Bottom line: Tesla has no actual product to justify the stock's sky high price.
GM, Ford, Toyota etc. all have a price to earning ratio (P/E) of less than 10.
Tesla has a P/E of 120.
But, but, but --- Tesla is more than just an auto manufacturer. Again, there is little in the way of actual product to justify this viewpoint. 90 percent of their income is from autos.
But, but, but --- Tesla is a "growth stock" with huge future potential. Again, the actual data shows otherwise. Sales in 2024 actually declined.
The only reason Tesla has a P/E of 120 is because the so called "smart money" (aka institutional investors) remain bought into Musk's fantasy in a big way.
Musk's best skill is con artistry and Wall Street is one of his biggest marks.
The best way to justify that high p/e would be for them to use it to buy out the competition.
It costs Tesla ~<6% of market cap (780b) to acquire Ford (40b) or GM (44b) (with a friendly ftc); so for 15% of their shares, that could become the only "American" manufacturer - then they'd probably strip those 2 for parts, end the dealer model, bust the unions, maybe keep a few of the popular models.
Some of this might be inevitable anyway, as autos become more expensive (tariffs, inflation, chips, unions), and more reliable (dealer maintenance model, fewer sales)
I don't know much about A&Ms or frankly business, but it seems kinda strange that this hasn't happened yet. We got the Stellantis Car borg before the Tesla car borg.
I believe this too, but I’m also pretty nervous about trying to cash in my beliefs by selling it short or buying put options. The old adage “the market can remain irrational longer than you can remain solvent” still holds true.
Those institutional investors deserve to lose every penny if they truly believe AI and robotics are going to justify that valuation. Musk and the investors are just keeping up appearances to avoid losing their money. And he appears to be out of ideas for futuristic projects, judging by his recent, overly generic promise of “abundance”.
But, but, but --- AI and robotics. Again, Telsa has no real product to show that they can do AI and robotics any better than they do autos. It's pure wishful thinking at this point.
But, but, but --- robotaxis. Ditto --- same as above.
The really ominous "death cross" signal for Tesla --- their sales are declining (down 9% last quarter in the US) while EV sales overall continue to grow at a robust pace (up 11% last quarter in the US).
In other words, the competition is eating Tesla's lunch. But for some less than obvious reason, Wall Street continues to favor fantasy over facts.
The legacy automakers have been stagnant innovation-wise for a long, long time.
Tesla builds their own equipment to build the cars, which gives them an advantage in design flexibility. They could (or could have) conceivably eat(en) the market share of many of the legacy automakers before they could possibly catch up. I feel like most of the valuation is and was speculation in that direction. It’s not the existing auto makers to compare them to, it’s the entire auto market.
Unfortunately Elon can’t stay focused and thinks he can solve every major problem in parallel himself.
I hope the board can at some point realize that he needs to take a break from Tesla, and later come back if and when he can focus.
90% of their income isn't DIRECT auto sales though. Q4 2024 30% of that 'auto income' is selling credits.
In Q4 2024, Tesla recorded a $600 million gain from revaluing its Bitcoin holdings
In Q4 2024 alone, Tesla earned $692 million from selling regulatory credits or carbon credits, accounting for nearly 30% of its quarterly net income of $2.33 billion. Tesla better hope Trump doesn't move away from 'environmental credits' rules. Probably won't happen, Trump seems pretty green focused.
Does Toyota, GM, Ford have an FSD that’s just as good?
Bad question --- Tesla doesn't actually have FSD. What they actually have is Level 2 automation that requires constant supervision just like the others.
Do they have charging stations all over the country?
Yes, they do. They are all adapting to use Tesla chargers.
Tesla gutted their charging station team, then tried (or made public appearances of trying) to reverse their action. Doesn't sound like corporate thinks charging stations are a strength.
I'm disappointment how unrigorous that lawsuit is. Their argument basically relies on the fact there's a patent filing that vaguely mentions this, and that the odometer sped up even though the plaintiff's driving habits haven't changed. Those are certainly reasons to be suspicious, but aren't exactly smoking guns. Plenty of things are patented but aren't implemented in reality, and we only have the plaintiff's word that there's no other change in driving behavior that could have accounted for the extra mileage. If they're spending all this time drafting a legal complaint, surely they can do a carefully controlled empirical test?
The lawsuit has low chances of succeeding but not on the merits. It exposes a regulatory gray area, both in the US and in the EU. Existing laws focus on tampering, not manufacturer accuracy.
