The Slow Death of the Internal Combustion Engine

[JSH]

Originally Posted by redpoint5

I wouldn't even say VW is the most aggressive at talking about making EVs, as Tesla talks about it much more. They sold 164 EVs in all of the US and are at 17th place with their sole vehicle; the e-Golf.

Perhaps they will become an EV powerhouse, but it's all talk for the moment, along with some court negotiated EV infrastructure building. I expect a company to SAY whatever it takes to get back into the good graces of their customers/government. It remains to be seen what they actually DO.

It's like Tesla saying they will build a $35k car; lots of talk, no evidence of making it happen. If they aren't making it now with federal subsidies still available, there's little chance they will make it happen in the future.

I was talking about established automakers that make 99.9% of the cars sold today. VW is the largest automaker in the world and makes 11% of the total cars. The top 5 automakers make half of the cars. The top 10 make 75%. If the big guys don't get on board there will be no EV revolution.

Tesla doesn't crack the top 25. They are a rounding error in the global automotive market.

The VW MEB platform will go into production, the money has already been spent.

[redpoint5]

The money may have already been spent, but it still remains to be seen if VW is serious about EVs (I'm not saying they aren't). They are scrambling to get into the good graces of public perception and meet government requirements. Take their EA chargers for instance, they aren't particularly concerned with locating them in ideal spots, with making sure they work, assessing fair charging fees, etc. It's obvious they are begrudgingly dragged into the market rather than excited to pioneer it.

[RedDevil]

Originally Posted by JSH

I was talking about established automakers that make 99.9% of the cars sold today. VW is the largest automaker in the world and makes 11% of the total cars. The top 5 automakers make half of the cars. The top 10 make 75%. If the big guys don't get on board there will be no EV revolution.

Tesla doesn't crack the top 25. They are a rounding error in the global automotive market.

The VW MEB platform will go into production, the money has already been spent.

Tesla cracks the top 10 when it comes to value.
https://www.msn.com/en-us/money/comp...rld/ss-BBCDzzB

[JSH]

Originally Posted by RedDevil

Tesla cracks the top 10 when it comes to value.
https://www.msn.com/en-us/money/comp...rld/ss-BBCDzzB

Tesla's valuation doesn't make sense on any objective industry metric.

[RedDevil]

Originally Posted by JSH

Tesla's valuation doesn't make sense on any objective industry metric.

It's only money.

But OK, if not for money, what are objective industry metrics, then?
Stats, charts?
Check these out: https://cleantechnica.com/2018/12/25...-tesla-charts/

Revenue... https://www.statista.com/statistics/...enue-of-tesla/

That's some huge rounding errors...

[JSH]

Originally Posted by RedDevil

what are objective industry metrics, then?

Price to Earnings is the most common.

Telsa stock averaged about $350 per share in the 4th quarter
Telsa's 4Q2018 earning per share was $1.93

That gives a P/E of 181

A P/E over 15 is considered overvalued for a manufacturing company

For reference:
The P/E for the S&P 500 is 21
The average for the automotive sector is 7.13
Apple is 16.25


VW's P/E is 12. They made 16.2 billion euro last year (EBIT)

[RedDevil]

Hah no. It just depends on what the company is doing.

These numbers you represent apply to companies that operate in a stable market, keeping a constant market share. Those have low investment (why would they, nothing changes much) and high yield. The stocks won't grow much in value, instead they pay dividend.

Opposed to that are growth stocks. Those companies invest their earnings in growth rather than payout. See https://www.commsec.com.au/support/l...th-shares.html.

TSLA is a growth stock to the extreme. Investors expect Tesla will continue to grow to maybe 10 times its current size in 5 years, just like it did in the past 5 years.

Now that's a gamble. But there's a more reliable metric: revenue.
As pointed out here revenue tells more about the value of a company than profit does, provided it shows a healthy growth.
Tesla's revenue over 2018 was about $21 billion; that's more than a third of its total stock value.

The revenue is building up quickly too, more than half a billion per week now, so it could earn its value within 2 years.
With new factories under construction and new products down the line it will keep growing in the foreseeable future. If it doubles again the yearly revenue will beat its current stock value. At that point the stocks will start to rise.

[JSH]

Automotive manufacturing is a very stable industry. It is not a growth market.


You prefer revenue so let's look at the standard revenue metric P/S:

Telsa's P/S is 2.68
VW's P/S is 0.33

There is a reason that Tesla is the most shorted stock on the market.

[oil pan 4]

That's one of the reasons I will never own tesla stock.
I would be better off buying gold.

[JSH]

Originally Posted by oil pan 4

That's one of the reasons I will never own tesla stock.
I would be better off buying gold.

I'm an Index investor so I don't pick individual stocks.

There is talk of adding Tesla to the S&P 500 in the second half of 2019. If that happens I'll be an unwilling owner.