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Tesla Tops GM by Market Value as Investors See Musk as Future (bloomberg.com)
Tesla became the largest U.S. auto maker by market value on Monday, overtaking General Motors -- a feat that would have seemed highly improbable 13 years ago when the electric-car maker first began tinkering with the idea of making a sports car. From a report: Tesla climbed as much as 3.4 percent in early Monday trading, boosting its market capitalization to about $51 billion. The company was valued at about $1.7 billion more than GM as of 9:35 a.m. in New York. The turnabout shows the extent to which investors have bought into Musk's vision that electric vehicles will eventually rule the road. While GM has beat Tesla to market with a plug-in Chevrolet Bolt with a price and range similar to what Musk has promised for his Model 3 sedan coming later this year, the more than century-old company has failed to match the enthusiasm drummed up by its much smaller and rarely profitable U.S. peer. No matter, say investors who like the stock. Tesla is a technology player with the ability to dominate a market for electric cars and energy storage. To those same investors, GM and Ford are headed for a slowdown in car sales that will erode profits. "Is it fair? No, it isn't fair," Maryann Keller, an auto-industry consultant in Stamford, Connecticut, said of GM ceding the market-cap crown. "Even if Tesla turns a profit, they will eventually have to make enough to justify this valuation."
If you made money on it, good for you. The company is grossly overvalued. Get out while you can.
Nissan are in danger of missing the boat too. The Leaf is a great car and they have done a lot to get people driving EVs, especially in Europe. The problem is that circumstances have kind of screwed them - Tesla's Model 3 is looking unbeatable right now, so far ahead of anything anyone else can offer it's stunning. That big screen, full self driving if not from day one fairly early in its life, and best of all software updates in an age when most manufacturers can't keep the sat nav up to date.
On top of that they build the Leaf in the UK, and the UK plant's future is uncertain due to Brexit. It seems like they held back with the new model because of these things, hoping to release it with their ProPilot tech which isn't even as good as Telsa's auto-pilot was at release (doesn't work at low/high speeds, can't even change lanes by itself etc.)
Really sad because they could be a big player. They just need to get the next Leaf right but don't appear to have the tech to keep up with Tesla, and when the Model 3 comes along the ~40kWh car with old tech is not going to cut it at the 30k price point.
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SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
Tesla has cars on the road, it's not vaporware company. His other companies are also progressing with their goals too.
If you want to talk about something that took a lot of people's life savings and that was completely legal, let's talk about the fucking banks. Not only did they ruin people's lives but they also got more money for bailouts. Banks, the very place that's supposed to be about managing money, fucked everyone and got more money on top of that. I wonder why the people at the top didn't get the firing squad.
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>I wonder why the people at the top didn't get the firing squad.
because they are in control of the single american party.
134,500 Volts sold,
1,741 Bolts sold
2,958 ELR sold
Spark EV I could only find three year old numbers, at the time it was 2,958 sold.
25,000 model x sold
158,159 Model S sold
Tesla's *total* car sales do marginally outpace GMs electrified cars, but not overwhelmingly so. Also, GM sells a *lot* more cars than the electric vehicles. Note that in a year in the US alone, GM sells over 3 million cars, an order of magnitude more sales than Tesla has had in it's entire existence.
The valuation on Tesla is insane, just like all the 'unicorn' ones, investors obsessed with new and novel behaving irrationally. One could charitably say it's because of hyperloop and such, but I think that's pushing credibility far.
XML is like violence. If it doesn't solve the problem, use more.
Yeah the Stock is severely overpriced and, as much as I like Tesla, there's no way it's value can compare to GM and Ford at the moment. We all know that, and we all know this balloon will eventually deflate. So what?
Unless someone put a gun in your head and force you to buy Tesla stock and kept them no matter what happens, this is good news for everyone. It's a proof of confidence to an emerging car maker in North America (who would have thought this would be possible in the 2000s?). Also, it send a serious message to the GM/Ford and it make them better (Ford is back on track and it's Ford Fusion is, in my opinion, the best mid-size sedan in the market, and for GM is launching the best competitor to Tesla Model 3 with the Chevy Bolt).
This is better for the car industry and it's better for the environment.
Elok
Different people have different reasons for hating on Electric Vehicles. The Petrocar dealerships are threatened because a large part of their revenue stream is based on post-sales service. And the electric car is a hellava lot less prone to the little issues that hit petrocars.
Many Politicians hate Electric Vehicles because tax revenue from petro sales goes down, and those taxes are easier to hide while railing against other taxes. A lot of people have severe inertia issues. "If leaded gas was good enough for Grandpa, it's good enough for me." Anything new is anathema.