"...Besides the disappointing result in the range test, the Tesla Model 3 had quite an unusual issue–its onboard trip meter was way off and essentially lied about the distance covered...." - https://insideevs.com/news/747548/ev-winter-range-test-norwa...
There will be no 'Volkswagen' tesla, the model Y is going the way of the GT-R, and Tesla's other ideas are vaporware. Lidar is a superior approach. Refusing to use it, while claiming superiority, reminds me of how a child copes with losing at their favorite video game.
It doesn't need to be superior, it just needs to be good enough. It's something that has been proven in many technology battles. FSD has made an amazing progress over the last two years. If they solve last 1% of cases they will be in good position to beat Waymo on price as they scale. With ride sharing price is everything. People just go for cheapest rides. That's why cybercab is two-seater, they are trying to minimize cost per mile. Smaller car means cheaper car and less energy per mile.
I agree on your point about good enough. I don't see how they defeat foggy weather and the like with cameras alone however, so I'm wondering if they will ever get that last 1% as things stand. I think they need more sensors to stand a chance at that.
I don't think people think through to the end enough. Lidar can't be tricked as easily. If Tesla were to attract a group of malicious actors that hated Tesla I wouldn't put it past those actors to figure out ways to confuse Tesla's non-lidar self driving to make it frustrating to Tesla owners but more specifically to cause financial impact on a self driving taxi fleet that wouldn't be possible with Lidar.
Has Tesla accounted for malicious actors trying to sabotage it's vision choice and not just plain jane driving scenarios?
I think at scale and once rolled out malicious actors are going to be one of the number one economic impacts of self driving taxi economics.
> doesn't need to be superior, it just needs to be good enough
And not hated. I’m personally pressing for heightened street legality requirements for cameras-only self driving in California, New York, Canada and the EU.
They're actively hiring teams to diversify away from the CATL dependency.
They've starting hiring teams in India [0] and Malaysia [1] to work with alternative LFP suppliers.
It's most likely Agratas in India (they manufacture the batteries used in Tata and JLR's EVs) and EVE Energy in Malaysia (they began an expansion outside Chin due to EU and US tariffs).
Yep. Everybody with a brain knows that. The richest man on the planet is a tech con man.
And yet, this post will get flagged and downvoted into oblivion.
How did we get there ?
As for those downvoting - nope, I'm not hating for him or anything like that. It's just that I like to tell my kids that good guys can win. And Elon is not that.
I was willing to forgive Elon some of his eccentricities.
Until he repeated, more than once, obviously egregious untruths of Trump's.
I will admit I was late to the realisation.
Elon will say whatever he feels will progress his agenda, no matter how far disconnected from reality. He's jumped the shark and is doing far more harm than good. He needs to shrink into obscurity for his own, and the rest of the world's, good.
Tesla doesn't really advertise and instead let Elon be it's face to the world. It doesn't make sense to separate the two when the company itself wants you to see them as one.
Readit News
GM, Ford, Toyota etc. all have a price to earning ratio (P/E) of less than 10.
Tesla has a P/E of 120.
But, but, but --- Tesla is more than just an auto manufacturer. Again, there is little in the way of actual product to justify this viewpoint. 90 percent of their income is from autos.
But, but, but --- Tesla is a "growth stock" with huge future potential. Again, the actual data shows otherwise. Sales in 2024 actually declined.
The only reason Tesla has a P/E of 120 is because the so called "smart money" (aka institutional investors) remain bought into Musk's fantasy in a big way.
Musk's best skill is con artistry and Wall Street is one of his biggest marks.
It costs Tesla ~<6% of market cap (780b) to acquire Ford (40b) or GM (44b) (with a friendly ftc); so for 15% of their shares, that could become the only "American" manufacturer - then they'd probably strip those 2 for parts, end the dealer model, bust the unions, maybe keep a few of the popular models.
Some of this might be inevitable anyway, as autos become more expensive (tariffs, inflation, chips, unions), and more reliable (dealer maintenance model, fewer sales)
If the US hadn't bailed out Big Auto then maybe someone like Tesla would have been able to pick up the usable parts for pennies on the dollar.
But as things stand today, why would Tesla want Big Auto's problems?
I'm not sure he could do that even if he wanted to. Tesla stock is being used as collateral for some of his other adventures --- like Twitter/X.
And this is before all the politics and crash in sales due to Elon's antics.
