Tesla's Value Briefly Passes BMW On Road To Become The Most Valuable Automaker

When Tesla first passed Ford’s market cap, it was a big deal, but Ford trades low, and it’s not really a Tesla competitor in any way. The bigger news came later, when the electric automaker passed General Motors. Again, GM trades much lower than the Silicon Valley automaker, but the company is seen as substantially more successful than Ford, and has a Tesla competitor (two really) in the current market; the all-new Chevrolet Bolt, and the largely successful Chevrolet Volt.

The i3, BMW’s only all-electric vehicle, is no competition to Tesla in terms of sales or range. The company will have more options in the future, but it will be 2020 or later before that comes to fruition.

Tesla isn’t in the market to compete with the likes of Ford or GM (despite the fact that the Chevrolet Bolt has a range and price on par with that of the upcoming Model 3). Instead it gears its vehicles toward the luxury market. The upcoming Model 3 will sit alongside the legendary BMW 3 Series in terms of price, size, and dynamics.

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TheSteve - 6/13/2017 10:22:15 AM

+6 Boost

"Value" as measured by market capitalization (number of outstanding shares X current stock price), but not in terms of unit sales, revenue, or profit (by the way, Tesla bleeds red ink).

Market Capitalization: What stock buyers/traders *believe* a company is worth.

Accounting (assuming it's honest): What a company is ACTUALLY worth (e.g., assets minus liabilities, projected revenue minus expenses (profit), etc.)


We do indeed live in a time when lots of people focus on what they believe, and ignore the facts, or aren't even aware of them.

Example (paraphrased, but a reflection of an actual televised interview):
- Trump: The murder rate is the highest it's been in 50 years!
- Interviewer: Actually, the data shows it's nearly at the LOWEST it's been in 50 years.
- Trump: None of that matters. People believe *me*. Lots of important people say so.

vdiv - 6/13/2017 10:43:56 AM

-3 Boost

Maybe you can ask the people that "believe" in Tesla and drive one (or two, or three), have a SolarCity PV rooftop and a PowerWall battery pack why is that. Your comparison to Trump seems rather silly considering the list of his accomplishments and his trajectory.

JRobUSC - 6/13/2017 11:03:48 AM

+6 Boost

"Maybe you can ask the people that "believe" in Tesla and drive one (or two, or three), have a SolarCity PV rooftop and a PowerWall battery pack why is that. Your comparison to Trump seems rather silly considering the list of his accomplishments and his trajectory."

well, I'd be glad to ask them, but unfortunately there are only a handful of those people in the world to ask and I can't find any of them in person. Not that I'd need to -- every single one of them is magically on every message board vehemently defending anything and everything that Musk and Tesla do.

Anyway, sorry, but Tesla stock is ridiculously overvalued.

vdiv - 6/13/2017 11:41:30 AM

-1 Boost

Well, I am not sorry, though I am worried. Considering the odds and considering that it is the most shorted stock of all time there is an argument to be made that it is undervalued. Musk thinks it is ridiculously overvalued as well and he has a bit of stake in it.

At the end of the day the market decides.

TheSteve - 6/14/2017 11:25:41 AM

+1 Boost

We're living in very interesting times with respect to TSLA stock price. TSLA is at it's all-time high, AND it's the most shorted stock on the mark. This tells us lots of believers still believe TSLA will go up (and so the price gets bid up as more believers are willing to buy at an ever-higher price), **AND** lots of stock traders believe TSLA is going to collapse soon.

It's extremely difficult to time the market.

TheSteve - 6/15/2017 12:32:53 AM

+1 Boost

Just as an FYI, on June 13, 2017, Tesla's market capitalization exceeded GM's and Ford's! WOW!

There are folks who will argue that Tesla Motors truly is worth more, as a company, than GM or Ford. That's their belief (I don't agree with it).

In truth, TSLA stock value is worth whatever the highest bidder/lowest offer agree to pay to buy/sell the most recent block of shares that changed hands. Things that DON'T matter to these TSLA buyers are trivial matters, such as:
- Earnings per share
- Equity per share
- Historic profitability (or lack thereof)
- Current profitability (or lack thereof)
- Foreseeable future profitability (or lack thereof)
- Share dilution with each new share issuance
- Workforce efficiency (at their peak, at most optimistic Tesla employee levels: about 1/2 as efficient as the GM/Toyota venture, in the same plant, in their worst year, their first)
- Historical accuracy of forecasted sales, production, production ramp-up, etc. (or lack thereof)

JRobUSC - 6/13/2017 11:47:02 AM

+3 Boost

"considering that it is the most shorted stock of all time there is an argument to be made that it is undervalued."

sure, I suppose you could argue anything. I imagine the same people responsible for the dot com bubble and housing crisis would be the ones making that argument.

runninglogan1 - 6/13/2017 5:31:33 PM

+1 Boost

Tesla is up 5% today so its market cap is above BMW again - 61.7 billion to BMW's 55 billion.

Doesn't look like investors are scared to me.

SanJoseDriver - 6/14/2017 10:34:07 PM

+1 Boost

I posted this somewhere else on AS, but if Waymo is really valued at $70B then Tesla's current valuation may not be too far off. The first company to become UBER with no drivers will dominate the market. Google (Waymo) have the advantage right now in tech, but they are not going to manufacture their own cars and their system is 4x more expensive to build than Tesla's.

Either way, if you believe Tesla will go bankrupt you should short it. If you believe they will succeed, then wait until there is a dip and buy in.

There are still 2 huge events this year that will play a huge role in the stock:
1.) Model 3 launch
2.) Semi unveil (late Sep) - I think this will actually be not one, but 2 different products, The Semi and a special trailer.