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There have been a few articles going round that BYD has or soon will have overtaken Tesla as the company that produces the most EV's worldwide.
From times of India

1703677746426.png


And here an older from the Washington Post.
1703677935204.png


The biggest hurdle for BYD is cracking the US market, butbthey plan to opn a plant in the USA this Fin year.
Mick
 

qldfrog said:
Yes no ice for byd, not sure they do hybrid
Click to expand...
BYD did make ICE up until march 2022.

Now they do Hybrids, Plug-in Hybrids and Fully Electric.

Their Best selling car is a Plug-in Hybrid, So comparing to Tesla is not a great comparison, Tesla sells more pure Ev's than BYD but only just they have similar sales.
 
ELON MUSK RESPONDS TO BYD PRODUCTION COMPARISON

Tesla CEO Elon Musk has responded to the comparisons being drawn by various media outlets regarding his company and high-powered Chinese rival BYD, which outpaced Musk's company in terms of production of electric vehicles in the fourth quarter of 2023.

Tesla is widely regarded as the world's leading electric vehicle company, and while that is true in terms of sales volumes in specific regions, like the United States and Europe, the automaker has had trouble keeping pace in China with domestic car companies.

China is the world's largest automotive market, and Chinese companies yield the biggest threat to Tesla's global dominance.

Musk has commended companies in the country in the past, recognizing their hard work and dedication.

Tesla's Chinese factory in Shanghai has routinely been the automaker's biggest producer of EVs and handles a lot of the European market's sales as it produces the Model 3.

Tesla's factory in Germany only produces the Model Y.

However, in the fourth quarter of 2023, BYD overtook Tesla as the world's largest producer of electric vehicles by volume

Tesla was still a larger producer of EVs in terms of the entire calendar year, but it is the first time any company has outpaced Musk's company on a quarterly basis.

Tesla hits 2023 delivery guidance of 1.8 million vehicles

A long-form communication on X from a Tesla fan shows the macro picture when comparing Tesla and BYD.

Tesla operates fewer factories, had a larger net profit, and has significantly fewer employees than BYD, but the Q4 narrative is enough for many media outlets to take the story and run with it.

Musk, on the other hand, had a simple response to the comparison between Tesla and BYD.

"Tesla is an AI/robotics company that appears to many to be a car company".

Tesla routinely recognizes itself as much more than a car company.

In fact, it operates energy products and builds batteries.

It also has an ongoing AI and robotics division, which is what Musk is talking about here.

Many people may think of cars when they hear Tesla, but the DNA of the company is much broader than just building cars and putting them on the road.

This is completely evident when discussing anything from the Full Self-Driving suite to the Optimus project that Tesla has been working on for a few years.

Cars might be the biggest and most recognizable part of the Tesla story right now, but Musk believes the company is much bigger and broader than that.

He's definitely right.

It will be something to see in the coming quarters how BYD and Tesla stack up in terms of the production of EVs.

While volume is a major contributor to Tesla's global dominance, it is just part of the picture.

Tesla has vehicles that are priced at a much higher premium than competitors, yet it routinely outpaces those companies that have cheaper products.

This is likely due to a number of factors, including the company's expansive charging infrastructure.
Click to expand...


 
JohnDe said:
Click to expand...