And some people are just plain nuts. How are we gonna go "coal rolling in an EV? https://en.wikipedia.org/wiki/... Where these insane idiots like to do this when they see an Electric vehicle or hybrid.
It is just going to take time for the normal people, and the actuarial tables for the lunatic fringe to die off - probably via black lung or COPD for the coal rollers - and EVs will take over just like Petrovehicles took over from the horse and buggy.
The shepherds did so well protecting the flock that the sheep no longer believed that wolves existed.
Yet Nissan sells more electric cars than Tesla and has been doing so for a while.
The Model 3 will have to be judged when it releases. Whether Tesla can really fare better than the traditional automakers when faced with having to support sales of 3 million or cars or more annually is *very* far away. It's much easier to do a lot of these things when you sell on the order of 50k vehicles a year compared to 3 million a year that the likes of GM and Nissan have to deal with.
XML is like violence. If it doesn't solve the problem, use more.
Tesla "worth" $51 billion? Pfft. Back in the dot bomb bubble days AOL was "worth" $224 billion, now it's under $5 billion. We'll see how Tesla holds up.
GM is viewed as pathetic because they had their own electric vehicle two decades ago and decided to crush them all despite people wanting to keep them. They had their chance to start the revolution but it got killed from within the company.
The fact that they're making electric vehicles again just seems pathetic and hypocritical.
However, I do wish them luck because electric vehicles or even hybrids are still a better option for most people.
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I'm trying to find the current backlog for Tesla cars and it seems to be somewhere north of 400k vehicles with close to a billion in deposits for the orders. Nobody else has that kind of traction (if you'll excuse the pun) for current, announced or planned vehicles - in comparison, in 2016 Mercedes sold 374k vehicles in the US.
Yes, the investors are taking a risk on Tesla, but isn't that part of the job description?
Along with this, there seems to be a significant demand for electric vehicles. I don't expect them to overtake fossil fueled vehicles any time soon, but at least 10% of buyers are seriously interested in EVs and Tesla is the number one name there with generally great reviews for products compared to the competition (ie the Leaf makes you feel like you're settling for less and the Volt/Bolt just don't have the cachet), the company is serious about renewables/reducing customers' carbon footprint and a rock star CEO.
You can say it's a fad stock, but there are some solid fundamentals there in terms of backlog and customer demand which justify a high stock price.
Maybe if the Model 3 turns out to be a lemon, things will change with regards to the stock, but as I said, part of the job description for an investor is to take risks and people seem to think that there will be a reward at the end of the day.
Mimetics Inc. Twitter
Large American car companies have been a cluster fuck since the 70s.
And yet people continue to buy their vehicles by the millions. I work in the industry and have for a lot of years. Fact is that the big US car companies are pretty well managed - they are at worst comparable to most of their competition. The problems they've had have mostly been legacy problems from back in the 80s and earlier when they didn't have as much competition. Primarily high labor and pension costs that they simply could not shed and that their competition was not subject to. US cars today are largely of good quality (with some exceptions) and all the US auto makers have managed to get their costs more competitive. FCA is still something of a mess but Ford and GM are pretty well managed and very profitable at the moment.
GM could have dominated this market starting with the EV1 years ago.
GM could have possible dominated the EV market but not with the EV1 and probably not its hypothetical successor either. They would have had to have a much longer investment horizon on EVs than was probably reasonable to expect. The EV1 was a nice enough little car if it happened to fit your needs but it was wildly impractical for most people (it was a two seater with very limited range) and hugely expensive to build. There was no way GM could have sold them profitably without huge government subsidies and it was never going to be a car with mass appeal. The battery pack in it only gave a range of 100 miles and the batteries on the last models were NiMh batteries with a capacity of 26.4kWh (a Tesla Model S has capacity 3-4X that amount). The EV1 routinely earns spots on worst car lists because it was a vehicle that relied on technology that just wasn't ready yet. EVs are only becoming practical now because of progress in battery technology.
Dealers don't want to sell electric cars. EV's do not have the constant revenue stream that Traditionl vehicles have.
That's only partly true. EVs all need tires, suspension, brakes (rarely). Plus there is steady collision work, though much of that is done by independent shops.
Dealers will solve the revenue problem once they figure out they are marketing a lifestyle, not just a car. Bring on the accessories.
The real problem for the dealers, and the major automakers, is that they have no idea how to break into new markets. They survive through repeat business and stealing each other's customers. They have faced a saturated market for decades.
Still, if enough customers show up in dealers asking for EVs, they will sell them. They will have no choice. This isn't happening today in anything but tiny numbers. I'd love to hear a single story of a dealer who converted a traditional car buyer to electric--I simply don't believe it happens.
(When I bought my Volt I laid a trap for my Chevy dealer. I didn't tell them what car I wanted, instead I described all the features of the Volt without mentioning the electric drivetrain. They never suggested it. Only when I asked "what about the Volt" did the salesman start talking about it.)
