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Transportation Businesses Power The Almighty Buck

No, Tesla Is NOT the Largest US Automaker Ever (cleantechnica.com) 145

Posted by BeauHD from the don't-get-too-excited dept.
An anonymous reader shares an excerpt from a CleanTechnica report: Over the last couple of days, as Tesla continues on this monstrous run, the media seems to have been noting that Tesla is now more valuable than any U.S. automaker's market cap ever. (Tesla is currently almost exactly the market cap of Ford and GM combined, around $88 billion.) Even though I would now plant myself firmly in the "bull" camp, this is completely untrue, and I think it paints a problematic picture of Tesla. Let's get right to it -- Tesla is not the most valuable U.S. automaker ever because Tesla's market cap does not have just Tesla automobiles in it.

Currently, especially to outsiders, Tesla's automobiles are the most visible aspect of its business. The problem is Tesla's business is so much more diverse and will affect so many other major industries in the future that calling Tesla an automaker is akin to saying that Google is the most valuable phone company. Sure, Google makes phones, but taking just that aspect of its business into account while ignoring the rest and then claiming it's the most valuable phone company is a mistake at best, and deceitful at worst. I sort of get it. GM doesn't produce HDTVs and Ford doesn't have a wing that runs theme parks or something, so a lot of "analysts" think of Tesla in a similar, narrow-minded way and think Tesla should only be valued based on its automobile business. Tesla's valuation includes its energy (solar and battery) division, autonomy business, and Supercharger network, which is "currently the only capable, nationwide electric vehicle 'refueling' standard," the report says. After you deduct the valuations of those divisions, Tesla becomes "a $30 billion automaker," which makes it "currently the smallest U.S.-based automaker."

In conclusion, CleanTechnica's Frugal Moogal writes: "My point is simply this -- if you're out there parading around the fact that Tesla is the most valuable U.S. automaker ever, you're missing the bigger point. The market is starting to value the rest of Tesla's business, and what I think we're seeing is the beginning of the largest vertically integrated energy and transportation company."
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No, Tesla Is NOT the Largest US Automaker Ever More

No, Tesla Is NOT the Largest US Automaker Ever

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  • Whining about Tesla doesn't change facts (Score:5, Insightful)

    by gavron ( 1300111 ) on Wednesday January 08, 2020 @07:50PM (#59601170)

    What a whiny little f'r.

    Tesla has the largest market capitalization. End of story. Making excuses for why this "doesn't count" cause you don't like thim is literally whining.

    E

    • That's like giving GMail all of Alphabet/GOOG's market cap credit. GM and Ford are nearly pure plays on cars, but Tesla has other lines of work.

      • I would hardly say that superchargers is another line of work.
        Look at revenue streams not just a few minor tack on items. I am not sure what their solar is worth but I would guess near nothing, also the grid storage is great but I doubt that there is much revenue in it. Stock prices go up based on various things, the fact that Tesla is high is mostly because it can suck in investors who are not interested in most stocks. I think if you were to look at the company v's revenue and assets v's debt you would b

        • the fact that Tesla is high is mostly because it can suck in investors who are not interested in most stocks.
          The stock price is not affected by investors but by people who already have stocks and trade them at the stock exchange.

          • The stock price is not affected by investors but by people who already have stocks and trade them at the stock exchange.

            So, investors don't own stocks, and don't trade them on exchanges? I'm not sure I understand your statement.

      • ...And what's wrong with that?

        If I have any reason to talk about an email vendor's size, it's probably because I'm talking about what they can afford to do. In Google's case, they have the market dominance and cashflow to drive new email standards, and GMail holds enough of their customer base that I can safely bet on GMail service being around for a while. That's in comparison to, say, ProtonMail, which holds a tiny market share, and could evaporate if their funding ever runs up short.

        Tesla's doesn't hold

    • Re:Whining about Tesla doesn't change facts (Score:4, Insightful)

      by ArchieBunker ( 132337 ) on Thursday January 09, 2020 @08:22AM (#59602504)

      These neck beards and their hate for Tesla seem contradictory. You'd think your average Linux nerd would be happy to drive a 100% electric car but instead its constant bitching and complaining.

      • You would think so, but that's the tenor of this whole site, about everything.
      • I think it's more that everybody that isn't a fanboy of Musk/Tesla wonders why they can seem to do no wrong. Musk is CONSTANTLY over-promising and under-delivering, and never makes a sustainable profit. Yet any time this is brought up, you are declared a 'Tesla-hater'. Some poor poster here (rightly) pointed out that Musk has never made a sustainable profit. He got modded down as a troll. Seriously.