Hi John, can you give me any guidance iyo, or can anyone on this forum?
I need any help I can get investing with Tesla.
The reasons for it being my biggest SMSF investment is that it demonstrates to me the best of startup disruption and rapid evolvement plus it demonstrates the best of manufacturing with incredibly fast continuous improvement, cost reduction, productivity gains and direct access to the market. In terms of marketing it has data from every product, knowing the way its customers use their product in real time so it can forecast and innovate accurately being a software company. It also has the resources needed for expansion without the risk of being held to ransom or sidelined by venture capitalists. IMO the last time this happened was when Toyota dominated the other auto makers and this leap seems bigger and much better than that.
What I would value from this forum and possibly yourself is ideas about investment and trading patterns in regard to Tesla.
For product information I follow many Tesla fans on YouTube which is very helpful for keeping an eye on Tesla with points of difference, new product, analysis of the EV marketplace, futuristic predictions etc. I also listen to Cary Artec who produces videos on charting of the Tesla share price, I listen to Clear Value Tax for their analysis of the macro economic climate and as a result I decide when to sell my shares and when to buy again.
My aim is to increase my ownership of Tesla shares continuously via selling high and buying low. I believe Tesla is going to increase in price many times over the coming 5-10 yrs and I need to hold as much as possible by 2030 so I can enjoy retirement then. At present I run a small manufacturing business from home and work for another company casually.
It is not a foolproof system without risk, I have to consider all of the above advice and add my own thoughts, then take a plunge.
Could you comment please on what I do. I listen to other commentators as well, but not mainstream media, so I can develop a macro trend in general as I believe the Tesla share price is sensitive to the macro environment and will rise and fall with it if there is no other overriding factor. I also believe that Tesla shares are volatile and after a run up they generally take a dive down. I have to pick the possible maximum price to sell and later the possible lowest price to enter again. I divide my holdings into six and begin selling as the price goes up past my average selling price until I have sold all, then later I once again reinvest in six steps trying to cover the bottom.
At present I believe shares are close to their high and will decline over the next five or so months before rising sharply again.
Are there charts or systems that you think I could follow to help?
Can you see any big pitfalls?
 
pozindustrial said:
Hi John, can you give me any guidance iyo, or can anyone on this forum?
I need any help I can get investing with Tesla.
The reasons for it being my biggest SMSF investment is that it demonstrates to me the best of startup disruption and rapid evolvement plus it demonstrates the best of manufacturing with incredibly fast continuous improvement, cost reduction, productivity gains and direct access to the market. In terms of marketing it has data from every product, knowing the way its customers use their product in real time so it can forecast and innovate accurately being a software company. It also has the resources needed for expansion without the risk of being held to ransom or sidelined by venture capitalists. IMO the last time this happened was when Toyota dominated the other auto makers and this leap seems bigger and much better than that.
What I would value from this forum and possibly yourself is ideas about investment and trading patterns in regard to Tesla.
For product information I follow many Tesla fans on YouTube which is very helpful for keeping an eye on Tesla with points of difference, new product, analysis of the EV marketplace, futuristic predictions etc. I also listen to Cary Artec who produces videos on charting of the Tesla share price, I listen to Clear Value Tax for their analysis of the macro economic climate and as a result I decide when to sell my shares and when to buy again.
My aim is to increase my ownership of Tesla shares continuously via selling high and buying low. I believe Tesla is going to increase in price many times over the coming 5-10 yrs and I need to hold as much as possible by 2030 so I can enjoy retirement then. At present I run a small manufacturing business from home and work for another company casually.
It is not a foolproof system without risk, I have to consider all of the above advice and add my own thoughts, then take a plunge.
Could you comment please on what I do. I listen to other commentators as well, but not mainstream media, so I can develop a macro trend in general as I believe the Tesla share price is sensitive to the macro environment and will rise and fall with it if there is no other overriding factor. I also believe that Tesla shares are volatile and after a run up they generally take a dive down. I have to pick the possible maximum price to sell and later the possible lowest price to enter again. I divide my holdings into six and begin selling as the price goes up past my average selling price until I have sold all, then later I once again reinvest in six steps trying to cover the bottom.
At present I believe shares are close to their high and will decline over the next five or so months before rising sharply again.
Are there charts or systems that you think I could follow to help?
Can you see any big pitfalls?
Click to expand...

I’m on my holiday break at the moment, but can offer you this resource -

ark-invest.com

ARK’s Expected Value For Tesla In 2027: $2,000 Per Share

ARK’s price target for Tesla is $2,000 per share in 2027 with our bear and bull cases valued between ~$1,400 and $2,500 per share in 2027.
ark-invest.com ark-invest.com

Tesla is a long term hold for me, I started purchasing pre Covid and top up during a few of the lows.
 
