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Tesla Passes Ford by Market Value

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Re: Tesla Passes Ford by Market Value

#521

Post by pembrook »

shawkinaw wrote: post #276
crabasa wrote: post #57

Earlier quoted context omitted.

> Over the last five years, Ford has posted net income totaling $26 billion, while Tesla has lost $2.3 billion. Ford: "We have no idea how to invest this money. I guess let's just put it in the bank." Tesla: "We have so many idea for investments, we're only constrained by cash. Let's go back to the capital markets!"

More like Ford investors: "Let me soberly evaluate the company's present and future financial situation before I make any commitments" Tesla investors: "TAKE MY MONEY"

Dead on. The price of Ford is predominantly being determined by institutional investors with a strong understanding of the dividend discount model. Investors moving the market on Ford are buying/selling what they believe to be a stable, mature company and are pricing pretty much ZERO potential for innovation into Ford.

Tesla on the other hand is a darling of retail investors attracted to the marketing machine of "Silicon Valley disruption" and they have already priced in a belief that Tesla will win the global automotive market. DDM? What's a DDM?

Meanwhile Ford, GM, and all the other automotive incumbents are investing in the same technologies as Tesla. Is it more likely that Tesla never falters (even slightly)? Or is it more likely one of the 10+ incumbents surprises with a self-driving/electric success?

I know where I put my money. Interest rates will be climbing at the exact same time as Tesla will be attempting to expand their market to a larger audience who always purchase new cars with an accompanying loan. Oil prices are showing no indication of climbing again for years to come. Consumers have just replaced their aging vehicles in record numbers and won't be in the market for a new one for roughly 7-12 years. Good luck Tesla.

Re: Tesla Passes Ford by Market Value

#522

Post by pembrook »

postmeta wrote: post #518
peterbonney wrote: post #482

Former finance professional here: Ford is actually worth 3 times as much as Tesla, once you factor in debt. The total value of the Ford capital structure ("enterprise value") is about 150 billion. When two companies have wildly different capital structures, you have to compare them on enterprise value, not the market cap of their equity. So while I give kudos to Tesla for building a valuable business, it still has a…

I can't help but think that # of employees and pension systems should be a bigger factor in valuations. GM and Ford have 200k+ employees each and so much legacy baggage where-as Tesla, even with Scty, only has around 40k employees. And they mostly tend to be fanatically hard workers.

Legacy costs for Ford and GM are only decreasing as they stopped giving out pensions in the 90s. As their retirees keep dying off, those expenses won't be replaced.

Also, I know from experience Ford uses their ability to generate cash and borrow cheaply to give "buyouts" to large chunks of retirees at a time (ie. They offer a lump sum of $1 million dollars today instead of a pension. This almost always works out in the company's favor).

Re: Tesla Passes Ford by Market Value

#523

Post by iamacynic »

seanmcdirmid wrote: post #458
iamacynic wrote: post #436

Earlier quoted context omitted.

> Every year is potentially a record breaking year for profits. That's how inflation works! do yourself a favor and never own or run a business. record breaking numbers do not happen by accident or because of inflation. you have a fundamental misunderstanding of what is actually going on here. the analogy you are looking for is "right before the car showed up the record sales of horses looked unstoppable." but you're…

How many years does Ford have record breaking sales? It happens more often than you'd think and doesn't really prove much.

do you run a business? if not, keep it that way.

Re: Tesla Passes Ford by Market Value

#524

Post by oblib »

Judgmentality wrote: post #368
criley2 wrote: post #342

Earlier quoted context omitted.

I find it shocking that something as simple as personal belongings would be a "lock in" to existing technology. It's like saying "I prefer my horse, I can feed it grass off the side of the road, but you have to find some fancy petro-chemical station for your auto-mobile? Insane! My gas grows next to the road!" I get it, but try to put yourself in the place of someone younger who doesn't make decisions like "I would n…

Some people just like owning cars. I live in San Francisco and don't currently own a car, but I want one. Perfect example where Uber fails - I can't take my dog anywhere. Different people have different values. Also I'm quite young, so I don't think age is a strict delineation.

Having personal transportation, rather a horse, a bike, or a car, is pretty vital for a lot, if not most of us, here in the US.

Self driving shuttle services will be a great new way to transport us, especially in metro areas, but this won't work very far from the center of those so if the valuation of that market is too optimistic in regards to Tesla the holders of their stock will pay for it.

If you look at the number of US car companies that have started from scratch in the past 70 years you don't see many still standing (pretty close to none). Tesla has a very different model though so we can't lump them in with most all of the others.

In my own humble opinion, I think Tesla's fate will be decided by how fast they can produce a low end, very affordable and dependable car for the masses. If they can deliver that within the next 3-4 years they've got a very good shot at moving up to competing with Ford and GM.

If they instead try to compete with higher end cars they'll find that's a hard road to travel. At some point soon the big players will produce a car that's a competitive option and dilute their market and they'll die.

