Tesla overtakes Toyota to become world’s most valuable carmaker

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Thread: Tesla overtakes Toyota to become world’s most valuable carmaker

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    Tesla overtakes Toyota to become world’s most valuable carmaker

    Shares of electric auto pioneer rise fivefold in year as value of rivals drop because of pandemic



    Tesla has overtaken Toyota to become the world’s most valuable carmaker by market value, in the week that marks the 10th anniversary of the electric auto pioneer’s stock market entry.

    The electric carmaker’s shares have climbed fivefold during the past year, from $230 about 12 months ago to $1,100 on Wednesday, taking the company’s market capitalisation to $205bn.

    Toyota, the world’s second-largest single carmaker measured by output with annual production of more than 10m vehicles, was worth about $200bn on Wednesday after its Japan-listed shares fell 1.5 per cent to ¥6,656 ($61).

    Once debt is included, the Japanese group is still worth more, at $284bn compared with Tesla’s $207bn enterprise value, according to data from financial data provider Sentieo.

    The relentless rise of Tesla’s shares has baffled some analysts, with the company’s value soaring despite producing only 500,000 vehicles this year and scarcely making a profit.



    If the company breaks even in the quarter to June, it will be the first time the business has been in the black for four straight quarters.

    While Toyota’s shares trade on a multiple that values the business at 16 times its earnings, Tesla’s shares trade on a multiple of almost 220 times the company’s profits, far above any other auto business and close to double the multiples seen by tech giants such as Amazon.

    Tesla’s chief executive Elon Musk tweeted in May that the company’s share price of $755 was “too high”, which did little to halt the company’s surging value.

    While the electric group’s shares have almost tripled so far this year, values of established carmakers have slid because of the impact of the global coronavirus pandemic.

    In May, the Japanese carmaker warned that operating profits could slip 80 per cent this year and warned the decline in vehicle sales was likely to be “bigger than during the Lehman crisis”.

    The pandemic has sapped global demand, with car sales expected to fall by 15 per cent this year, while demand for electric vehicles, driven by regulations in Europe and China, is expected to keep rising.

    Although major carmakers from Volkswagen to PSA are releasing battery vehicles, Tesla is still expecting its overall sales to grow as the global market for electric vehicles accelerates.

    Tesla’s detachment from the industry-wide sell-off will be taken as validation by supporters who view the company as a tech group rather than a traditional industrial carmaker.

    One Tesla employee close to Mr Musk compared the feat of surpassing Toyota to the moment Amazon overtook Walmart by market value in 2015.

    On Tuesday, when a Twitter user tweeted Tesla’s $200bn market cap to Mr Musk — with a couple of clinking champagne glass emojis — the Tesla chief executive replied “Party on . . .”.

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    Nice to see an American company RWD Tesla becoming the worlds No1 most valuable car company stealing Toyota's crown.
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    What will be truly interesting is the uptake of Tesla vehicles by China and Europe.
    If the outsider upstart can get a solid foothold with new plants in both locations,
    its stock price will go through the roof.

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    Re: Tesla overtakes Toyota to become world’s most valuable carmaker

    Quote Originally Posted by jpd80 View Post
    What will be truly interesting is the uptake of Tesla vehicles by China and Europe.
    If the outsider upstart can get a solid foothold with new plants in both locations,
    its stock price will go through the roof.
    Understatement of the year - the stock is already through the roof

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    I meant that the stock will go even higher and stay there...

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    Re: Tesla overtakes Toyota to become world’s most valuable carmaker

    Tesla just needs to keep innovating and improve quality. There is something to be said for some dude that thinks outside the box. Musk did in fact replace Jobs as the new Hudges

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    Things will get easier for Tesla once they have production facilities in the three biggest markets
    the weight of good will and increasing sales numbers will give Tesla a big boost from China and
    then Europe. Musk then has the option of stepping back and selling out for billions.

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    Re: Tesla overtakes Toyota to become world’s most valuable carmaker

    Quote Originally Posted by jpd80 View Post
    I meant that the stock will go even higher and stay there...
    I know (and what you wrote was clearly written), I just thought it was funny when I thought it's already through the roof.