JohnDe said:
I’m on my holiday break at the moment, but can offer you this resource -

ark-invest.com

ARK’s Expected Value For Tesla In 2027: $2,000 Per Share

ARK’s price target for Tesla is $2,000 per share in 2027 with our bear and bull cases valued between ~$1,400 and $2,500 per share in 2027.
ark-invest.com ark-invest.com

Tesla is a long term hold for me, I started purchasing pre Covid and top up during a few of the lows.
Click to expand...
Thanks John, I also follow Cathy Wood.

Apparently this is an Elon quote

“Since I’ve been asked a lot:
Buy stock in several companies that make products & services that *you* believe in.

Only sell if you think their products & services are trending worse. Don’t panic when the market does.

This will serve you well in the long-term.”

| Elon Musk

I think Tesla makes a few products that I believe in so one share is almost ‘diversified’.



Sent from Proton Mail for iOS
 
pozindustrial said:
Thanks John, I also follow Cathy Wood.

Apparently this is an Elon quote

“Since I’ve been asked a lot:
Buy stock in several companies that make products & services that *you* believe in.

Only sell if you think their products & services are trending worse. Don’t panic when the market does.

This will serve you well in the long-term.”

| Elon Musk

I think Tesla makes a few products that I believe in so one share is almost ‘diversified’.



Sent from Proton Mail for iOS
Click to expand...

I found this interesting

Chamath Palihapitiya, Social Capital Founder and CEO and former Facebook executive, revealed that he sold his Tesla position last year. Palihapitiya has been bullish on Tesla for some time but exited his bet after last year’s stratospheric rise in Tesla shares. The high prices allowed him to generate cash to fund his other ideas.​
Palihapitiya had said in January that he believed that Tesla could easily double or triple again in stock value due to its “distributed energy business” and the upcoming changes in energy infrastructure towards cleaner energy. While Palihapitiya said he was somewhat wrong about Tesla’s growth opportunities, as he “completely underestimated” the EV market, he was still bullish on Tesla’s growth.​
“When you see it now, the market has flipped. ... Tesla will be very busy just being a best-in-class EV company,” he said.​
But while Palihapitiya has expressed his confidence in Tesla, many others are not so sure about the Elon Musk-led company. Michael Burry, the legendary investor who predicted the real estate bubble collapse of 2008 and made $800 million off of it, has put options on 1.1 million shares of Tesla worth $731 million at the end of June. The put options from Burry’s Scion Asset Management are based on a bearish bet where if the price of Tesla shares falls before the expiration of the put contract, they stand to earn considerable profits.​

 
I see it as the best vehicle manufacturer globally in terms of quality across software, build and performance and the best in lowest cost manufacturing. That is almost enough for anyone to invest, but I see that now as a given that will be maintained and the rest of the company poised to dominate again in energy, AI, data, robots and FSD.
I am also convinced the economy will dive this year up to June and Tesla shares with it. Hopefully I will be right and brave enough to hold out on buying again as it heads down. If it increases strongly in price I will be screwed.
 
pozindustrial said:
I see it as the best vehicle manufacturer globally in terms of quality across software, build and performance and the best in lowest cost manufacturing. That is almost enough for anyone to invest, but I see that now as a given that will be maintained and the rest of the company poised to dominate again in energy, AI, data, robots and FSD.
I am also convinced the economy will dive this year up to June and Tesla shares with it. Hopefully I will be right and brave enough to hold out on buying again as it heads down. If it increases strongly in price I will be screwed.
Click to expand...
I share generally similar ideas
 
pozindustrial said:
I see it as the best vehicle manufacturer globally in terms of quality across software, build and performance and the best in lowest cost manufacturing. That is almost enough for anyone to invest, but I see that now as a given that will be maintained and the rest of the company poised to dominate again in energy, AI, data, robots and FSD.
I am also convinced the economy will dive this year up to June and Tesla shares with it. Hopefully I will be right and brave enough to hold out on buying again as it heads down. If it increases strongly in price I will be screwed.
Click to expand...

