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Tesla Passes Ford by Market Value

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Re: Tesla Passes Ford by Market Value

#141
post #126

Earlier quoted context omitted.

It is like comparing a spunky startup to an entrenched corporation. Ya, IBM once spent more than Facebook, but Facebook was worth more because it had potential while IBM didn't. Ford doesn't have any good ideas for the future, they are too busy with the here and now and haven't shown an ability to do anything but incremental improvements with their R&D spending. Like we don't expect much more from IBM, we don't expec…

What is this based on? Ford has had record profits over the past few years and has continually improved their vehicles and manufacturing processes, including remaking two assembly plants to make aluminum body F 150s. They also invested a billion dollars in Arvo AI and are making aggressive moves into self driving technology.

An aluminum body is exactly the kind of iteration that was being talked about. It is neat, but its not and all new drive train on a totally different tech. Aluminium is a pretty well understood material, while self driving cars are virgin territory.

Tesla is making larger swings and potentially accepting larger risk. Ford is... iterating.

Re: Tesla Passes Ford by Market Value

#142
post #126

Earlier quoted context omitted.

It is like comparing a spunky startup to an entrenched corporation. Ya, IBM once spent more than Facebook, but Facebook was worth more because it had potential while IBM didn't. Ford doesn't have any good ideas for the future, they are too busy with the here and now and haven't shown an ability to do anything but incremental improvements with their R&D spending. Like we don't expect much more from IBM, we don't expec…

What is this based on? Ford has had record profits over the past few years and has continually improved their vehicles and manufacturing processes, including remaking two assembly plants to make aluminum body F 150s. They also invested a billion dollars in Arvo AI and are making aggressive moves into self driving technology.

>What is this based on?

It's based on nothing other than the weird contempt you see for large, established corporations in the SV crowd. Big established corporation = big established rule book and management hierarchy = stifled innovation. Nevermind the fact that most of the major technological breakthroughs of the past 100 years were developed by the research wings of big corporations (Bell Labs, defense contractors).

Re: Tesla Passes Ford by Market Value

#143
post #43

Earlier quoted context omitted.

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…

So is it the overall volume of overvaluations which was bad? Are we in a similar position now?

There will always be overvaluations and undervaluations of companies relative to how they'll perform in the future. It's notoriously difficult to predict. In my opinion, however, while there may be some overvaluations now, we're not even in the same universe as we were in 1999/2000.

Back then you could take an MBA with a powerpoint, put the word "Internet" on it, and they could conceivably IPO for hundreds of millions with nothing more than that. All of these companies valued at $100m, $1b, $10b with no more than a promise of "one day we'll sell x online and make a lot of money." A couple companies full of genius technologists (Amazon, Paypal) made it through the rubble, but for the most part it was all smoke, mirrors and charades.

Contrast that to today. Certainly there are overvalued companies; there always are, but there are also companies that are proving to be worth the hype, and severely undervalued. The Internet is 20x as large, there's real revenue coming in, real profits, and the scale that companies can hit when they land on something solid is incredible.

People were crying Bubble when Facebook was valued at $30B because it wasn't making much money. Now it's bringing in billions easily and still growing http://www.marketwatch.com/story/facebook-profit-tops-1-bill..., now valued at $400B+. So some companies were undervalued, even when everyone was crying "bubble."

As an asset class today tech is tiny. The valuations of every tech "unicorn" combined today would be less than Microsoft. Would you rather own every single tech startup that raised venture capital in the past couple years or Microsoft? You could have that discussion, but you wouldn't be crazy to take all of the VC-raising startups. And today the total amount of venture capital raised is a rounding error relative to the rest of the economy. (There's also a discussion around how all asset classes are highly valued today and even bonds are returning negative yields, but we'll save that for another day).

Tesla is certainly expensive relative to where it's at today, yet I still put in my entire net worth at $180 http://www.marketwatch.com/story/elon-musk-to-the-guy-who-in... (this is not a move that would be recommended by your financial advisor; my net worth is something I could replace quickly enough that it's not a big deal). Tesla is, in my opinion, building a fortress. It's combining the technology needed to incredible electric cars at large scale with the biggest battery factories in the world, solar-powered roofing, a nationwide charging network, and just some incredible innovations. We've seen Tesla do the impossible an innumerable amount of times in recent years.