  • Um no (Score:2, Informative)

    by 110010001000 ( 697113 )

    Tesla stock is sky high because it is being pumped before the 4th quarter and end of year numbers come out. They will again lose about a billion of dollars in profit on declining revenue.

    • Re:Um no (Score:4, Interesting)

      by saloomy ( 2817221 ) on Wednesday January 08, 2020 @08:27PM (#59601278)
      Tesla's revenue declined because they are producing cheaper variants now. The Model 3 is approaching supply / demand balance. Thats a good thing. cannibalization of your own product lines is a good thing. Just ask Apple. iPod owners didn't buy a Zune, or a Windows Phone. They bought an iPhone. Would-be Model S and X owners bought a model 3. They are ramping up production, and shipping more units than ever. The stock price is high because they exceeded expectation on unit shipments. They don't need to be profitable now either, since they are a growth stock. Investors would rather they spend income on new giga-factories, financing more vehicles, building out supercharging network, designing a chip capable of delivering FSD so they can recognize that revenue, and hiring the best software developers anywhere in the world. Guess what? Thats exactly what they are doing with their income. Dividends with TSLA are years off. Any savvy investor knows that.
    • If you're so certain of this, you should probably short the stock then. Here you are sitting on all of this free money and you're just blabbing it to everyone in earshot.

      Why do I get the feeling that you won't do any of this? So odd for a person to turn down guaranteed money like that. Unless— No, surely someone wouldn't post pure bullshit speculation on the internet and try to pass it off as having a clue!

      • Re: (Score:2)

        by dfghjk ( 711126 )

        Look who's talking.

      • Ford's P/E is about 7. GM's is about 6. Tesla's is about 500. That is nearly 25 TIMES the P/E of even perennial cash-cow Apple. You tell me which of the automaker's price is based purely on hype and fantasy. A P/E of 500? That is well beyond tulip territory and into the Heaven's Gate realm.
        • why not compare it to Amazon? Loss maker for years and years

          • False [vox.com] Amazon was consistently making profits just 5 years in; They didn't lose money for that long, and the amounts they usually lost were a few tens of millions per quarter, not hundreds of millions - or billions.

            Additionally, Amazon's P/E ratio is still an insane 80 - but that's 16% of TSLA.

            Lastly, Amazon's quarterly revenue is 2-3 times Tesla's current ANNUAL revenue; and Ford and GM's revenues are nearly 10 times that of Tesla.

            There is simply zero justification for a P/E of 500 for Tesla, other than s

        • Tesla is growing faster than Microsoft did, in its heydays! I am not saying this, Mark Spiegel the noted Tesla short said so in a quarterly report to his shareholders. He said it three years ago, saying such growth is impossible, and so he is shorting it. But come 2020, it is showing a compound annual growth rate of 56% over 6 years. Not on negligible volumes. It is shipping as many cars as Jaguar+Land Rover does, and is nipping at the heels of Volvo. Growing at 56%.
          • When you have small numbers, it's easy to look like you're growing "fast". Going from $100 to $200 is a 100% growth! That's better than Microsoft going from $100 billion to $120 billion, right? The fact is, since Tesla's IPO, Tesla has grown to around $20 billion in 8 years; Microsoft added $70 billion in 8 years. Microsoft's net INCOME is more than twice Tesla's REVENUE. And yes, Microsoft has a P/E of a still-high 30, but at least there is solid earnings, complete market domination (which Tesla does
        • Tesla WISHES they had a P/E of 500. As they have no profits, they actually have a negative P/E (currently -4.77).

    • Re: (Score:2)

      by darronb ( 217897 )

      Holy fuck. Q1 was a $700m loss, and you're saying they'll lose $1B on Q4?

      They just posted record deliveries and the average sale price is up. Gross margins are almost certainly up as well. How, exactly, did you come upon that $1B number?

      Saying the stock's in a bubble is one thing, but saying actual Q4 results will be worse than Q1?

  • It's honestly a little scary (Score:4, Interesting)

    by ZipprHead ( 106133 ) on Wednesday January 08, 2020 @08:05PM (#59601216) Homepage

    It's honestly a little scary how vertically integrated Tesla is. They now have a vast super charging network, and are now selling thousands of cars that are engineered to use this network. (Yes you can use other charging stations or just plug in at 120v, but they are much slower to charge)

    They make the solar panels, and batteries too. This would be akin to Exxon selling cars that are engineered for Exxon gas, and now Tesla is starting to make semi trucks.

    Each super charging station is essentially a money printing machine for Tesla. It's still a good time to buy Tesla.