Agreed, though I have not sold any in the past several years.

Another long term investment that I like is ARK Innovations. There are different investment options. I chose ARKK at the low point a few years ago, and have watched it steadily grow. I like their involvement strategy -

ARK’s thematic investment strategies span market capitalizations, sectors, and geographies to focus on companies that we expect to be the leaders, enablers, and beneficiaries of disruptive innovation. ARK’s strategies aim to deliver long-term growth with low correlation to traditional investment strategies and are offered in a variety of vehicles.​
 
pozindustrial said:
I believe those BYD figures include ice and hybrid vehicles with Tesla way ahead on battery electric vehicles.
Click to expand...

Well spotted, a true investors eye.

Chinese car giant BYD has announced it has reached a production milestone of six million "new energy" – plug-in hybrid and solely electric – vehicles.

However is yet to catch Tesla in production of purely battery-powered vehicles, as the US car maker built its five-millionth solely-electric car earlier this year.

Tesla still sells more electric vehicles than BYD but the gap is closing, with the US electric-car giant delivering 435,059 vehicles in the third quarter of 2023 (July to September), compared to 431,603 BYDs.

www.drive.com.au

China's BYD builds six-millionth hybrid or electric vehicle

BYD is the first car maker to reach production milestone of six million electric vehicles, ahead closest rival Tesla.
www.drive.com.au www.drive.com.au
Click to expand...

What many people don't know is what you have pointed out before; Tesla is more than a car company and they have the lowest cost production.
 
JohnDe said:
Well spotted, a true investors eye.



What many people don't know is what you have pointed out before; Tesla is more than a car company and they have the lowest cost production.
Click to expand...
According to Teslas own sales figures , tesla sold around 1.81 million cars in 2023, all pure electric.

According to BYD's own sales figures , BYD sold a bit over 3 million units, all either pure electric or hybrids,
According to ArenaEV , all electric EV's contribution to the 3 million sales was just over 1.57 million vehicles, so yes the Tesla did sell more pure EV's than BYD.

BYD is also more than a car company, like Tesla it produces batteries.
From ArenaEV

1704758690758.png

Mick
 
mullokintyre said:
According to Teslas own sales figures , tesla sold around 1.81 million cars in 2023, all pure electric.

According to BYD's own sales figures , BYD sold a bit over 3 million units, all either pure electric or hybrids,
According to ArenaEV , all electric EV's contribution to the 3 million sales was just over 1.57 million vehicles, so yes the Tesla did sell more pure EV's than BYD.

BYD is also more than a car company, like Tesla it produces batteries.
From ArenaEV

View attachment 168532
Mick
Click to expand...
It also does EV buses..and their taxi fleet was kind of specific purposes car.
 
mullokintyre said:
According to Teslas own sales figures , tesla sold around 1.81 million cars in 2023, all pure electric.

According to BYD's own sales figures , BYD sold a bit over 3 million units, all either pure electric or hybrids,
According to ArenaEV , all electric EV's contribution to the 3 million sales was just over 1.57 million vehicles, so yes the Tesla did sell more pure EV's than BYD.

BYD is also more than a car company, like Tesla it produces batteries.
From ArenaEV

View attachment 168532
Mick
Click to expand...

Tesla is more than a car company, and that is why their valuation is higher than their competition.

Tesla’s market capitalisation today of U.S.$777 billion is more than the combined market capitalisation of the next eight biggest manufacturers, including (in descending order) Toyota, Porsche, BYD, Mercedes Benz, VinFast Auto, BMW, Volkswagen, and Ferrari.​

You're looking at the obvious and missing the bits behind it.

But like any company involved in disruptive technologies, profits and share prices can fall. Will that happen to Tesla? Maybe, but I think that the older and more established they become the less likely.

Tesla revenue goes beyond electric vehicle sales. Here's how the automaker generates revenues

The Tech Revolution Of Tesla: Why It's Worth The Investment

BYD may have sold more vehicles, but where did they get their technology from, what is their profit margin, what other revenue do they bring in?

