Author Topic: Tesla worth more than Ford  (Read 915 times)

0 Members and 1 Guest are viewing this topic.

Online Desert Fox

  • Poster of Extraordinary Magnitude
  • **********
  • Posts: 13907
  • Hopeful Non-Theist
    • Kitsune's Web Page
Tesla worth more than Ford
« on: April 03, 2017, 10:24:08 PM »
Second only to GM now in the United States.

http://money.cnn.com/2017/04/03/investing/tesla-ford-market-value-gm/

Move over, Ford. Tesla is now the second most valuable car company in America.

Tesla's stock surged nearly 6% on Monday to an all-time high after the maker of electric cars reported strong sales of its Model S and Model X vehicles. Ford's shares sank 3% following a weak sales report for March.

As a result, Ford's (F) market value is about $45 billion, while Tesla's (TSLA) has climbed to almost $48 billion.

Tesla also inched closer to GM (GM), whose stock fell 4% after it reported both a sales increase that was well below forecasts and higher inventories. GM's market value is $50.8 billion. And Tesla is inching closer to Japan's Honda (HMC). It's worth about $54 billion.

Shares of GM and Ford are now both lower for the year, while Tesla's stock has soared more than 35%.
"Give me the storm and tempest of thought and action, rather than the dead calm of ignorance and faith. Banish me from Eden when you will; but first let me eat of the fruit of the tree of knowledge."
— Robert G. Ingersoll

Online NEKSkeptic

  • Off to a Start
  • *
  • Posts: 95
Re: Tesla worth more than Ford
« Reply #1 on: April 04, 2017, 08:42:39 AM »
The major manufacturers are not embracing electric vehicles.  They are making token electric cars, but they do not see electric as being the future.  Until battery technology improves, I can see their concern.  I just don't see a majority of the population going electric until ranges are much better.  I live in a cold climate, and in the winter range is even worse - especially if you want heat.  The reality is that a electric car is of very limited utility in my climate.  Where I live you assume that you will see lows in the -28C range or lower and are very thankful if you don't.  My area is also rural, which means that we don't have everything we need within just a few miles.

Somebody is going to be proven wrong, that's for sure.
« Last Edit: April 04, 2017, 08:48:50 AM by NEKSkeptic »

Offline superdave

  • Stopped Going Outside
  • *******
  • Posts: 4851
  • My name is not dave.
Re: Tesla worth more than Ford
« Reply #2 on: April 04, 2017, 08:52:14 AM »
Ford's former CEO, Alan Mulally, was an engineer with a masters degree in business and aeronautical engineering.  He was very tech minded and forward thinking but stepped down in 2014.  They replaced him with a typical business guy.

Online NEKSkeptic

  • Off to a Start
  • *
  • Posts: 95
Re: Tesla worth more than Ford
« Reply #3 on: April 04, 2017, 08:55:16 AM »
Ford's former CEO, Alan Mulally, was an engineer with a masters degree in business and aeronautical engineering.  He was very tech minded and forward thinking but stepped down in 2014.  They replaced him with a typical business guy.
As the head of a company that is exists to make a profit, I can't fault a leader for making decisions that result in the best outlook for long term profitability.  The real question is who is right.  That remains to be seen. 

Tesla's diversification is rather smart.  Perhaps the stock price is based more on Tesla's other projects, such as solar roofs and home batteries.

Online daniel1948

  • Stopped Going Outside
  • *******
  • Posts: 4399
  • Cat Lovers Against the Bomb
Re: Tesla worth more than Ford
« Reply #4 on: April 04, 2017, 09:17:39 AM »
Wow! I'm surprised by this news. And as a big Tesla fanboy I am very pleased. I own some shares which I bought back when it was around $35. In hindsight, I wish I'd put my entire portfolio into Tesla back then. But at the time it was a risk, because of the cashflow crunch and uncertainty whether it might go under. And I just don't take risks. So I bought a token few shares just because I liked my Tesla car so much.

Once a Model S owner from way out of town asked if he could use my charger while he was here. In return he let me drive it a bit before we plugged it in. He had gotten that Model S for "free." But he did it by taking that big risk that I was unwilling to: He put his entire retirement fund into Tesla stock when they first announced that they would build the Model S. When his turn finally came to place a firm order on his car, he sold enough shares to buy the car and still had more value in his retirement fund than when he first bought the stock.

I really believe that Tesla is on the way up. I am one of 400,000 people to have reserved a Tesla Model 3.
Daniel
----------------
"Anyone who has ever looked into the glazed eyes of a soldier dying on the battlefield will think long and hard before starting a war."
-- Otto von Bismarck

Offline Ah.hell

  • Poster of Extraordinary Magnitude
  • **********
  • Posts: 10551
Re: Tesla worth more than Ford
« Reply #5 on: April 04, 2017, 09:33:19 AM »
Indicative of the irrationality surrounding Tesla and Musk.

Online NEKSkeptic

  • Off to a Start
  • *
  • Posts: 95
Re: Tesla worth more than Ford
« Reply #6 on: April 04, 2017, 09:41:30 AM »
Owning Tesla stock right now, or buying Tesla stock, is still extremely risky.  Everything has to go exactly right in order to justify Tesla’s current valuation.  The stock is priced for perfection. 

