Tesla, the electric vehicle manufacturer is trading at a market capitalisation of 845 billion USD.
Only until recently Tesla was valued at 1 trillion USD by public markets.
According to my estimates, Tesla's intrinsic value is 120 billion USD.
Tesla is unprofitable if one takes out government subsidies and current accounting of future orders.
The electric vehicle technology is simply unprofitable at the current state of science.
Tesla is not likely to turn profitable in the next 5-7 years. But its electric vehicle production technology has value, which I estimate at 120 billion USD.
4 comments:
What year did you actually write this. Tesla is profitable now and is undervalued. I'd get our of your short position before the stock splits tomorrow.
But if electric vehicles subsidies are excluded and the initial downpayments are not accounted for as payments for the whole Tesla vehicle, will Tesla be profitable?
Yes, as they approach 25% gross margins on each car, they are profitable without carbon payments or per vehicle subsidies. As the subsidies will be renewed, they will be even more profitable for the next 2-3 year. Every EV produced by any manufacturer will be sold for the next 5 years, so demand is also a non-issue. Overvalued makes not sense when the whole world is moving to electrification and they have no legacy cost to absorb and no debt.
Actually, I doubt it.
Without a technological breakthrough, the proverbial quantum leap electric vehicles manufacturing is loss making, simply it is not profitable.
Because too much ferrous metals are used mainly in the electric cars' batteries, which precludes achieving a reasonable price for both the medium, intermediate and upper end luxury car markets, which would achieve profitability for Tesla, Volkswagen, BMW, Rivian or whatever.
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