When will $TSLA become the most valuable company in the world?

[kishac]

Originally Posted by Thatsright19

The fastest scaling in the history of the auto industry? Now that’s funny.

Post#30
https://www.city-data.com/forum/hist...fastest-3.html


I’d suggest that their share of the auto market pie is so small that their customers are at the point still where they have enough loyalty to wait. The average consumer doesn’t care about much more than having a safe, reliable car that’s priced right car. If they had enough of the market share, they would simply lose share as people would buy from anyone who could meet their demand. Not being able to meet demand is a reflection on Tesla’s management, whether you choose to gloss over it or not.

There’s 15 million units sold domestically. BMW is like 300k of them. There’s almost 70 million units sold per year globally.

Somehow Tesla is valued at more than the next what 9 global automakers combined? I don’t know where it sits today, but at one point it was more than the big 3 auto makers combined…by a factor of 3.

You let me know when a soft drink company with a few percentage points of market share gets valued in multiples of pepsie and Coca Cola. I can’t even think of an example in any industry, ever that’s this egregious.

Demand can be met with pricing adjustments. If there’s a long line of customers then that means the price is too low. If a Mercedes’ was available for $20k brand new then there would be a long line of that as well. So this simply means that tesla vehicles are still priced too low relative to its product superiority and brand recognition.

As for tesla becoming the most valuable company in the world, I don’t know. But can it become a 1.5-2T company? Yes, maybe even by next year. Maybe later, but just a few years later. Macro economic factors are at play too and a high interest rate environment will adversely affect teslas valuation. I do think that a 6-8 million car annual production is attainable for Tesla by 2030. If the market in 2030 allows for earnings multiples of just half of what we have now (or if teslas margins get cut in half), then Tesla should get in the 2-3trillion dollar valuation range if it can hit the 6-8 million vehicle annual production. Elon is aiming for 20 million cars annually by 2030 but I personally don’t find that realistic, especially for the timeframe he is touting.

The next 9 global automakers are saddled with legacy costs that Tesla does not have. I spilled tons of ink on that subject all over city data for the past several years so I won’t belabor the point here. . The market is basically predicting that legacy automakers are facing a grim future, hence the depressed valuations of those companies.

[Thatsright19]

I’m talking about profit leakage by not being able to meet demand for your product because of supply chain and production issues.

It’s pretty simple that in any CVP analysis, there’s a point in that relevant range, where you maximize profit.

It’s not doing that to simply say we’ll raise prices higher to the point there isn’t a waiting list.

McDonald’s could have stopped at 100 stores and turned up the price of a meal to $12 to “meet demand”. No one would have thought that was a good idea.

Also, it’s absolutely worthless to say you’ll produce 20 million vehicles by 2030 without an actionable plan to get there.

[kishac]

Originally Posted by Thatsright19

I’m talking about profit leakage by not being able to meet demand for your product because of supply chain and production issues.

It’s pretty simple that in any CVP analysis, there’s a point in that relevant range, where you maximize profit.

It’s not doing that to simply say we’ll raise prices higher to the point there isn’t a waiting list.

McDonald’s could have stopped at 100 stores and turned up the price of a meal to $12 to “meet demand”. No one would have thought that was a good idea.

Also, it’s absolutely worthless to say you’ll produce 20 million vehicles by 2030 without an actionable plan to get there.

Yes, the 20m vehicle goal sounds like wishful thinking on Elons part. That’s why I mentioned being doubtful about it and used the 6-8 million vehicle estimate on my previous post. At this point we can get a rough estimate on the time it takes to build and ramp a new gigafactory. I’ve read that the four current gigafactories can collectively increase output to 3m vehicles per year. Since 2030 is 8 years away, Tesla should be able to build another handful of gigafactories by then. It’s a tough task but they demonstrated their capability to scale at that rate.

Just like the service center argument I’ve made against tesla bears on city data forums, the ramping of production will take time, just like it took McDonald’s time to expand their franchising.

By the way, while I am a tesla bull, I remain skeptical on some of Elons claims. I don’t think robotaxi is something possible for the next 5 years. There are a zillion variables in navigating city streets so I just don’t see that happening for a long time.