Tesla relies on $7,500 in taxpayer subsidies per vehicle.  I'd be extremely worried about this under a Republican administration.  This is a rather easy subsidy to cut since it is a tax break for the elite.  I don't see too many minimum wage earners driving a $70,000 Model S. 

The problem with buying Tesla stock now is that there really isn't any room to grow.  If I wanted to take on risk, I would go with a smaller cap stock that has plenty of room for growth.  Personally, I would not touch Tesla stock at this price with a ten foot pole.

Ford can sell lots of different vehicles to all sorts of different people.  Trucks, vans, hybrids, sedans, cheap cars, etc.  Tesla will only ever sell to the subset of the car buying population who wants an electric vehicle and who has a decent amount of purchasing power.   That's a definite challenge for Tesla.

I'm a big fan of vehicles like the Chevy Volt, even though I freely admit that it has not caught on as I had hoped.  The vast majority of my car trips are 40 miles or less.  But when I need range, I don't ever want to worry about my car not having sufficient range.  This is especially true living in a cold weather climate and enjoying heat in my car.  The Chevy Volt is the perfect electric vehicle for my needs.  The Tesla would be a nice second car, but I would never have it as my only option.
« Last Edit: April 04, 2017, 09:46:17 AM by NEKSkeptic »

Offline Ah.hell

  • Poster of Extraordinary Magnitude
  • **********
  • Posts: 10551
Re: Tesla worth more than Ford
« Reply #7 on: April 04, 2017, 10:07:50 AM »
What Nek said.  Even if Tesla succeeds, it will be decades before its worth the valuation its at now.  Tesla sells something along the same number of cars in a year as Ford sells in a day.

Offline superdave

  • Stopped Going Outside
  • *******
  • Posts: 4851
  • My name is not dave.
Re: Tesla worth more than Ford
« Reply #8 on: April 04, 2017, 10:18:36 AM »
I think the future is electric, but it may not be Tesla that heralds it.  History is littered with companies that had great ideas which were sold better or cheaper by other more successful companies.  Look at MsFt and Apple in the 90s. 

Offline murraybiscuit

  • Off to a Start
  • *
  • Posts: 28
Re: Tesla worth more than Ford
« Reply #9 on: April 04, 2017, 10:33:26 AM »
Owning Tesla stock right now, or buying Tesla stock, is still extremely risky.  Everything has to go exactly right in order to justify Tesla’s current valuation. /snip
This sounds fairly rational to me, but economics involving humans is never a rational endeavour. I'd pose two counterpoints to this:

1. The launch of the iPhone (and the rise of Apple in general)
2. The wealthiest people and greatest population densities in the US are largely concentrated on the edges of the country, with moderate weather. In my limited understanding, EVs in their current incarnation are more efficient in slow moving short distance urban scenarios.

If Musk's aim is to get as much market penetration with as high margin possible, in the shortest amount of time, he is following the right strategy IMO. Start at the top of the value chain, with the largest margins, lowest scale issues and the scale up and add value as you move down the chain.

This tendency of tech change to favor urban contexts is self-evident in many other industries, where economies of scale justify capital investment. The issue for Musk will be (as it was for Apple) how he maintains growth once he's picked all the low-hanging fruit. I should imagine the ancillary technologies will come into play there.

This isn't to say that tsla is risk-free. But I am trying to highlight that Musk is doing an end run around other manufacturers, who seem to have their heads in the sand. I feel like I've seen this all before with the iPhone. Manufacturers cam naysay all they like, but when share price and market share starts reflecting their institutional inability to respond, things are only going to get worse for them. As long as they continue to only dabble in EV, this is going to become increasingly obvious to the consumer. The writing has been on the wall for a very long time and they've made every effort to hide it and try wipe it off.

Competitors may need to band together and lobby hard to stall Musk, but if politicians have a secret Tesla in their garage, and the general public has the stars of SpaceX in their eyes, it's going to be increasingly hard for manufacturers to get a political and PR leg over.

The one card manufacturers hold over Musk is that of jobs and Trump's promises. But I think that Musk might just be successful and crazy enough for Trump to consider him a diminutive peer.  And I suspect the electorate will always admire a wildly successful capitalist, even if it means losing their jobs. So that bet that could backfire.
« Last Edit: April 04, 2017, 11:08:43 AM by murraybiscuit »

Online NEKSkeptic

  • Off to a Start
  • *
  • Posts: 95
Re: Tesla worth more than Ford
« Reply #10 on: April 04, 2017, 10:43:52 AM »

This sounds fairly rational to me, but economics involving humans is never a rational endeavour. I'd pose two counterpoints to this:

1. The launch of the iPhone (and the rise of Apple in general)

I'm not quite sure why this is an appropriate analogy.  The iPhone was a revolutionary product that did just about everything better than what people currently owned.  And while expensive, it was still affordable to the vast majority of Americans.  The Tesla, on the other hand, does some things better, but other things not nearly as well.  The two big ones are range and time to refuel.  Those two things are VERY important to car buyers.  If your point is that Tesla is ahead of the curve, that may be true, but Apple didn't drop a product that did a lot of things worse than the competition.



