999. Compared to all these companies with vaporware, Tesla has a lot going for it. It owns huge factories, a charging network and a loyal customer base. So, when the bubble bursts, there may be large corrections, the investment from the vaporware peddlers would be yanked, but I feel they will in turn invest in companies like Tesla.

Last edited by GutsyGibbon : 25th January 2020 at 00:30.
GutsyGibbon is offline   (18) Thanks
Old 25th January 2020, 10:40   #5
BHPian
 
Avenger_123's Avatar
 
Join Date: Jul 2015
Location: Dallas - Texas
Posts: 72
Thanked: 136 Times
Re: Tesla tops Volkswagen to become 2nd-most-valuable car maker

Valuations are all hyped up and sometimes doesn't make any sense. Future optimism with investors or just bubble time will only say. The US stock market is on a relentless bull run, all spiked by Trump presidential campaign for 2020 and in many cases stock buyback by corporations, driving prices further high.

Tesla's balance sheet has loads of debt and they are burning cash at a very high rate. Obviously Tesla is at least 10 years ahead of others in battery technology, I would be interested to see how Tesla Semi fares, and I think that is driving lot of optimism as well.

Here in the US I see a lot of Model 3s, with China Giga factory and the upcoming one in Germany am sure company can reacher greater heights, assuming they execute on the plan.

Obviously not as bad story as "We Work" hopefully !!
Avenger_123 is offline   (1) Thanks
Old 25th January 2020, 14:38   #6
Team-BHP Support
 
Join Date: Sep 2010
Location: All over!
Posts: 7,591
Thanked: 18,197 Times
Re: Tesla tops Volkswagen to become 2nd-most-valuable car maker

Had reported this earlier this month.

https://www.team-bhp.com/forum/inter...ml#post4728754 (Tesla worth as much as Ford and GM combined!)

But as smartcat mentioned, stock worth may not be the best indicator of company performance given the massive difference in scale between the two companies. Also, VW would have much deeper pockets than Tesla so that places them better to do investments, deal with changing customer demands and also, when things go wrong (eg. Dieselgate).

That said, there is no denying that charismatic Musk-led Tesla is a company that has changed the dynamics of the auto industry very significantly.
libranof1987 is offline   (1) Thanks
Old 25th January 2020, 14:54   #7
BANNED
 
Join Date: Dec 2012
Location: bangalore
Posts: 788
Thanked: 2,495 Times
Infractions: 0/1 (5)
Re: Tesla tops Volkswagen to become 2nd-most-valuable car maker

Tesla stock premium is mostly due to Elon musk and the stock rally is because Tesla record breaking Gigafactory 3 from its foundation laying in jan 19 and delivering chinese built model 3 to customers by dec 19.

Now they are in the process of building Gigafactory 4 in Germany.

Tesla cars are cool, hell even the cybertruck will probably outsell every other Non-Tesla electric 4 wheeler.
aim120 is offline  
Old 25th January 2020, 23:08   #8
BHPian
 
Furebo's Avatar
 
Join Date: Feb 2011
Location: -
Posts: 332
Thanked: 92 Times
Re: Tesla tops Volkswagen to become 2nd-most-valuable car maker

I just have one thing to say to the legacy automakers: wake up!

Tesla’s current technology has allows them a big lead, what will follow will move the industry entirely.

BMW has already fallen behind and this industry is already on the verge of a major shift.

Kudos to them for pushing ahead, competition will allow good things for us ahead.
Furebo is offline  
Old 27th January 2020, 11:51   #9
BHPian
 
Join Date: Dec 2012
Location: Bengaluru
Posts: 49
Thanked: 61 Times
Re: Tesla tops Volkswagen to become 2nd-most-valuable car maker

Stock price take into account all the potential future profits that a company will generate. So it seems that the stock market views Tesla's technology as a moat which would help it gain market share and have higher margins compared to the competitors. I don't see any other thing which can work in Tesla's favor in such a huge way (distribution, production efficiency, network, access to global markets, etc. all of which the traditional car companies are better at)
Hulk is offline  
Old 27th January 2020, 16:20   #10
BHPian
 
Join Date: Sep 2019
Location: Chennai
Posts: 74
Thanked: 97 Times
Re: Tesla tops Volkswagen to become 2nd-most-valuable car maker

Quote:
Originally Posted by SmartCat View Post
These valuations may be justified if Tesla is able to show operating profit margins similar to Ferrari or Porsche (in 15% to 20% range) consistently, once growth slows down and production stabilizes.
The argument is that Tesla is not an auto company. It's beyond that. A simple analogy is calling Amazon an online book store in 1999. The revenue stream for Tesla may include energy storage solution, automobile, software as a service, transport as a service, fuel dispensing system, power utility company (balance off peak load for power distribution), etc.

I am not saying all these are true. I am not invested in Tesla but invested in Alphabet which is reasonably valued imo.

Last edited by Vians : 27th January 2020 at 16:23.
Vians is offline   (3) Thanks
Old 27th January 2020, 22:03   #11
BHPian
 
Join Date: Feb 2012
Location: New York City
Posts: 169
Thanked: 631 Times
Re: Tesla tops Volkswagen to become 2nd-most-valuable car maker

I am an investor in Tesla based in NYC. My few thoughts on some of the excellent comments.

