murraypaul
Tesla as a company can be successful while Tesla as an investment is not.
From a quick google the current P/E is around 400?
Continuing at current rates, or slowing increasing production, doesn't justify that P/E ratio.
They are priced as a tech company, but are not delivering the tech, eventually they have to, or risk someone else getting there first.
I guess it depends whether you think the bear case is share price falls by 50%, or share price just sort of drifts sideways then slowly down.
The former (collapse) seems very unlikely, major regulatory interference, Musk doing something even more outrageous than normal, or admitting that they can't deliver FSD as originally promised?
The latter (drift) does seem possible, if their market share keeps falling, and existing manufacturers successfully transition to EV.
Ultimately, if they can actually deliver true full self driving, they are worth almost whatever price you want. If they can't, they should be priced as a car company, not a tech company.
Can they? How many years is it now, and they still have a really really clever cruise control system, but nothing even close to level 5 self driving.
I think it is a reasonable bet that none of the original set of FSD buyers will ever have a true working FSD system delivered for those vehicles.
IMO: Good cars, promising but not yet working tech, poor customer relations, terrible corporate management, very risky investment.
p/e means nothing with out considering the growth rate.
If nothing else happens and we see the projected Giga Shanghai production of 450,000 next year
https://cleantechnica.com/2021/08/09/te ... 0000-year/that is about what the whole oc Tesla did last year. We also have Austin and Berlin approaching, so growth rate is large, margins are good and the competition from legacy is pitiful. See e.g.:
https://youtu.be/sowMCGZHPoEThe technology developed for labelling the AI driving is valuable as is the research/production, on the Tesla Bot. No other car company is anywhere near close, nor is any competing charging infra structure comparable and as reliable as super chargers. Add just some of these things and Tesla should trade on a much higher p/e/growth rate than any legacy auto.
As things now stand BMW's balance sheet is ugly, Honda and Toyota are not committing to BEV and run the risk of having their whole output of ICE made unsellable by politicians as will shortly happen in Norway. Of all legacy only VW is paying lip-service to making BEV. GM who has sold a lot of Bolts is now telling owners to park at least 50 ft from anything combustible, making the cars essentially unusable even in the wide open space of the US.
The media are full of stories of bad Tesla service, but their cars keep on selling and the owners love them. GM bolt owners may have loved their cars but spontaneous conflagrations are not helping their marketing or customer loyalty. One might imagine that the NTSA might compel GM to buy back all bolts or fix them and the latter is currently beyond GM.
Meanwhile there is a huge wave of Chinese BEV about to land in Europe and the US, often priced at very low levels and such is the potential of these that all the disasters of the GM bolt look like they will be forgiven by the analysts due to equity that GM owns in new Chinese makers.
If FSD does work the whole market will become bifurcated between the robots and everyone else. Even if it doesn't Tesla is sufficiently strong that it is killing the competition in its addressed markets which are growing as more giga plants come on line and the news on the 4680 production yields is beginning to look very encouraging which if so will give Tesla another edge.
There are various competing battery technologies but all, as far as I know, are very low production, more lab scale and will take time to commercialise in volume and then likely bought by Tesla.
Even if you find p/e/growth a useful concept one can argue that Tesla is way too cheap at present levels. We should also note that Tesla has a strong balance sheet and has had no difficulty raising capital, something that all legacy auto can not say or do.
Regards,