Tesla Bulls and Bears might want to look at Tesla as more than just a car company or risk missing out on a valuation trend.

Wedbush analyst Dan Ives looked at Tesla (ticker: TSLA) on a sum-of-the-parts, or SOTP, basis Friday. SOTP valuation tries to look at, and value, the separate businesses within a company to see if there is a big difference between business valuations and where the stock is currently trading.

Recently, Wall Street has gone through a similar exercise with General Electric (GE), 3M (MMM), and Alibaba (BABA). Those companies are either spinning out assets or have announced plans to shake things up.

Tesla isn’t breaking apart, but things are happening. Tesla has signed deals with several automakers opening up its supercharging network to non-Tesla EVs. That forced investors, and the Street, to value the company’s EV charging network.

Along with the charging business, Ives sees separate AI, battery, and energy businesses inside Tesla, along, of course, with its car business.

Tesla uses AI to train its self-driving features. Elon Musk hopes his self-driving software will get good enough to turn all existing Tesla vehicles into self-driving robotaxis with, essentially, the flip of a switch. Musk also hinted that Tesla could license its self-driving software to other automakers, at the second-quarter conference call

Tesla also sells battery storage products to consumers and utilities. That business grew more than 220% year over year in the second quarter of 2023. Tesla also makes some of its own batteries. There is good money in batteries. The world’s largest battery maker Contemporary Amperex Technology Co Ltd (300750.China), which is better known as CATL, has a market capitalization of about 1 trillion Chinese Yuan, or about $137 billion.

“Musk & Co. have developed a diverse portfolio of products,” wrote Ives. Tesla’s battery production represents lower costs for the auto business, he says, adding Tesla’s self-driving software products have logged more than 150 million miles of driving. AI is helping those systems get better faster. “Tesla’s implementation of AI within its continuous rollout of new [self-driving] software updates provides an opportunity to expand its [addressable market] with full autonomy becoming an increasing focus.”

It’s a bullish outlook and SOTP valuations can come into and out of favor based on what’s going on at a company. What’s more, Tesla still makes, essentially, all of its money and free cash flow from selling cars.

Ives is a Tesla bull though, rating shares Buy. His price target is $350 a share, one of the highest on Wall Street. That worked out to about 73 times his 2024 earnings estimate of $4.80 a share.

Overall, 39% of analysts covering the company rate shares Buy. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. The average analyst price target is about $254 a share. That price works out to about 53 times the consensus 2024 estimate of $4.78 a share.

www.barrons.com

Tesla Is More Than Just a Car Company, for This Bullish Analyst.

Tesla isn't breaking apart, but things are happening which investors need to consider to avoid missing out on a valuation trend.
www.barrons.com www.barrons.com
Click to expand...

In the ever-evolving landscape of the automotive industry, few companies have captured the world’s attention quite like Tesla. Thirteen years ago, electric cars were synonymous with virtue signalling rather than high-performance excitement. However, Tesla disrupted this perception, transforming electric vehicles into something thrilling and aspirational. Its journey, from a modest initial public offering (IPO) in 2010 to a valuation exceeding $1 trillion in 2019, has been nothing short of remarkable. Yet, recent stagnation in Tesla’s stock price has prompted a critical question: Is Tesla still the visionary pioneer it once was, or is it merely becoming “just another car company”?

A background to Tesla

Thirteen years ago, in 2012, hybrid electric cars were unsexy and uninspiring. Think of the Toyota Prius here in Australia, or the Chevrolet Volt and Nissan Leaf in the U.S. These were virtue-signaling vehicles designed without mass appeal in mind. Manufacturers also had a vested interest in their legacy internal combustion engine (ICE) models and weren’t tooled up for mass adoption of electric vehicles (EV).

Tesla changed all that, first delivering exciting luxury cars that also happened to be fast and battery-powered, before widening the appeal by launching more affordable models that were also powerful and equally good-looking.