Quote:
Originally Posted by GutsyGibbon View Post
In my opinion, these evaluations mean that there is too much money chasing too few good ideas. Is Uber worth $62B? ...

... It all seems like a replay of 1999. Compared to all these companies with vaporware, Tesla has a lot going for it. It owns huge factories, a charging network and a loyal customer base. So, when the bubble bursts, there may be large corrections, the investment from the vaporware peddlers would be yanked, but I feel they will in turn invest in companies like Tesla.
The big difference between now and '99 is interest rates. A lot of cheap money available which is raising valuations. '99 was ~4.25%, now ~1.75%. As an investor, you'd not put your money in a bank or FD. That's part of the story. Further, makes it easier for these companies to survive if their business isn't generating cash. Low interest loans can keep the lights on for longer.

The other part, I feel, is the future potential to control giant share of the market. In this, I feel Tesla is better placed than Uber as it has some truly unique tech which the likes of Audi, Jag, VW, Mercedes are struggling to match. I speak of range, performance, charging speed and software.

Quote:
Originally Posted by SmartCat View Post
I have a bad feeling about this. But many short sellers have bet against Tesla stock only to lose their shirt, and now are on the verge of losing their pants.
Shorts have lost >$8 billion in the past 6 months. It's insane. If the upcoming earnings report (Jan 29) is positive, expect more pain for these investors.

Quote:
Originally Posted by Vians View Post
The argument is that Tesla is not an auto company. It's beyond that. A simple analogy is calling Amazon an online book store in 1999. The revenue stream for Tesla may include energy storage solution, automobile, software as a service, transport as a service, fuel dispensing system, power utility company (balance off peak load for power distribution), etc.

I am not saying all these are true. I am not invested in Tesla but invested in Alphabet which is reasonably valued imo.
These are largely true. Currently energy is ~8% of Tesla's revenue but it is showing signs of growing again. I've seen their powerwall system with solar. It's really well made and well integrated with their app. There are a fair few people driving a Tesla EV running on Tesla powerwall powered by Tesla solar. Kind of like how Apple hooked everyone during the past few years.
carmayogi is offline   (5) Thanks
Old 20th May 2020, 13:49   #12
BHPian
 
Join Date: Sep 2018
Location: Bangalore
Posts: 337
Thanked: 1,694 Times
Re: Tesla tops Volkswagen to become 2nd-most-valuable car maker

Tesla quietly adds bidirectional charging capability for game-changing new features

Quote:
In terms of practical features for owners, they could potentially power their house with their Tesla vehicle during a power outage or charge another electric vehicle with their own.

However, the real value of bidirectional capacity lies in grid services.

With the owners’ permission, Tesla could offer electric utilities the ability to access power from the vehicles on the network in other to offset electricity demand during peak hours.
Miyata is offline   (1) Thanks
Old 27th May 2020, 23:02   #13
BHPian
 
GutsyGibbon's Avatar
 
Join Date: Mar 2008
Location: Southern Calif.
Posts: 751
Thanked: 4,518 Times
Re: Tesla tops Volkswagen to become 2nd-most-valuable car maker

Prices have been cut across the board for all Tesla models, but for the Y. Model 3 Standard plus offers even more value now. It would be hard or impossible for the likes of BMW to sell their i3.

Last edited by GutsyGibbon : 27th May 2020 at 23:03.
GutsyGibbon is offline  
Old 13th December 2020, 19:00   #14
Senior - BHPian
 
Venkatesh's Avatar
 
Join Date: Feb 2020
Location: Hyderabad
Posts: 8,207
Thanked: 43,326 Times
Re: Tesla tops Volkswagen to become 2nd-most-valuable car maker

Elon Musk encourages workers to increase EV production as much as possible.

We are fortunate to have a high-class problem of demand being quite a bit higher than production this quarter.

To ensure that we have the best possible outcome and earn the trust of the customers and investors who have placed their faith and hard-earned money with us, we need to increase production for the remainder of this quarter as much as possible.

Quote:
The second reason is of course the intention to reach the target of 500,000 cars produced and sold in 2020, which requires a spectacular fourth quarter:

required production: 170,020
required deliveries: 181,020
Source
Venkatesh is offline   (1) Thanks
Old 27th December 2020, 09:29   #15
BHPian
 
altius's Avatar
 
Join Date: Nov 2009
Location: Chennai
Posts: 240
Thanked: 101 Times
Re: Tesla tops Volkswagen to become 2nd-most-valuable car maker

The current status w.r.t to market cap and revenue.
Attached Thumbnails
Tesla tops Volkswagen to become 2nd-most-valuable car maker-8bd78df3a88e42e0866340c7591f7782.jpeg  

altius is offline  
Reply

Most Viewed
Thread Tools Search this Thread
Search this Thread:

Advanced Search

Copyright ©2000 - 2024, Team-BHP.com
Proudly powered by E2E Networks