    Full disclosure.... I am very long on Tesla stock

    • Hard to imagine the supercharger stations won't be opened up through anti-trust litigation at some point. But frankly they've been so far out in front getting this done, I think we should let them gouge for a few years first.
      • Hopefully they will be opened up, it should be a massive up take of revenue when more and more manufacturers cars can use their network and will also increase the sales of EVs

      • They open-sourced the plans as part of the first phase. You want to make your own? Do it. You want to make a compatible one or adapter? Nothing is stopping you. The the barrier to entry into the market is "the company has to do work", its hard to make a case for monopoly.

        Tesla saw the anti-trust lawsuit a mile away.

    • Re:It's honestly a little scary (Score:4, Informative)

      by TheGratefulNet ( 143330 ) on Wednesday January 08, 2020 @10:14PM (#59601546)

      superchargers are NOT profit center, they are cost centers.

      elon did this to make buying/owning the car easier and less stressful. he is on record saying it is not planned to be a profit center.

    • Re: (Score:2)

      by AmiMoJo ( 196126 )

      No excuse for not supporting CCS charging. European Teslas do because they legally have to.

    • Re: (Score:2)

      by tlhIngan ( 30335 )

      (Yes you can use other charging stations or just plug in at 120v, but they are much slower to charge)

      And that's where people seem to trip up about electric vehicles. Unless you are going on a road trip, you pretty much don't need fast chargers.

      Think about it - let's say you're at work, and your car will be there for the next 9 hours. It doesn't matter if your car charges up in 1 hour, 3 hours, or 8 hours - as long as it's charged by the time you leave, that's all you really care.

      Same like charging at home -

      • You can charge at home with a 60amp 240v circuit.

        • Re: (Score:2)

          by jbengt ( 874751 )
          60A, 240V/1Ph is more capacity in that one circuit than a lot of people have for the rest of the house. (My first house had a 100A, 120V main panel. The panel probably had two 120V phases and the capability to wire 208V, maybe 230V, single phase circuits, but the panel only had 120V/1Ph circuits.)

    • Re: (Score:2)

      by Dog-Cow ( 21281 )

      This would be akin to Exxon selling cars that are engineered for Exxon gas,

      It would be akin to Exxon selling cars that are engineered for Exxon gas stations.

    • Unless the electricity used/generated by Tesla is somehow proprietary, you're full of shit. You don't even know you can install a 60amp 240v socket in your home and get faster charges.

    • Re: (Score:2)

      by zmooc ( 33175 )

      It's not everywhere. Prime example is the Netherlands, where there are 40000 charging stations (note that that's about 1 station per square kilometer). 1200 of those are fast chargers and just 29 are owned by Tesla.

  • Only Tesla Auto is being priced by the market. (Score:5, Interesting)

    by 140Mandak262Jamuna ( 970587 ) on Wednesday January 08, 2020 @08:16PM (#59601242) Journal
    Tesla's market cap is bigger than Ford's market cap ever was. So it is bigger than the biggest American auto company ever was.

    Yes, it has an energy business, but it is still very small. And the Solar City acquisition is mired in controversy, lawsuits and it is not clear it is adding anything to the valuation. But Elon once said the energy business could be bigger than auto. But right now I am not sure it is being priced into the valuation by the market.

    The supercharger network is a loss leader. 90% of the electric miles will come from homes/hotels etc. And electric miles are four times cheaper than gas miles. So total revenue even when BEV market share reaches 100% is going to be 40 times smaller than the revenue of gas stations. So charging network is also not adding much to the valuation.

    Yes, it has a battery technology. But the Maxwell Technology acquisition has minuscule revenue and I am not sure they are valuing it by much.

    As far as the market is concerned it is only valuing the auto business. So in some sense it Tesla is the American auto maker with the highest valuation ever.

    • Re: (Score:3, Informative)

      by Nethemas the Great ( 909900 )
      None of it is relevant. Tesla's current stock price is the result of a short squeeze. People betting against Tesla, either got scared, or margin called and had to buy out their positions. As the short exodus continues the more and faster the price will climb until it finally burns out and crashes back to reality. This story plays out daily in the markets. This one just happens to be for a high profile company. Ironically, in looking at the charts for TSLA it appears a beautiful short opportunity is co
      • This is the last tweet from Ihors of S3 Partners about Tesla. https://twitter.com/ihors3/sta... [twitter.com]

        The shorted shares fell from 44 million on Jun 19 down to 25 million, and then slowly it is inching up to 27 million. Till last week all the run up was due to longs buying the stock, not because of shorts covering. He has not reported anything this week, so dont know if this week's rally is due to short covering.