Around thirteen years ago, a small company called Tesla Motors (NASDAQ:TSLA) launched its initial public offering (IPO) on the NASDAQ stock exchange, raising a total of U.S.$226.1 million at a (split adjusted) share price of U.S.$3.40. Three years later, in 2013/14, Tesla transitioned from being essentially a start-up with highly uncertain survival prospects to being a credible auto business, redefining public expectations around electric vehicles with its introduction of the Model S, and in 2013, generating its first quarterly profit.

Excitement in the stock market for Tesla, however, was arguably greater. Between 1 January 2013 and 1 January 2014, consensus full-year earnings forecasts for Tesla were revised up sharply, with 2015 net income forecasts moving from U.S.$247 million to U.S.$432 million and 2016 net income forecasts moving from U.S.$415 million to U.S.$784 million.

The less-than-doubling of earnings expectations however, resulted in a 10-fold increase in the share price as the discount associated with doubts about the company’s survival unwound.

Tesla’s profits fell well short of those forecasts, with the company reporting a net loss in 2015 of U.S.$889 million and another net loss in 2016 of U.S.$773 million. Yet the market’s excitement didn’t wane. The share price gains didn’t continue, but the price gains didn’t reverse either. Profitable hopes were simply deferred.

At the start of 2015, Tesla commanded a market valuation of close to U.S.$30 billion, well short of the value ascribed to the world’s largest automakers, but still around half that of Ford and General Motors.

It wasn’t until 2019 that the fortunes of Tesla started to take off, with its shares jumping from U.S.$12.65 in May 2019 to a split-adjusted U.S.$409.97 on November 04, 2021, and a market capitalisation of over U.S.$1 trillion.

In mid-2020, Tesla achieved four consecutive quarters of positive net income for the first time in its history, and over the prior 12 months consensus net income forecasts for Tesla increased substantially. The 2021 forecast increased to U.S.$3.15 billion from U.S.$1.72 billion, and the 2022 number rose to $5.03 billion from $3.44 billion. This less-than-doubling of earnings forecasts had driven another 10x share price move.

Tesla today

Today, however, the share price is roughly where it was almost three years ago. If the gas has been let out (pun intended) of the share price’s ascent, it begs a question: what if Tesla is just another car company?

Tesla is still the market leader in battery-powered electric car sales in the U.S., with a market share of above 60 per cent, and the company’s flagship Model 3 is the best-selling EV model in the U.S..

Meanwhile, Tesla’s market capitalisation today of U.S.$777 billion is more than the combined market capitalisation of the next eight biggest manufacturers, including (in descending order) Toyota, Porsche, BYD, Mercedes Benz, VinFast Auto, BMW, Volkswagen, and Ferrari.

Not unlike Apple, Tesla has adopted a closed-ecosystem approach to its products, owning the cars, the servicing, and the charging directly, setting it apart from other manufacturers. But does this deserve the hefty multiple placed on the company’s earnings that renders it as valuable as the world’s next eight biggest manufacturers?

Investors can buy Toyota for $22,000 per vehicle sold in 2022, BMW for $27,825, BYD for $53,800 per vehicle sold, or they can buy Tesla for nearly U.S.$591,000 per vehicle sold.

The economics between Tesla and every other car manufacturer in the world, in the long run, might be slightly different. Still, they cannot be sufficiently dissimilar to justify such a disparity in either absolute market capitalisation terms or in relative terms.

Despite a share price today that is 40 per cent below its all-time high, enthusiasm for the world-changing potential of EV technology has clearly translated to an equally transformative approach to stock market valuation for Tesla.

What investors are forgetting, however is that Tesla will ultimately be a car company.

As competitors catch up, the competitive advantage of Tesla will erode. Meanwhile, any differences in the economics of car manufacturing between Tesla and its rivals will also diminish as more of each brand’s fleet moves to electric. In time it will be harder to justify such a disparity between Telsa’s market valuation and that of its competitors.