This tendency of tech change to favor urban contexts is self-evident in many other industries, where economies of scale justify capital investment.
Doesn't this weigh in favor of my point?  Ford has a much broader reach than Tesla.  Just look at all of the Ford pickup trucks in rural America.  If Tesla is really marketing to urban dwellers, then you have added yet another limiting factor to their potential market.   The subsets keep piling up.

But I am trying to highlight that he's doing an end run around other manufacturers, who seem to be napping.

That remains to be seen.  Yes, he is trying to do an end run.  But other manufacturers are not napping.  I can assure you that they have done copious amounts of market research, and they just don't believe that putting most of their eggs into the EV basket makes sense at this point in time.  The questions is whether they are right or wrong, not whether they are napping. 

I wish Tesla all the luck in the world.  I just wouldn't buy any stock at this price point.
« Last Edit: April 04, 2017, 10:48:36 AM by NEKSkeptic »

Offline xenu

  • Frequent Poster
  • ******
  • Posts: 2866
  • Chicago Blackhawks 2010,13,15 Stanley Cup Champion
Re: Tesla worth more than Ford
« Reply #11 on: April 04, 2017, 11:01:28 AM »
From what I remember Tesla is not even profitable yet as a company. I think the battery issue will be resolved but I agree with NEK. I think the stock is over valued right now.
"In the beginning the Universe was created. This has made a lot of people very angry and has been widely regarded as a bad move."
Douglas Adams

Online NEKSkeptic

  • Off to a Start
  • *
  • Posts: 95
Re: Tesla worth more than Ford
« Reply #12 on: April 04, 2017, 11:06:17 AM »
From what I remember Tesla is not even profitable yet as a company. I think the battery issue will be resolved but I agree with NEK. I think the stock is over valued right now.

Tesla has an annual pre-tax loss of $764 million.  Ford has an annual pre-tax profit of $10.4 billion.  And Ford pays a 5% dividend.

Online The Latinist

  • Cyber Greasemonkey
  • Technical Administrator
  • Reef Tank Owner
  • *****
  • Posts: 9301
Re: Tesla worth more than Ford
« Reply #13 on: April 04, 2017, 11:21:04 AM »
I don't see how a company that lost 675M on revenues of  $7B can be worth more than a company making $4.6B on revenue of $150B, especially when the immediate future of the subsidies they rely on is uncertain.
I would like to propose...that...it is undesirable to believe in a proposition when there is no ground whatever for supposing it true. — Bertrand Russell

Offline murraybiscuit

  • Off to a Start
  • *
  • Posts: 28
Re: Tesla worth more than Ford
« Reply #14 on: April 04, 2017, 12:39:51 PM »
The iPhone was a revolutionary product that did just about everything better than what people currently owned.  And while expensive, it was still affordable to the vast majority of Americans.  The Tesla, on the other hand, does some things better, but other things not nearly as well.  The two big ones are range and time to refuel.  Those two things are VERY important to car buyers.  If your point is that Tesla is ahead of the curve, that may be true, but Apple didn't drop a product that did a lot of things worse than the competition.

Fair point. I seem to remember other handset manufacturers like Blackberry saying the iPhone didn't deliver any value for money, or offer anything they didn't already have. The consumer made the decision in the end. If anything, Tesla's marketing, pricing and premium positioning doesn't make it undesirable, it makes them aspirational in the consumer's mind. People could have had a cheap phone that did the job. They chose differently. Let's see how far down the value chain Tesla is willing to come and how far up the chain people are willing to purchase.

Doesn't this weigh in favor of my point?  Ford has a much broader reach than Tesla.  Just look at all of the Ford pickup trucks in rural America.  If Tesla is really marketing to urban dwellers, then you have added yet another limiting factor to their potential market.   The subsets keep piling up.

Yes, he is trying to do an end run.  But other manufacturers are not napping.  I can assure you that they have done copious amounts of market research, and they just don't believe that putting most of their eggs into the EV basket makes sense at this point in time.  The questions is whether they are right or wrong, not whether they are napping. 

Just look at all those small margins on mass-market cellphones Apple is missing out on. Why don't they penetrate the bottom end and prioritize developing markets like other companies? Just think of all those SKUs they could churn out. If anything, your point is an argument against the mass market model. Mass market manufacturer's level of innovation is constrained by their current business model, customer expectations, legacy support and current partner / ecosystem relationships. Their ability to iterate on innovation is limited by their dependency on their current revenue model. I don't doubt that EV doesn't suit their palette :) I don't see how his competitor's investment in the status quo is a downside for Musk...
 
I wish Tesla all the luck in the world.  I just wouldn't buy any stock at this price point.

I'll admit in having close to zero economics ken. And I'll agree that if you just look at the books, based on current and past performance, it's risky stuff. But markets are strange places. How is it that tech companies now occupy top spots on markets which would have been unthinkable a few decades back? Seriously, Facebook, Google? What do they actually sell? Well, it is what it is...
« Last Edit: April 04, 2017, 05:30:13 PM by murraybiscuit »

 

personate-rain