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Comment by stymaar | Hacker News Reader

The big problem for Tesla is that they cannot sustain their valuation from the car manufacturing business. There's a perpetual need to justify why Tesla should be valued an order of magnitude more than other automakers. Selling the dream of future profit is Tesla's main business.

(For the record Tesla makes roughly 10% of Toyota's profits and has almost 3 times the valuation, no Tesla shareholder is ready for a 97% share price drop so Tesla has to keep the dream machine at full steam).

Edit: Tesla is 3 times Toyota in valuation, not 5 as I said earlier, not that it changes the argument much.

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I don’t know, I think at this point the Tesla stock doesn’t have a link with the company anymore and behaves like any meme coin or collectible token. Like in crypto there is some vague narrative about a crazy future but ultimately the point is only to drive further speculation ("buy it before you’re priced out/join the elite crowd that’ll own the future/etc."). The genius of Elon is having realized (I’d say around the time he tested the ground with pumping dogecoin) that in a stock market where investors don’t buy for dividends but only price speculation the underlying business doesn’t really matter, only the narrative does. Dividends are the only link with the real business, without them the price is only a function of the demand, and what Elon has achieved is maintaining demand through narrative, like in crypto, irrelevant of the company results.

The parallel with crypto is very strong indeed.

You can laugh at it, and most likely it will crash and burn.

But at the same time, maybe they are doing the correct analysis.

"If we stay here and grow fat the others will eat us. To infinity and beyond!".

100 years ago your business was your warehouse or your locomotive. These days, maybe your business is defined by your rate of change?

> These days, maybe your business is defined by your rate of change?

This is the most absurd and also true observation I've read on HN in a while.

As the rate of technological process accelerates, maybe it becomes possible to justify a company's valuation on a never-ending succession of "And then..."s.

Granted, that ended poorly in terms of stock prices for the .com bubble, but mostly for companies that weren't financially solvent enough to withstand higher interest rates + a public market downturn.

And it took a conflation of multiple events to pop that bubble (Asian instability, moderate US interest rate hikes, 9/11/2001).

You should probably compare revenue instead of profit because Tesla and Toyota are at very different places in their development.

But Toyota still makes 3x Teslas revenue.

I'm guessing some of the 9x difference is speculative and some is because Tesla is all in on EVs/etc, which are doing well, and Toyota is still very much in ICEs, which aren't doing as well.

> "Edit: Tesla is 3 times Toyota in valuation, not 5 as I said earlier, not that it changes the argument much."

Per Google finance, Tesla's market cap today is $1.42T. Toyota's is ¥48.72T, or $307B USD. So that would make Tesla's valuation about 4.6 times Toyota's.

Sure and Toyota [1] has significantly more outstanding bonds than Tesla [2] which should depress it's market cap.

[1]: https://www.tradingview.com/symbols/TSE-7203/bonds/

[2]: https://www.tradingview.com/symbols/NASDAQ-TSLA/bonds/

Of course thank you, Idk how my brain farted when I did the double check…

Tesla and Space-X.

Until the merger with xAI, spaceX was actually a decent company with a very solid business, a clear technological edge and clear growth perspective. It shouldn't be a trillion dollar company of course, but it should have been a cash cow capturing all the value from its niche market.

Not anymore, I guess.

But not with the valuation it currently has.

The only reason why Payload into space increased from 1000t to 3000t is Starlink.

And there they have also massive problems for scaling. Base Station is expensive and they have to replace the Satelites every 5 years. Withouth the v3 and rocket big enough to send it up, they can't scale properly.

If they then scale, the rate of atmosphere poisening through STarlink will increase.

SpaceX's central flywheel is: (1) identify an unserved, profitable need for mass-produced space launch and create that product, (2) design, iterate, and scale production of a rocket that can do that, & (3) GOTO 1 at the next mass scale.

Starlink was the seed customer for unused gen1 launch capacity.

Space datacenters are probably intended to be the gen2 seed.

Because SpaceX needs to frequently toss rockets up to be able to iterate on them and scale manufacturing, and they'd rather use the (high-risk) payload capacity for something profitable while doing that.

But as a net result, SpaceX can afford to launch mass that others can't, because it wins two ways: whatever profits that launched mass produces + iterating rocket design and manufacturing.

SpaceX and Tesla are just another form of the Star Citizen phenomenon.

That's an awesome analogy, I'm stealing it right away.

"Irrational exuberance" is, I believe, the most concise description.

They are a battery company. The cars are just a way to sell batteries.

The cars are actually a way to drive yourself around town. Yes they also contain batteries.

Very expensive batteries compared to the competition

The comparison is actually even worse if you compare it to other companies on the battery sector. How is Tesla supposed to be five times more than CATL ffs?

> "They are a battery company."

Not really. Tesla, like most automakers, purchases most of its battery cells from other companies (Panasonic, CATL, LG Chem). In recent years they have started to manufacture their own cells as well, with their 4680 cell manufacturing line at "Giga Texas". But this is a small portion of the cells they use globally.

That's interesting cause FY2025 had them do about 14 billion in battery/energy products (revenue). With auto being a little over 60 billion. The energy products seem to be growing in volume though

Didn't tesla got a bunch of US government money to install superchargers everywhere? Wouldn't that be under 'energy product'?

Yes, "Energy Products" refers to Tesla's energy storage products (home Powerwalls and industrial-scale "Megapacks"). Tesla manufactures these packs using battery cells they buy from 3rd parties. Tesla's value is added in the pack design, software, inverter electronics, branding, etc.

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