        Every one is focusing on 27 million shares shorted. But Tesla has 5 billion in convertible bonds d

        • Market prices can have huge swings even on minimal volume. Bitcoin is a beautiful example of that. All it takes is a few silly (or intelligent, well placed) people to drive a price beyond the equity requirements of margin account and you'll force the hand of those traders. Also, happens every day. The thing to remember is that not everyone got in at the same price/time. Short volume has been spiking immensely since Jan 3rd. Amusingly, short interest has been relatively stable. This suggests that new
      • Posting to undo moderation.

    • Here's how things work. Name a Sport franchise's owner in the US. Chances are, you'll pick Jerral Jones or Robert Kraft or somebody Steinbrenner... three of the 7 most valuable US sporting teams, per Forbes [wikipedia.org] magazine.

      Now, name the CEO of a major automobile manufacturer. Ford's is who? ... without a Google. Yup, it's all about recognition, especially when you're raising capital from the bankers. Sure, the Cowboys are dismal in every other category, but your value is what people think it is, and Elon's dancing [youtube.com]

      • Markets can be irrational. Market can misjudge the value of a company. It is true for both Tesla and Ford. You can argue the market irrationality is benefiting Tesla more than it did to Ford etc.

        But, at the end of the day, collectively people bought Tesla shares for 492$, that works out to a market cap of 86 billion dollars. That is the single cold hard fact. Is it justified, is it irrational, is it personality driven, short squeeze driven, ... are all just speculation.

        • Markets can be irrational. Market can misjudge the value of a company. It is true for both Tesla and Ford. You can argue the market irrationality is benefiting Tesla more than it did to Ford etc.

          But, at the end of the day, collectively people bought Tesla shares for 492$, that works out to a market cap of 86 billion dollars. That is the single cold hard fact. Is it justified, is it irrational, is it personality driven, short squeeze driven, ... are all just speculation.

          Well then, it's a good thing speculation has never featured largely in the markets... oh, wait.

      • I can't name a single sport franchise. How does this matter?

    • Re: (Score:2)

      by AmiMoJo ( 196126 )

      How do you value their autonomy tech?

      If what Elon claims is true it's worth trillions. It's not true though, and it might be a massive liability when it fails to meet the promises made.

      At this point all Tesla valuations are wild guesses.

    • Tesla's market cap is bigger than Ford's market cap ever was. So it is bigger than the biggest American auto company ever was.

      No, it is not [marketwatch.com]. Ford's peak was at $124 billion in today's dollars. Tesla still has a way to go.

  • TFA missed that the same is true of, e.g. Ford (Score:5, Informative)

    by Ungrounded Lightning ( 62228 ) on Wednesday January 08, 2020 @08:25PM (#59601276) Journal

    Currently, especially to outsiders, Tesla's automobiles are the most visible aspect of its business. The problem is Tesla's business is so much more diverse ...

    But the same is true of the others. For instance: Ford.

    Ford, both under Henry and his successors, got into a lot of other stuff. Aircraft (such as the Ford Trimotor), airport instrumentation (radio direction finding), satellites, etc.

    Ford bought Philco and merged it into their aerospace division. That division alone built these products or parts of them:
            AGM-88 HARM (subcontractor)
            AIM-9 Sidewinder
            AN/AAS-38 (F/A-18 FLIR)
            Have Dash
            LGM-118 Peacekeeper (subcontractor)
            LGM-30 Minuteman (subcontractor)
            MGM-51 Shillelagh
            MIM-72 Chaparral
            Pave Knife
            Pave Tack
            UGM-73 Poseidon (subcontractor)
            Trident (missile) (subcontractor)
    along with Apollo Mission Control.

    Philco invented the high-speed surface-barrier transistor, the first transistor fast enough to replace vacuum tubes in computers, and also used it to produce the first all-transistor auto radio.

    All of The Big Three were major players in the Apollo lunar program, building rockets, components of the lander, etc.

    Then there were - and still are - military: Chrysler built both the Jeeps and, for decades, tanks. GM's Saginaw Steering Gear built a lot of M1 rifles for WW II (along with Rockola and IBM, all of which had industrial-scale machinery for drilling holes down steel rods). Artillery pieces, too.

    Ford built steel mills, power generation dams and equipment, electric railroads (not just the equipment, but the actual lines), ... Some of this was related to supporting the auto construction - but not totally.

    I could go on. What Musk is doing at Tesla is quite in line with what other US automakers have done.

    This stuff was largely done in divisions, not subsidiaries. (It's much easier to share facilities that are useful across diverse product lines if they're all under the same financial structure.) So including the not-so-automotive products in the market cap of Tesla is not just fair, but necessary, if you want an apples-to-apples comparison against the historic US automakers.