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    Re: Tesla overtakes Toyota to become world’s most valuable carmaker

    Quote Originally Posted by jpd80 View Post
    Things will get easier for Tesla once they have production facilities in the three biggest markets
    the weight of good will and increasing sales numbers will give Tesla a big boost from China and
    then Europe. Musk then has the option of stepping back and selling out for billions.
    Be interesting if he does.

    Though, is a person like Musk better off selling, both for him and the world? He's great at generating ideas and making them happen, is running a mature company his thing? As Tesla grows and matures, his days will bog down with running the company vs. doing what he does best - bringing bold ideas to market. Let someone else run Tesla and focus on profitability, maybe the world will be a better place if he takes that money and goes to start another moonshot company.

    Though if Musk leaves I have no doubts that the stock will tank. Part of what people are investing is his vision... Which, in a way isn't good for a company to be that tied to one person.

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    Re: Tesla overtakes Toyota to become world’s most valuable carmaker

    Did I miss the part where Tesla developed a vaccine for Covid?

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    Re: Tesla overtakes Toyota to become world’s most valuable carmaker

    Quote Originally Posted by BlackGTP View Post
    Understatement of the year - the stock is already through the roof
    More like “its stock price will reach top of beanstalk levels.
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    Re: Tesla overtakes Toyota to become world’s most valuable carmaker

    Quote Originally Posted by Ed753 View Post
    Did I miss the part where Tesla developed a vaccine for Covid?
    You mean this one
    https://www.businesstoday.in/sectors...ry/408715.html
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    Re: Tesla overtakes Toyota to become world’s most valuable carmaker

    Quote Originally Posted by emh View Post
    I tell you, you cannot make this stuff up, must be a distraction from the main business

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    Re: Tesla overtakes Toyota to become world’s most valuable carmaker

    The stock is "through the roof" in comparison with other automobile companies because they do NOT provide the vertical instegration Tesla has.

    It's like GM owning the oil wells and the gas stations along with the cars.

    That's where the value is and probably as a result undervalued because they are still an up-and-comer. They have a long ways to go and many battles to be won before they (or he) can say "mission accomplished" and ride off into the sunset with billions.
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    Re: Tesla overtakes Toyota to become world’s most valuable carmaker

    Quote Originally Posted by GMOwner View Post
    The stock is "through the roof" in comparison with other automobile companies because they do NOT provide the vertical instegration Tesla has.

    It's like GM owning the oil wells and the gas stations along with the cars.

    That's where the value is and probably as a result undervalued because they are still an up-and-comer. They have a long ways to go and many battles to be won before they (or he) can say "mission accomplished" and ride off into the sunset with billions.
    I disagree. Yes, they are vertically integrated, but the future earnings from their vertical integration can't justify their share price, there is nothing to justify their current value. I'd say a market cap similar to BMW or Mercedes is reasonable price target for Tesla (Mercedes is around $45B) as they are a luxury make. Tesla's market cap being roughly 5x greater than Mercedes tells me that future expectations for Tesla are to make 5x the money, I don't see that happening, even once Tesla figures out all the profitability pieces of its operations.

    I wish success for Tesla as it is an American luxury brand that seems to be able to compete with the Euro's on a worldwide basis, something Cadillac and Lincoln are struggling to do. But their stock is way over valued.

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    Re: Tesla overtakes Toyota to become world’s most valuable carmaker

    Quote Originally Posted by BlackGTP View Post
    I disagree. Yes, they are vertically integrated, but the future earnings from their vertical integration can't justify their share price, there is nothing to justify their current value. I'd say a market cap similar to BMW or Mercedes is reasonable price target for Tesla (Mercedes is around $45B) as they are a luxury make. Tesla's market cap being roughly 5x greater than Mercedes tells me that future expectations for Tesla are to make 5x the money, I don't see that happening, even once Tesla figures out all the profitability pieces of its operations.

    I wish success for Tesla as it is an American luxury brand that seems to be able to compete with the Euro's on a worldwide basis, something Cadillac and Lincoln are struggling to do. But their stock is way over valued.
    Time will tell.

    My guess is that in the future, Tesla cars will "fuel" up in Tesla stations (if not at home with Tesla solar panels, roof tiles), GM cars will do the same, and all others will move in that direction with their own versions. Each station will be for fueling, farting, fixing, and feeding.

    The profit margin of a car will be peanuts from the margin made in the rest...
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