Sell Tesla?

ToneControl

As I mentioned a long time ago, the high share prices of Tesla valued the company as worth more than IIRC the 5 largest car companies in the world, combined (i.e. the market expecting Tesla to sell 50%+ of the world's cars). Even though they had sold very few cars.

Anyway, news today is:
https://www.ft.com/content/716c9b0b-d8cd-491a-a91b-d70c1e540797

Tesla overtaken by China’s BYD as world’s biggest EV maker

RaymondLin

They probably make it with smaller panel gaps too  

ToneControl

https://www.globaldata.com/companies/top-companies-by-sector/automotive/global-oems-by-market-cap/#:~:text=Collectively, the top 10 global,with $50,226 million market cap.

ToneControl

another piece on car making here today:

China’s electric vehicle dominance presents a dilemma to the west (ft.com)

ArchtopDave

ToneControl said:

Tesla overtaken by China’s BYD.

Jeremy Clarkson might well reason  "BETTER ACCELERATION and ROAD HOLDING". 

RandallFlagg

It seems like Elon Musk is the biggest handicap for his businesses and share prices. He seems to be coming unhinged.

Despite Tesla's huge equity capital driven growth and expansion with some industry leading technology, his erratic behaviour as seen with the whole Twitter/X furore there's just no telling what he might do or say next and the impact it may have on his businesses.

With the “greenlash” sentiment that has risen, and the added EV competition. I wouldn't bet on Tesla's medium to long term future personally. So, back to the original OP question from 2020, sell Tesla? Yes, I would do, now, if I held the stock, which I don't (outside of an index fund)

ALR

I sold all mine at an approximate 30% loss and used the money to buy a Ducati Multistrada instead. Only after did someone point out the irony, but I just felt I’d get more enjoyment from the bike than the anxiety every time Elon opened his trap.

I’ve kept my investment in various other stocks, but to me TSLA was just gambling.

Reverend

https://www.bbc.co.uk/news/business-68150306 seems like his pay was slightly over market value

CavemanGrogg

ALR said:

I sold all mine at an approximate 30% loss and used the money to buy a Ducati Multistrada instead. Only after did someone point out the irony, but I just felt I’d get more enjoyment from the bike than the anxiety every time Elon opened his trap.

I’ve kept my investment in various other stocks, but to me TSLA was just gambling.

I've never understood the attraction to Tesla as an investment, and still to this day question why their shares get so much column inches in the press and such attention from the public.  To me they are a mass accepted ''GameStop'' just waiting to happen, only on a slower, and much much larger scale, as in the share price has been vastly over inflated by ''the little guy'' due to it being a ''fashionable'' almost must have investment to have in everybodies portfolio.  Even somebody like me, who does not invest in Tesla - I manage all my investments myself so I know for a fact that I have no investment in Tesla, is constantly bombarded, through the investment platforms that I use no less, with ''news'' about their shares and company.

ToneControl said:

As I mentioned a long time ago, the high share prices of Tesla valued the company as worth more than IIRC the 5 largest car companies in the world, combined (i.e. the market expecting Tesla to sell 50%+ of the world's cars). Even though they had sold very few cars.

Anyway, news today is:
https://www.ft.com/content/716c9b0b-d8cd-491a-a91b-d70c1e540797

Tesla overtaken by China’s BYD as world’s biggest EV maker

I don't know if you noticed it.  In the news very recently, the CEO of Toyota, the car manufacturer who has just made a huge breakthrough in solid state batteries and plans to have all of their EVs powered by them before 2030, said in a interview that he believe EVs are stopgap technology, that he and Toyota don't expect EVs to ever make up more than 30% of the market, due to the nature of how they are ''refueled'' - not just charge time also the feasibility of access to charges and various other factors, it's really worth looking for the interview and the press around it.  It seemed a very strange thing for the CEO of a company that has just made a game changing breakthrough in EV technology to say, however if you read/hear what he said, he makes some extremely compelling and interesting points.

goldtop

Reverend said:

https://www.bbc.co.uk/news/business-68150306 seems like his pay was slightly over market value

Link is broken due to the forum's weird URL-parsing. Should be at: https://www.bbc.co.uk/news/business-68150306

(hope that works)

Yup - basically, the judge decided that Musk is controlling the board that awarded him crazy-high pay. And a shareholder brought a case and won. Chalk one up for the little guy. For now...

euan

Ohh that’s an interesting decision. I wonder if the SolarCity lawsuit will make the same conclusion 

ToneControl

Was Toyota’s bet on hybrid cars right all along? (ft.com)

Investors have already rewarded Toyota, sending its shares up more than 80 per cent over the past 12 months. Shares in Tesla, whose focus on a small number of BEV models is a sharp contrast to Toyota’s strategy of selling cars across multiple price points and technologies, have fallen over 5 per cent in the same period.