But, but, but --- robotaxis. Ditto --- same as above.
The really ominous "death cross" signal for Tesla --- their sales are declining (down 9% last quarter in the US) while EV sales overall continue to grow at a robust pace (up 11% last quarter in the US).
In other words, the competition is eating Tesla's lunch. But for some less than obvious reason, Wall Street continues to favor fantasy over facts.
https://www.businessinsider.com/tesla-sales-slump-automakers...
The legacy automakers have been stagnant innovation-wise for a long, long time.
Tesla builds their own equipment to build the cars, which gives them an advantage in design flexibility. They could (or could have) conceivably eat(en) the market share of many of the legacy automakers before they could possibly catch up. I feel like most of the valuation is and was speculation in that direction. It’s not the existing auto makers to compare them to, it’s the entire auto market.
Unfortunately Elon can’t stay focused and thinks he can solve every major problem in parallel himself.
I hope the board can at some point realize that he needs to take a break from Tesla, and later come back if and when he can focus.
[1] https://www.theinformation.com/articles/electric-inside-tesl...
In Q4 2024, Tesla recorded a $600 million gain from revaluing its Bitcoin holdings
In Q4 2024 alone, Tesla earned $692 million from selling regulatory credits or carbon credits, accounting for nearly 30% of its quarterly net income of $2.33 billion. Tesla better hope Trump doesn't move away from 'environmental credits' rules. Probably won't happen, Trump seems pretty green focused.
https://carboncredits.com/teslas-carbon-credit-revenue-soars...
I’ll wait.
They don’t?
Do they have charging stations all over the country?
I’ll wait.
They don’t?
FSD, charging stations, and the upcoming CyberCabs are Tesla’s moat, hence the stonk price.
Bad question --- Tesla doesn't actually have FSD. What they actually have is Level 2 automation that requires constant supervision just like the others.
Do they have charging stations all over the country?
Yes, they do. They are all adapting to use Tesla chargers.
https://www.motortrend.com/features/tesla-nacs-charging-port...
FSD, charging stations, and the upcoming CyberCabs are Tesla’s moat, hence the stonk price.
FSD is fake news, charging stations are now open and Cybercabs are pure wishful thinking.
In other words, Tesla has no real moat --- and market data shows it.
https://www.kbb.com/car-news/report-tesla-rehiring-laid-off-...
"Tesla speeds up odometers to avoid warranty repairs, US lawsuit claims" - https://news.ycombinator.com/item?id=43723865
"Tesla odometer mileage vs actual miles discrepancy" - https://www.reddit.com/r/ModelY/comments/106m2dz/tesla_odome...
"...Besides the disappointing result in the range test, the Tesla Model 3 had quite an unusual issue–its onboard trip meter was way off and essentially lied about the distance covered...." - https://insideevs.com/news/747548/ev-winter-range-test-norwa...
https://news.ycombinator.com/item?id=43736091
Has Tesla accounted for malicious actors trying to sabotage it's vision choice and not just plain jane driving scenarios?
I think at scale and once rolled out malicious actors are going to be one of the number one economic impacts of self driving taxi economics.
And not hated. I’m personally pressing for heightened street legality requirements for cameras-only self driving in California, New York, Canada and the EU.
They've starting hiring teams in India [0] and Malaysia [1] to work with alternative LFP suppliers.
It's most likely Agratas in India (they manufacture the batteries used in Tata and JLR's EVs) and EVE Energy in Malaysia (they began an expansion outside Chin due to EU and US tariffs).
[0] - https://hire-r1.mokahr.com/su/lsfouz
[1] - https://hire-r1.mokahr.com/su/avoumb
It's nowhere even close to solving it, and it's also no longer even the best at trying.
Elon Musk is a pathological liar.
And yet, this post will get flagged and downvoted into oblivion.
How did we get there ?
As for those downvoting - nope, I'm not hating for him or anything like that. It's just that I like to tell my kids that good guys can win. And Elon is not that.
Until he repeated, more than once, obviously egregious untruths of Trump's.
I will admit I was late to the realisation.
Elon will say whatever he feels will progress his agenda, no matter how far disconnected from reality. He's jumped the shark and is doing far more harm than good. He needs to shrink into obscurity for his own, and the rest of the world's, good.
Dead Comment
That's just one model and other makers are selling more cars (ad they have more models).
In what way?
[1] https://www.autoweek.com/news/industry-news/a44600661/is-tes...