Ten reasons why the differences will narrow

Increased competition: As we have written about many times, an increasing number of automobile manufacturers, including traditional giants and EV startups, are producing electric vehicles that compete directly with Tesla’s lineup. Brands like Ford, Rivian, Lucid, and Chevrolet have rolled out new electric models that, in some cases, outperform Tesla in terms of range, performance, and looks (the latter being subjective of course). And while the market for EVs overall is growing, Tesla’s dominance in EV market share in the U.S. has already slipped from 72 per cent to 62 per cent in just the first year of rising competition and brand choice.

Meanwhile analysts believe Telsa’s market share could fall to as little as 18 per cent by 2026 from 78 per cent in 2018.

Ageing product line: Tesla first new passenger vehicle model in three years is the just released updated Model 3. This ‘stagnation’ in model releases provides competitors with an opportunity to entice potential Tesla customers with newer and potentially more advanced options resulting in Tesla losing further share.

Struggles in key markets: China, the world’s largest auto market, has been a significant growth engine for Tesla. However, the company has experienced a softening in demand in China. Local competitors, of which BYD Co. is the largest by no means alone, are making significant strides, offering a more diversified range of models that cater to various price points. Critics in China suggest Tesla does not fully understand the preferences of Chinese consumers.

Marketing and branding issues: Tesla’s decision to offer discounts to boost sales is a departure from its earlier stance, indicating potential demand challenges and lower margins. Furthermore, Elon Musk’s controversial takeover of Twitter Inc. has affected Tesla’s brand perception, pushing some potential buyers away.

Distracted Elon Musk: Many shareholders are concerned that Elon Musk, the driving force behind Tesla, has been distracted with his acquisition and management of Twitter, now called X. Such diversions annoy analysts who believe they could impact Tesla’s strategic directions and operational efficiency.

Share price malaise: Tesla’s share price is unchanged from almost three years ago, suggesting investors are acknowledging the challenges Tesla faces and waking up to the reality of the long-term economics of manufacturing cars.

Inability to meet growth targets: Despite aggressive scaling efforts, Tesla is falling short of its annual growth targets. With a 40 per cent annual growth rate in 2022 compared to 87 per cent in 2021, the company’s exponential growth might be plateauing if Elon Musk’s target of two million vehicles in 2023 is not met.

Shifting strategies: Elon Musk’s statement back in July 2021 that the “goal is not to be a car company” suggests a broader and potentially more diffuse focus and remains a reminder for analysts who focus too closely on the company’s position and growth in the automobile industry.

Over-reliance on existing models: Rather than diversifying its lineup, Tesla is focused on scaling up and churning out as many of its existing models as possible. This strategy is at odds with conventional (and capex intensive) wisdom that releases new models almost annually. The traditional auto industry belief is car makers need to offer a wide range of updated and more advanced models to keep buyers interested and part of their brand ‘family’.

Valuation metrics: At September 2023 Tesla is trading at 63.1 times trailing twelve-month (TTM) earnings. This compares to 120 times at the end of 2021. At either measure the price-earnings (PE) is a market valuation more typical of high-growth tech companies than a car manufacturer.

Conclusion

If Tesla does indeed become ‘just a car company’, the sharp drop in PE will continue and reflect a growing realisation in Tesla’s growth prospects, its position in the auto industry, and its economics are less exciting than once believed.

Tesla remains a global leader in the EV market with strong fundamentals, however, there are clear signs that it faces increasing challenges from competitors, potential demand issues, and market sentiment shifts. The lofty valuations and hype surrounding the company needs to be re-evaluated considering these inescapable realities.

ROGER MONTGOMERY « Re-inventing the way you invest

rogermontgomery.com rogermontgomery.com
Click to expand...

When investing your hard earned money, Always do your own research.
 
Regarding BYD in China their vehicle Ave price is heaps less than Tesla so they should be selling multiples of Tesla numbers, but instead they are way behind with battery electric vehicles. With no advertising or dealers the organic growth of Teslas is nothing short of amazing. Globally too, not just China. Tesla future looks very good to me. Fingers crossed.
 

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