Reverend

https://www.bbc.co.uk/news/technology-68818113
will this mean shares go up or down?

strtdv

Market says down initially. You can argue it'll reduce costs in the long run but I think investors will see it as a company that's worried about itself.

ToneControl

strtdv said:

Market says down initially. You can argue it'll reduce costs in the long run but I think investors will see it as a company that's worried about itself.

in most US companies, firing 10% of the workers is a common tactic to drive up the share price

However, for Tesla, I think it damages the "Emperor's new clothes" fantasy underlying the ludicrously high expectations and share price valuation

RandallFlagg

Tesla are very much still in the early growth phase of their business having geared up production facilities globally very quickly that now face a decline in EV sales and softening of green transition convictions. Those production facilities will be expensive to run and sales are needed to continue to increase not flatline or decrease. Not a comfortable place to be for Tesla and it could unravel. 

Apple's business model of sub-contracting production to 3rd parties allows it to flex with demand swings, Tesla not so much.

ToneControl

As I've said before, I think the Tesla share price is ludicrously high

Largest automakers by market capitalization (companiesmarketcap.com)

Tesla is ~$500b
Toyota is ~$330b

other than that, most big car firms are around $50b - $70b

GM and Ford are both under $50b



Tesla passed the 4m cars sold (ever) threshold last year

Toyota sell ~10m per year
VW ~9m

Most of the other big firms sell over 4m per year

Top 15 Automakers in the World | Car Sales Rank Worldwide (factorywarrantylist.com)

I think Tesla would have to be selling 5m-10m per year by now for this to have a happy ending for investors.
Surely that ship has sailed, there are many other makers selling EVs now.

Tesla sold ~1.8m last year

BYD sold 50% more
BMW sold 2.5m, many others close behind.

Reverend

ToneControl said:

strtdv said:

Market says down initially. You can argue it'll reduce costs in the long run but I think investors will see it as a company that's worried about itself.

in most US companies, firing 10% of the workers is a common tactic to drive up the share price

However, for Tesla, I think it damages the "Emperor's new clothes" fantasy underlying the ludicrously high expectations and share price valuation

I've seen one news outlet describe it as a bloodbath. 

stickyfiddle

ToneControl said:

As I've said before, I think the Tesla share price is ludicrously high

Largest automakers by market capitalization (companiesmarketcap.com)

Tesla is ~$500b
Toyota is ~$330b

other than that, most big car firms are around $50b - $70b

GM and Ford are both under $50b



Tesla passed the 4m cars sold (ever) threshold last year

Toyota sell ~10m per year
VW ~9m

Most of the other big firms sell over 4m per year

Top 15 Automakers in the World | Car Sales Rank Worldwide (factorywarrantylist.com)

I think Tesla would have to be selling 5m-10m per year by now for this to have a happy ending for investors.
Surely that ship has sailed, there are many other makers selling EVs now.

Tesla sold ~1.8m last year

BYD sold 50% more
BMW sold 500k, many others close behind.

I mean.... company valuation has little to do with revenue and everything to do with expectations of future profit. Selling 4m cars and making 10k each is much better than selling 10m cars and making 1k profit on each, assuming all else is equal. I don't know how much profit they're making. 

Which isn't to say Tesla isn't hilariously overvalued because there's no way their margins are anything like that big.

CavemanGrogg

I've always been of the opinion that Tesla is a vastly over inflated and over valued company, more so now than ever that Chinese designed and manufactured are entering the EV market for a fraction of the cost of a Tesla, with as much if not better quality control.  Tesla have been allowed to get away with murder when it comes to quality control and finishing - the gaps between the body panels are legendary.