Watis wrote:odysseus2000 wrote:Tesla is currently making about 4x450,000 = 1.8 million cars per year, with neither a pickup or a small car, both these latter cars are coming and the Tesla semi is ramping. VW have no obvious growt: increasing BEV decreases ice sales.
VW is making over 9 million, giving a clear indication that they are still a predominant combustion engine maker despite their increased BEV & PHEV sales.
VW may only be a relatively short distance behind Tesla in BEV car numbers, but of a much larger pie & their cars are much slower, plagued by problems with troubled over the air updates & do not have the cool factor of a Tesla. If they were any good they would be very popular, but they have nothing comparable to the y.
Comparing Tesla to msft is unfair. Sure msft have potential huge sales coming with copilot, but as of yet whether it arrives is unclear. All we know is that they have spent a lot of money with openAI, but they have not raised guidance. Meanwhile Nvidia which many see as the poster child for ai has sold off from a forward pe of 80 ish to around 30 now. AI is an unknown that may be worth trillions or flop, no one knows. I expect trillions, but as of yet AI at the gpt level is not good enough to reach its possible potential, so the big AI players do not have the high multiples that will come if AI does become important.
In terms of China who knows. Chinese bev are apparently selling well, but there are repeated reports of fields of registered bev being left to rust. The economic narrative for China is controlled by their politicians, but the mood music is one of an economy troubled by high debt, much similar to the problems that brought down Japan. Additionally are Chinese cars good enough for Western markets. They are low cost in China so if they start to sell in Western markets the volume makers like VW will get hurt, whereas Tesla has currently no low cost offering that will be hurt by Chinese imports.
All of this analysis sits within macro forces of high interest rates & global conflict in a huge secular trend away from combustion and to electric traction, a technology greatly superior in performance, longevity, efficiency & low pollution.
The company most well positioned to ride these trends is Tesla. Legacy auto is all in serious trouble & so it is not unreasonable to give Tesla a high multiple.
The Tesla multiple has nothing in it for FSD & Optimus as most believe neither will work. Should it become clear that one or both does work then I expect Tesla’s forward multiple to surge.
In the meantime the game is survival as high interest rates & global conflict create head winds. Tesla have cut prices to maintain demand & are doing extraordinarily well given they have no low cost vehicle whereas Toyota are being murdered, Ford & GM are at loggerheads with unions & VW & the rest of German auto are in denial about BEV.
I remain extremely bullish on Tesla.
Regards,
Ody, you claim in your final paragraph that Toyota are being 'murdered'. Do you have anything to justify that assertion or was it merely wishful thinking on your part?
Toyota are in fact doing very well, following their decision to focus on hybrids:
https://www.gbnews.com/lifestyle/car-ne ... c-vehiclesI drive one of their hybrid cars and an very pleased with it.
Watis
Sorry for the delay in my reply, just got over loaded with jobs.
Toyota is an interesting case study of a legacy transition to the new era of public transport. They led the process with their Prius, first introduced in Japan in 1997:
https://en.m.wikipedia.org/wiki/Toyota_PriusPrius over a quarter of a century later are still on the roads & are popular with taxi drivers. The latest range of Toyota hybrids remain popular & I know several folk who speak highly of them. From a technical perspective they save on battery weight & cost by adding the weight & cost of an internal combustion engine with associated servicing costs & emissions. So long as batteries were expensive this added up to a financial gain, but as battery costs have fallen & charging infrastructure structure has grown exponentially there will come a point where Toyota can not compete against battery only cars. As is their once flag ship Corolla has been out sold by the Tesla Y even though the Corolla sells in many more markets. Sales in the us have gone from 20-30k per month to 10-20k per month:
https://www.goodcarbadcar.net/total-toy ... sa-canada/The revenue of the company has also remained reasonable, albeit choppy, helped by sales in markets where there is less or no battery competition:
https://companiesmarketcap.com/toyota/revenue/& margins have held up:
https://companiesmarketcap.com/toyota/o ... %209.87%25.
Meanwhile debt after a little dip resumed its long term climb:
https://companiesmarketcap.com/toyota/total-debt/There is growing evidence in irregularities in Engine emissions & Toyota is currently under investigation for a dieselgate conspiracy to cheat emissions tests & there could be heavy fines to follow:
https://global.toyota/en/newsroom/corpo ... 0to%20TICO.
So are Toyota being murdered? One can argue that if so they are taking a long time to die, but the loss of market share, the focus on hybrids with coming loss of manufacturing margin compared to cheaper batteries, the long saga with hydrogen are all indicative of falling competitive advantage & challenged management that has replaced the seasoned strengths that made Toyota the power house it was. It seems clear that Toyota are now reacting to change, not leading it & that change has been caused by the loss of sales in the affluent western markets to battery electric vehicles that are currently more expensive, but which are likely to become cheaper than even straight internal combustion engines.
Defenders of Toyota argue that Toyota have played a blinder, kept selling old technology, based on their hard won reputation for reliability while letting Tesla & others build out a charging infra structure that they can use to power a new range of Toyota battery vehicles. Indeed many in the motoring press have recently been singing about how wonderful Toyota are. We shall see.
Regards,