It's worth remembering that both Honda and Toyota captured market here with affordable dependable cars, not luxury cars. Those came quite a few years later.

I fully expect Tesla will produce an affordable car though, and it would make perfect sense if they called it a "Model T".

Re: Tesla Passes Ford by Market Value

#525

Post by qmr »

username223 wrote: post #366
criley2 wrote: post #342

Earlier quoted context omitted.

I find it shocking that something as simple as personal belongings would be a "lock in" to existing technology. It's like saying "I prefer my horse, I can feed it grass off the side of the road, but you have to find some fancy petro-chemical station for your auto-mobile? Insane! My gas grows next to the road!" I get it, but try to put yourself in the place of someone younger who doesn't make decisions like "I would n…

It's not "personal belongings," it's "personal space." Hot-sheeting happens where sleeping space is extremely limited, like oil drilling camps, but it hasn't taken off among the general population, despite the fact that you only use your bed for around 1/3 of the day. People are willing to pay for their own beds and, frequently, their own apartments or houses, despite the fact that most of that space goes unused most…

Self driving cars are the future, hardly a fad.

Re: Tesla Passes Ford by Market Value

#526

Post by qmr »

Certhas wrote: post #413
wang_li wrote: post #371

Earlier quoted context omitted.

> If we are serious about climate change, then sometime in the 2030s [1] we have to stop building new combustion engines. Or there might be a breakthrough in carbon capture, converting atmospheric CO2 into petroleum and we can drive combustion engines forever. CO2 capture is an area of active research and it's entirely possible that advances there will make Tesla and Solar City moot.

Or maybe there will be a breakthrough in battery tech and in five years we all drive Teslas. CCS + Power2Gas + synthetic fuel is unlikely to be cost competitive. It's not like climate scientists don't consider that option. In fact the only half way plausible scenarios for reaching the two degree target involve going carbon negative after 2050. And synthetic fossil fuels are probably the only way to make airtravel car…

... because Tesla is the only company making electric cars, right?

Re: Tesla Passes Ford by Market Value

#527

Post by jansan »

seanmcdirmid wrote: post #168
dkrich wrote: post #126

Earlier quoted context omitted.

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.

Market perception. Ford's P/E ratio is 9.89. IBM's P/E ratio is 14.02. Facebook's P/E ratio is 40.79. Tesla's P/E ratio is infinity since the E is negative. I'm sure Ford has done many incremental innovations, I didn't say they didn't. IBM does the same thing, and has "record profits" every few years also. Its just the market isn't expecting the next big thing to come from Ford, while they are expecting that from Tes…

And you can lose a lot of money while still being right. Always remember, Wall Street's cemetery is full of people who were right too early.

Re: Tesla Passes Ford by Market Value

#528

Post by legolas2412 »

sxates wrote: post #444
legolas2412 wrote: post #432

Earlier quoted context omitted.

I think solar is the future, but these claims are stupid. > "to the point that it no longer makes sense to not have solar everywhere. It's cheaper than coal, and will soon be cheaper than all the other fossil fuels as well, and will continue to go down, never up." Then the market should automatically have shifted to 100% solar by now. Solar is getting cheaper yes, but it is dependent on hours of sunlight available, w…

>Then the market should automatically have shifted to 100% solar by now. 65% of new capacity in the US last year was wind or solar.[1] The world doesn't change overnight, but expect that trend to continue. Renewable energy growth is only being slowed by lack of storage. As battery production and other storage techniques come online, it allows higher and higher % of energy to come from renewable sources. >Don't know w…

USA is a saturated market, where renewables are given incentives by the government (unfortunately it won't be so any longer).

Look at developing countries, only a fraction of new energy sources for India are solar, even though our coal is inferior quality.

I'm pretty sure that coal is still cheaper than solar

Re: Tesla Passes Ford by Market Value

#529

Post by legolas2412 »

sxates wrote: post #445
legolas2412 wrote: post #440

Earlier quoted context omitted.

You do buy in Tesla's marketing as gospel though. > A Tesla has all the hardware needed for Level 5 autonomy (which they've demo'd, but requires regulatory approval), and it's a software update away. Audi, BMW, Google etc. demoe'd similar capacity as the tesla did 2-3 years ago. Do you even understand how difficult problem it is? It's not a problem you engineer away. Do you think Tesla made machine learning breakthro…

They demo'd it, but they didn't ship it!

Ahh, a controlled demo on a test track with impeccably clear road lines and signs. Something they could have tested a hundred times with, potentially overfitting a route. Even then the Tesla was over-cautius, stopping metres before in front of a stop sign.

And that is still level3 or level4. Level5 is inarguably far far away.

Re: Tesla Passes Ford by Market Value

#530

Post by bronz »

LyalinDotCom wrote: post #214

Totally relevant news to 99% of us readers who wont be driving a Tesla anytime soon :)

even years ago, a model s was as expensive to own, all costs accounted for over the span of seven to ten years, as a honda odyssey minivan. they are about to release a car that costs 35000 dollars.
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