So the price of Tesla right now is very frothy, but I still think in 10 years I'd rather own 100% of Tesla than 100% of Ford. If you disagree, then Tesla is overvalued, but no one truly knows who will be right. Such is life as a growth stock.

Re: Tesla Passes Ford by Market Value

#144
Comparing Tesla with Ford is like comparing Ford with (GM + Shell + Hertz). Tesla is an energy company not an automobile company. It plans to sell you new ways to capture (solar panels), store (power wall), and consume (cars) energy. It also plans to make cars fully autonomous and ownership free. Ford will obviously compete with Tesla in some segments is not a primary competition for Tesla.

Re: Tesla Passes Ford by Market Value

#145
post #106

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…

Aside from batteries, supercharger network, and any true desire to actually build nice electric cars. I drove an electric Ford Focus for 2 years, and it was an absolute terrible afterthought of an electric car. It was downright dangerous on wet surfaces with front wheel drive and batteries in the rear, not to mention the horrendous user experience that is Ford Sync. I drive a Tesla now and couldn't be happier.

Aside from the safety statements, you're comparing a ~$35K car to a $90k+ luxury car?

What about a Bolt?

Re: Tesla Passes Ford by Market Value

#146

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 t…

"Being long Tesla is making a bet that the future will look different."

No. Being long Tesla is making a bet that the future will look like Tesla, that Tesla will be producing a very significant chunk of the vehicles on the road sometime in the reasonably near future. Tesla currently has plans to expand to produce 0.5 million vehicles per year in the 2018-2020 time frame; Ford currently produces 2.5 million vehicles in the US for ~15% of the market.

Disclaimer: I'm on my second F-150 and third Ford vehicle.

Re: Tesla Passes Ford by Market Value

#147
post #138

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 co…

This! Tesla's proposition is very risky but from their track record of what they've done with reusable rockets, I guess you can say execution is their strong point. Yes Elon will have crazy deadlines, but if you put a good buffer then eventually he'll deliver it.

Elon Musk has said: "I would rather commit seppuku than fail" - seppuku being ritual suicide.

The man who has executed the most impressive technological achievement in modern times (reusable rockets), said he would rather die than fail.

I think it's crazy to be betting against this guy. your only chance is if he dies in the process.

Re: Tesla Passes Ford by Market Value

#148

Earlier quoted context omitted.

except ford is spending an order of magnitude more than tesla. it's much easier to spend 100 dollars meaningfully than a 100 billion. I also hope you're willing to level the same charge at Google and Apple.

It is like comparing a spunky startup to an entrenched corporation. Ya, IBM once spent more than Facebook, but Facebook was worth more because it had potential while IBM didn't. Ford doesn't have any good ideas for the future, they are too busy with the here and now and haven't shown an ability to do anything but incremental improvements with their R&D spending. Like we don't expect much more from IBM, we don't expec…

Also ford is investing in on-demand shuttles service, offered at low cost, and expanding to 8 cities this year. Executed well this could become very popular.

Re: Tesla Passes Ford by Market Value

#149

Earlier quoted context omitted.

Tesla is potentially a trillion dollar company and it's biggest current hurdle is getting it's production up to meet an enormous demand. The reason it's trading at a higher market cap is because Ford doesn't have any growth potential and Tesla is still trading at a fraction of what it could be. Of course there is still a ton of risk factors for them, but expected value for investing should be based on the chance of s…

What are you basing that trillion dollar evaluation off of? Combining the 5 largest auto manufactures on earth and you are still well short of a trillion dollar company.

[deleted]

Re: Tesla Passes Ford by Market Value

#150
post #58

Can someone more knowledgeable explain how is that even possible? Doesn't this mean that the market predicts that Tesla's future earning after discount and after taking risks into account is higher than Ford's? Under which data? Or am I missing something?

"Doesn't this mean that the market predicts that Tesla's future earning after discount and after taking risks into account is higher than Ford's?"

Roughly, yes.

"Under which data?"

Data? Data? Never heard of it. This is all gut feelings here.

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