Comment by startupfounder | Hacker News Reader

Comment by startupfounder | Hacker News Reader

Tesla isn't a car company, it's an energy company that is building the Model E on their energy platform. Reading their SEC 10-K[0] will show this.

Solar is 55% of all new installations in the USA and Tesla is the leader in solar installations with SolarCity. $/watt installed is only going down with scale.

Batteries are becoming the platform for transportation and Tesla owns 50% of the global manufacturing capacity. $/watt is also trending down with scale.

Charging stations will replace gas stations and Tesla owns a major percentage of the stock.

The question is over what timescale is Tesla over/undervalued? The genius is that there is always going to be friction between long and short term values. This shortsightedness is the weak link of Wall Street. But if it's overvalued then short the stock!

The Model E has already made Tesla an energy comany with a very successful product, "the Model 3 is selling more units in the U.S. than any comparably priced midsize sedan, including those offered by Mercedes-Benz, BMW, and Audi."[1]

I don't own a Tesla or Tesla stock.

[0] http://ir.tesla.com/static-files/0fbefe56-326c-412e-a33c-aa1... [1] https://www.bloomberg.com/news/features/2018-07-12/how-tesla...

> Solar is 55% of all new installations in the USA and Tesla is the leader in solar installations with SolarCity. $/watt installed is only going down with scale.

Uh... from all the reporting I've seen, SolarCity isn't a major factor in solar installation, and certainly not the leader.

From the 10-K, Tesla installed 523MW of solar capacity in 2017. The US alone installed 10,608MW of solar capacity in 2017. Assuming that Tesla is exclusively looking at the US market, Tesla is responsible for 5% market share... that is nowhere near the leader.

> Tesla is responsible for 5% market share... that is nowhere near the leader.

My understanding is that a market leader has the largest share among competitors, not a majority. If the next largest company only has 4.5% of the market, then Tesla/SolarCity is the leader.

That being said, if Tesla is the leader then competition is fierce and the market is ripe for consolidation.

First Solar sold 6GW of solar in 2017 in the US alone. Admittedly, that's not installed (current production capacity is around 3GW per annum), but their largest individual installation is 280MW, about half of Tesla's total production.

First Solar is merely the largest US-based solar company; some Chinese companies are even larger in terms of volume.

The solar installations market is broken down into residential (where SolarCity might be the leader), commercial (office parks) and utility scale.

Residential is the largest by quantity of installations, but when you look at the total production numbers, utility-scale easily blows everyone away https://en.wikipedia.org/wiki/List_of_photovoltaic_power_sta...

SolarCity was, until fairly recently, the leading residential solar provider (it's a crowded market, so leading doesn't mean a huge market share like it does in, say, the mobile OS market). For cash position reasons they pivoted away from leases, which cost them the lead to Sunrun, because leases are still a big part of the market.

> But if it's overvalued then short the stock!

To put the disclaimer up front: I have.

I think Tesla's going to run out of cash and be forced to raise on disadvantageous terms.

As a car company, they would be unbelievably overvalued. As an energy company, they would be wildly overvalued. As a solar company, they would be wildly overvalued. As a battery tech company, it's unclear, but probably still overvalued or wildly overvalued. I don't see how even that combination, along with the current and projected cash burn rate, lets them catch up to their current valuation let alone exceed it before needing to raise capital.

I love the tech, daily drive (a non-Tesla) electric, and hope EVs continue to grow in market share; I just don't see the company as being nearly worth the current market cap.

It's possible to see it as not wildly overvalued if you think that they will hold significant market share in all of those different markets.

That said, it's still hard to see how they can get there, considering that at present, they are the smallest mass-market car company by volume (if you want to call them mass market), a non-entity in the energy business, and a small player in an oversaturated solar market--and the synergy between solar and car manufacturing doesn't really exist.

2 words. Last one is Musk.

Here's the mental gymnastics I go through, and as it sounds like you have done some thinking on this, perhaps you have insight... if Tesla eventually reaches a point of desperation, isn't it reasonable to think they would sell to some better-capitalized party, at which point the stock would have value (in conversion to stock of the other party, if nothing else)? So, while it might currently be overvalued at ~ $300/share, if they succeed in their goals that will seem cheap, and if they fail you'll still more than get your money back out of it. Is that just misguided optimism on my part?

Tesla owns 50% of the current global manufacturing capacity.

By 2021, that'll be a single digit percent due to new Chinese plants coming online.

solar depends on cheap energy storage to ease out delivery spikes. batteries are NOT the right solution. things like compressed air, and even more dangerous alternatives are insanely cheaper than batteries in big volume.

tesla is making all the money they can now, when solar is a novelty for homes.

the second gov enters the game, chemical batteries will not be used. at all.

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