> AI, vertically integrated
This is true for most of the traditional auto companies, but they keep their self-driving divisions at arm's length and are more conservative with deployment into consumer vehicles. Tesla is starting to learn why. Just because it's a majority stake in a separate company doesn't mean it isn't vertically integrated.
> solar panel, vertically integrated [with car/AI]
Consumer: Why would I care that my solar panel and home battery are from the same provider as my EV and SDC? This is more like bundling than vertical integration, and it's not a bundling story that makes much sense to me as a consumer.
Biz: There is a solar+charge infra+EV van/truck play but Ford will win. Ford has a more compelling story here, because their Transit vans are best-in-class, the EV F-150 actually exists (and cybertruck will be an F-150 consumer competitor not a F-150 commercial competitor) and Ford has the SMB sales penetration and general knowledge. I don't see Tesla understanding this market before it's too late.
> battery, vertically integrated
This is the competitive advantage, but it's eroding quickly. The clock is ticking.
And let's not even talk about things like build quality or similar things.
Yes, battery and solar panels are a good additional business. But are they going to make strides better than companies who solely focus on those? Both of those are still high R&D efforts.
The more electric vehicles become commodity the less advantage they have. Tesla started with virtually no competition. Now Toyota and almost every other car manufacturer is a direct competitor.
It seems that Tesla increasingly provides vertically integrated mediocrity.
No they are not lol. Maybe in 2 specific cities you mean?
Honda's Asimo demo was also like 15 years ago. Their proof of advanced robotics is really old, yet the Tesla Bot can't do anything like the 2008 era demos.
It really doesn't matter. The value of a battery business, the value of a solar panel business - are tiny compared to Tesla's current valuation.
The world's #4 battery maker is Panasonic, and their entire business is only worth $20B. The world's #2 battery maker is LG Chem and their entire business is only worth $36B. And both Panasonic and LG Chem do a whole heck of a lot more than make batteries.
The second-biggest solar company in the world, Canadian Solar, has $3.2B in revenue and a market cap of $1.6B.
So if we staple these together:
- Valuing Tesla like Toyota gets us $20B.
- Adding in the world's #2 battery maker plus the entire rest of their chemical business get us $36B.
- Adding in the worlds #2 solar company gets us $1.6B.
That's $57.6B market cap vs Tesla's $500B. So another 90% downside to fair valuation assuming they're able to become as big in batteries as LG Chem and as big in solar as Canadian Solar.
"Vibes" don't make a $500B valuation target in 4% interest rate market. Sorry.
Tesla last year net profit: $5.5b; last quarter net profit: $3.3b.
Toyota last year net profit: $25b; last quarter net profit: $3.1b.
Toyota market cap: $200b
If you value Tesla based on annual profits, entirely ignoring realized and unrealized growth, They'd still have 23% valuation, $46b.
If you value Tesla based on quarterly profits, ignoring unrealized growth trajectory, they'd have similar valuation, $200b.
I think future growth in Tesla involves significant margin contraction as they move down market, and as more entrenched players enter the EV space we’ll see margins on existing revenue go down too. This is peak value for them based on first mover advantage alone and it won’t last.
So yeah bear case 90% overvalued and bull case 50% overvalued. And this is after a 62.5% drop from peak value.
I think you mean to say legacy automakers have been underpricing.
I haven't heard of a single legacy manufacturer selling their EVs for more than they cost to make (aside from vague predictions about future margin targets).
Before anyone says it: new Chinese EV makers are not "legacy."