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Tesla Passes Ford by Market Value

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Re: Tesla Passes Ford by Market Value

#81

Post by John23832 »

cmarschner wrote: post #22
John23832 wrote: post #7

Earlier quoted context omitted.

If they can properly pivot into the electric car market, a lot. Ford has all the infrastructure that Tesla is attempting to build now (aside from the batteries, but that is something that Ford could easily partner with another manufacture to get). They know how to mass produce cars (granted right now, ICE cars). That's not an easy feat. They have a large manufacturing and maintenance base that, frankly, Tesla can't r…

Ford (and all the other car companies) has also huge liabilities - a huge supply chain and R&D costs around combustion engines, and costly dealerships that revolve around servicing a hugely complicated contraption made up of hundreds of mechanical parts. Much of this will be of zero value in the near future.

There is such a thing as retooling your existing infrastructure. Nobody is saying that Ford's offering will be a homogenous Ford vehicle... hell, neither is Tesla.

Re: Tesla Passes Ford by Market Value

#82

Post by [deleted] »

tptacek wrote: post #54
adamnemecek wrote: post #4

Earlier quoted context omitted.

Investors invest based on promise of future value. How much is Ford expected to grow?

That's true, but underscores how treacherous comparisons between big companies based on market caps are. By every metric other than investor confidence in a single narrative (except maybe R&D spending?), Ford dwarfs Tesla and will continue to do so for the foreseeable future. I don't think anyone has any trouble telling a story in which Tesla is ultimately a more valuable company than Ford. And I agree that's a big d…

[deleted]

Re: Tesla Passes Ford by Market Value

#83

Post by Symmetry »

baloneyman wrote: post #45
toomuchtodo wrote: post #3

Earlier quoted context omitted.

> And when it comes to car sales, Tesla sold 40,697 vehicles in the U.S. last year, according to researcher IHS Markit. Ford sells that many F-Series trucks in the U.S. about every three weeks." How much stationary energy storage did Ford sell last year? "Tesla CTO: our energy storage is growing as fast as we can humanly scale it [Gallery of new Powerpack station]" https://electrek.co/2017/01/30/tesla-cto-energy-stor…

This time it's different! This time bubbly companies with no earnings and tons of debt will create a new paradigm! Lol

It might very well be overprices (I sold because I think it is) but they got $7B in revenue in 2016 which is hardly no earnings. They make money on every car they sell so it would be pretty straightforward for them to decide to become profitable at the expense of growth and R&D. Now, their stock price assumes they're going to conquer the world rather than settle down to become a profitable small car manufacturer and solar/battery provider so lots of investors would lose their shirts if that happened. But it's an option for the company which makes them very different from the pets.coms of the world.

Re: Tesla Passes Ford by Market Value

#84

Post by John23832 »

booleanbetrayal wrote: post #35
John23832 wrote: post #7

Earlier quoted context omitted.

If they can properly pivot into the electric car market, a lot. Ford has all the infrastructure that Tesla is attempting to build now (aside from the batteries, but that is something that Ford could easily partner with another manufacture to get). They know how to mass produce cars (granted right now, ICE cars). That's not an easy feat. They have a large manufacturing and maintenance base that, frankly, Tesla can't r…

Strictly on the car front (which largely ignores Tesla's real growth potential) ... Ford also maintains an extensive dealer network which can disincentivize some painful adjustments that otherwise might need to be made to be more aligned with future sales, etc. People talk about direct sales for Tesla usually in a negative connotation due to institutionalized friction (re: lawsuits / political favoritism), but I thin…

Dealership networks are fiefdoms in a benevolent kingdom. While they get a say, ultimately you go with the will of the manufacturer or you find another car to sell.

Re: Tesla Passes Ford by Market Value

#85

Post by John23832 »

adamnemecek wrote: post #25
John23832 wrote: post #18

Earlier quoted context omitted.

Factories, dealerships, a maintenance network, etc.

I can't imagine that all of those will remain usable and competitive without major investments. Note that doesn't need dealerships.

Of course Ford would make investments to stay viable... that's how business works.

Re: Tesla Passes Ford by Market Value

#86

Post by drzaiusapelord »

stcredzero wrote: post #80
drzaiusapelord wrote: post #61

Earlier quoted context omitted.

and... this is how bubbles happen. Investors and fans say "but, but my stock isn't overvalued! Mine is the exception, its everyone else who is in the bubble!" There's no sane scenario where a car company that sells cars in the tens of thousands over-values a car company that sells cars in the millions.

Investors and fans say "but, but my stock isn't overvalued! Mine is the exception, its everyone else who is in the bubble!" It was true if you held Google stock.