  • At its peak, General Motors Corporation was more diverse as a holding company than Telsa. GM owned Frigidaire (now owned by Electrolux), Electro-Motive locomotives, Hughes Electronics (now owned by EchoStar), Electronic Data Systems (EDS), trolley-traction companies (although to shut them down as a predator), and GMAC finance (now Ally Financial, a bank holding company).

  • BMW+Benz joint venture buys Tesla vehicles! (Score:4, Interesting)

    by 140Mandak262Jamuna ( 970587 ) on Wednesday January 08, 2020 @10:06PM (#59601540) Journal
    German report [handelsblatt.com] says BMW and Benz invested in a startup ride hailing App in Europe. This joint venture has placed orders for 50 Tesla cars, not BMW or Benz. If the wholly owned subsidiaries dont want to buy the products of the parent companies, it means something. May be this is what tipping off the market there is something special about Tesla.

    • Re: (Score:2, Interesting)

      by mikeebbbd ( 3690969 )

      What's special about Tesla vehicles? They're well-integrated EVs that have long enough (200-275 miles) range to do a day's work in taxi service (isn't that what ride-hailing is, really?). The BMW 330e would also be a nice EV taxi, but only has about 100 miles range - so you would need 2 of them to cover a day's shift even if limited to the middle of downtown. That alone makes the Tesla a better deal. Mercedes, for now, has no EVs and no plans to sell one; just mild hybrids. So if the new app wants to use EV

      • Mercedes makes the EQC, a 220 mile range electric SUV. The EQV (shuttle van) is up next in their pipeline for all electrics (2021 MY). Or did you mean passenger cars only?

        BMW has nothing with the range right now, but the iX3 is supposed to have 200+ miles range. Also an SUV though.

        Sam

        • Mercedes EQC, is heavily promoted by Daimler. But still it manages sell just 50 vehicles a month.

          This is a rushed product by Mercedes, they just took GLC, threw away the ICE power train and added a battery and two motors. But the structural rigidity provided by the engine and the transmission was gone. So they added internal braces roughly simulating the engine/tranny to bring it back. Then the weight balance was off. The suspension was not designed for 50-50 weight balance of EV. So they added another 15

  • Market Cap is highly volatile and not really the size of the company.
    But Tesla has a bigger Market Cap over other auto makers. Saying that they are not all cars is nitpicking. As many of their services pointed out are meant to support their car market. Solar cells to charge the car. Automation for better production.

  • Teslas primary business. Automobiles.

    First GM does more than make automobiles, they also make and sell engines, parts, electric car batteries, etc. Now, lets look at these other things tesla does that TFS mentioned.

    Tesla's valuation includes its
    energy (solar and - horizontal integration)
    battery) division, (vertical integration, they built it provide batteries for their cars)
    autonomy business, and (vertical integration)
    Supercharger network (vertical integration)

    All of Tesla's business sectors revolve around

  • "After you deduct the valuations of those divisions, Tesla becomes "a $30 billion automaker," which makes it "currently the smallest U.S.-based automaker." "

    Did you count the many bankruptcies and bailout the other companies had?
    People who bought their shares at 23$ sure don't care.

    • Re: (Score:2)

      by darronb ( 217897 )

      Going from $80B+ to $30B by removing things that don't contribute much value at all is so asinine it's obviously a troll.

  • "calling Tesla an automaker is akin to saying that Google is the most valuable phone company"

    So, we are supposed to discount the market cap of the non-automotive parts of Tesla, but completely ignore the fact that GM and Ford are conglomerates as well?

    "currently the smallest U.S.-based automaker"

    Fisker?

  • Ihors is back from vacation and the current short interest of Tesla today [twitter.com]

    Ihor Dusaniwsky

    $TSLA short int is $13.69bn ; 27.82mm shs shorted; 20.79% of float; 0.30% borrow fee. Shs shorted up +464k shs, +1.7%, over last 30 days as price rose +45% & up +132k shs,+0.5%, last week. Shorts down -$2.02bn in January mark-to-market losses after being down -$632mm yesterday.

    This 2 billion loss comes on top of 7.62 billion loss between 1/1/16 and 12/31/19. Word on the street is, Chinese investors are buying the stock following glowing reports of Shanghai factory and the cars being delivered. It is not a short squeeze. Yet.

    Most well run funds would have hedge trades already in the books to limit their down side risk. It is possible they have bought calls and convertible bonds to hedge and close their

  • "The market is starting to value the rest of Tesla's business, and what I think we're seeing is the beginning of the largest vertically integrated energy and transportation company."

    HA!

    John D. Rockefeller would like a word.

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