The valuation on Tesla is insane, just like all the 'unicorn' ones, investors obsessed with new and novel behaving irrationally.
Exactly.
Tesla's P/E ratio is... non-existent.
GM's P/E ratio is 5.7 and their dividend yield is 4.46%. GM's If investors had *any* sense, GM's P/E ratio would be 16, which would make it's market cap $141.6B, and Tesla's market cap would be around $10B.
Honestly, obsessing about market cap is *stupid*.
"I don't know, therefore Aliens" Wafflebox1
You wanna know why GM abandoned the EV1? They developed the EV1 because the California Air Resources Board (CARB) mandated that by 2000, a certain percentage of each auto manufacturer's sales had to be zero-emissions. If an automaker couldn't meet that requirement, either they'd have to buy credits from another automaker, or they'd be locked out of the lucrative California market.
GM built the EV1 (using a lead-acid battery). Ford and Chrysler bet on hydrogen fuel cells, which didn't pan out (still haven't). The Japanese automakers tinkered with EVs, but decided the technology was unfeasible at the time and focused instead on hybrids.
1999 came around and GM was the only company with a car which would meet CARB's emissions-free requirement the next year. GM had invested over a billion dollars developing the EV1, but they stood to make many times that in licensing fees from 2000 and on. Everything was looking rosy for them.
Then the whole thing collapsed. The other automakers convinced CARB that the zero-emissions requirement was technologically unfeasible with year 2000 technology. And that the best they could do at the time were hybrids, which used a battery to improve efficiency, but still got all their energy from the ICE. CARB agreed and rescinded the zero-emissions requirement, instead using a less-stringent low emissions vehicle and ultra-low emissions vehicle requirement (LEV and ULEV).
Basically, CARB pulled the rug out from under GM. They'd coerced GM into investing over a billion dollars in the technology, then on the eve of GM hitting paydirt, CARB changed the rules making it impossible for them to recoup their investment. This is why companies hate government regulations - because unlike real-world physics which remains constant, regulations change based on politicians' whims. You spend a billion dollars trying to comply with an upcoming regulation, then they suddenly change the regulation making all the money you spent irrelevant. CARB even had the unmitigated gall to ask GM to continue selling the EV1 after pulling this double-cross.
Do you understand now why GM recalled all the EV1s and had them destroyed? CARB was trying to get the benefits of the technology developed for the EV1, while denying GM the promised financial payout for developing the technology in the first place. GM wasn't playing that game. If they were going to take a billion dollar bath on the project, there was no way in hell they were going to let CARB derive any benefit from the whole shenanigan.
Tesla is no different. The only reason they made a profit for two quarters, and aren't even further in the red in the other quarters is because they're able to sell carbon credits to automakers who don't meet CARB's zero-emissions requirements. In other words, Tesla's "success" is an artificial regulatory construct. The only difference between Tesla and GM is that CARB stuck with the ZEV requirement this time. If they'd abandoned it at the last minute like they did with GM, you can bet the Musk would've given CARB the middle finger as well and abandoned Tesla.
Musk has sold investors on a vision. He now has to deliver profits. That's the problem for Tesla.
Umm no it does not. GM made NET profits of $9.8 Billion dollars in 2016. Tesla made $675 Million. So no their R&D budget did not expand. Tesla now have to deliver on profits or with will see their stock tank.
I've owned two Leafs. They are great cars, and you don't realize how great until you live with one. For example, the interior and instrument cluster layout is brilliant, and every other EV I've tried doesn't come close. Some look better, with fancy graphics and the like, but in terms of usability the Leaf is king.
The range is absolutely fine for most people most of the time. And most people have access to more than one car - via a partner or family member. Nissan will loan be an ICE for a couple of weeks if I need it anyway, but I never have. Even long trips have been no problem.
The M3 will be fully self driving in time, just like the Model S and X. Unless Tesla screw up spectacularly, any model bought with auto-pilot hardware will get a software update to enable fully autonomous driving.
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SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
Yet Nissan sells more electric cars than Tesla and has been doing so for a while.
No they don't. They sell more cars with an electric drive train somewhere in the chassis. The Leaf which is Nissans only all electric car with any kind of sales figures is the best selling EV in the world behind the Tesla Model S.
Which is saying something given the insane price and performance differences.
There are 5 year old Teslas out there. It appears you lose around 15% of the capacity after 150000 miles. It's not too bad compared to a regular car.
actually, in the world, the leaf IS the best selling EV. That is a fact. The interesting part is, that where Tesla sells (other than Japan), they outsell the leaf.
I prefer the "u" in honour as it seems to be missing these days.