Google had a search monopoly. It trounced all competition trivially. I remember Google absolutely dominating the market and everyone shifting away from hotbot, yahoo, etc within a year or so. Anyone can, and does, make an electric car now and ones that don't cost $90,000. These aren't remotely comparable scenarios.

Re: Tesla Passes Ford by Market Value

#87

Post by simonsarris »

Ford is sitting on almost $16 billion cash. Tesla, like Amazon, burns through cash as fast as they can turn it into scalable future stuff. Whether you consider this good or bad depends on your future outlook:

Being long Ford is making a bet that the future will look pretty much the same.

Being long Tesla is making a bet that the future will look different. (Plus the risks of believing that they can do what they say they can, and that their vision is more correct than not)

If you are a Ford investor and want Ford to be investing in the future, you should be ashamed of them for being either too scared or too stupid to know what to do with their piles of money. Then again, the largest carmakers in the US (incl. Ford) were making a loss just a few years ago, and unlike Tesla, they were making that loss while doing ZERO to invest for the future.

So maybe Ford should be scared.

Or maybe they should be pivoting faster so they don't return to not-making-a-profit, because unlike Tesla, they still aren't spending very much on the future, are they?

We can argue about whether or not Tesla has a good plan or a bad plan, but Ford has shown before that they more or less have "No plan." Their reliance of SUV profits almost killed them in the mid 2000's (and did mortally wound GM, only to be resurrected). Will Ford's reliance on the F-150 (or on ICE expertise while outsourcing most other things) do the same thing in the future?

~~~

I've been holding Tesla for a long time. Currently I'm more optimistic about the company than when I bought it, which seemed fairly risky.

I think the room for growth and market expansion (Important Electric Things and energy future) is very large. I think trying to compute how the math will get there is a mistake, short of making sure that they are not going to run out of money.

Being long technology stocks is a strange game. If you're long IBM or AAPL right now, you're more or less betting that the future is going to look pretty much the same, just like with Ford. It's almost a misnomer to call them technology stocks.

There are only a handful of public companies you can bet on (Tesla and Amazon are probably the most obvious) that are really betting big on the future. The dividends of these will be unknown.

(This was part of a previous small discussion about the price of TSLA last night: https://news.ycombinator.com/item?id=14018954)

Re: Tesla Passes Ford by Market Value

#88

Post by mudetroit »

mikeash wrote: post #28
maxerickson wrote: post #23

Earlier quoted context omitted.

The Bolt uses a drivetrain built by LG.

Right, so what is GM bringing to the table there? If the Bolt were to somehow become a best seller, how much benefit would GM see?

Lots of design knowledge around vehicles, both from an aesthetic standpoint and in a number of other subsystems. But the bigger point is actually that GM, Ford, and the other major car manufacturers are really giant project management and logistic organizations. They are far from perfect corporations, but don't undersell what they do.

Re: Tesla Passes Ford by Market Value

#89

Post by drzaiusapelord »

mikeash wrote: post #43
chefandy wrote: post #27

Wasn't overvaluing the potential of newer companies over established institutions with significant holdings one of the hallmarks of .com bubble ridiculousness? I'm not particularly knowledgeable about finance and economics– if someone that is knowledgeable has some insight, I'd love to hear it.

Totally. Just look at the ridiculous valuations here: https://en.wikipedia.org/wiki/Dot-com_bubble#List_of_compani... On the other hand, there were some major successes as well. Amazon got its start in the bubble and is now gigantic. eBay is doing great. So is PayPal (which is relevant here, since without PayPal we wouldn't have Tesla). Sometimes these ridiculous valuations are completely unjustified, but sometimes t…

>Sometimes these ridiculous valuations are completely unjustified,

'Sometimes' is being generous. If we can only cherry-pick the world's biggest tech successes all of whom can be counted on one hand compared to the thousands, if not tens of thousands, of other over-valued companies, then you're really not saying much here. This is like saying, "How are there poor americans, look how rich Bill Gates is!"

A few exceptions don't invalidate we're in a bubble or justify the practices that get us in a bubble - traders trying to outfox other traders by reading the tea leaves of hype and ignoring the actually profitability and practicality of the business.

Re: Tesla Passes Ford by Market Value

#90

Post by andy_ppp »

I would agree with the market that Tesla has the potential to be far far larger than Ford should things go well. If they manage to get to 500000 cars and full automation within the next year, they'll be worth even more than their current market cap.

Remember that Tesla have by far the best dataset for building self driving cars and this is going to give them a huge time to market and/or safety advantage over their competition. If they launch an Uber clone as well (which they have implied they might) I think they could be able to replace a lot of car journeys with their service instead of paying drivers, something Uber's lofty valuation is entirely based upon.

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