Tesla needs to take a lesson from the British auto industry. They are ramping up production and making production gains to produce a car that is already 5 years old. Build quality and design complacency killed the British.
Ok, but the world EV market is a pinhead of automotive sales at the present time, it's easy to be the leader in one tiny segment of the automobile world. EVs are a flash in the pan right now but they wont be for long as the top brands in the world not only produce ICE vehicles but also EVs for those who want them.Of course. That's the point I have been making all along.
Tesla has the lion's share of the EV market, not to mention they are #1 in the luxury market. Any new entry sales into the EV market lowers the leader's percentage, but they are still the leader by a long shot.
People seem to think that until Tesla overtakes Toyota or whoever, they are a flash in the pan. Tell that to Lexus, BMW, MBZ and a whole bunch of others.
Yes, it’s a miss because they trade at 38 times earnings. Ford trades at 6 times earnings.Every EV sold that is not a Tesla reduces Tesla's market share in the EV market.
Every Tesla sold is a reduction in every other car company's market share in the car market.
Tesla had a 44% YOY increase in 2022, in an overall declining market. And that increase was called a miss. What do you call the other car company's results?
I was referring to US sales, all luxury vehicles, not just EVs. I should have made that more clear; apologies.Ok, but the world EV market is a pinhead of automotive sales at the present time, it's easy to be the leader in one tiny segment of the automobile world. EVs are a flash in the pan right now but they wont be for long as the top brands in the world not only produce ICE vehicles but also EVs for those who want them.
I guess by you calling Tesla #1 in the luxury market you mean to say in the EV luxury market.
https://www.motortrend.com/style/luxury-car/
It is hard breaking down Tesla numbers as they do not report USA sales figures.
Numbers are spun, more so when you didnt make many the year before. I mean GM can claim in the USA alone 2022 4th quarter its sales increase 44%
What did Tesla USA sales increase? We dont know because they dont tell. I mean, arent they supposed to be the "new" way of doing business? Not exactly transparent right ? Or am I missing something here?
Tesla's world wide sales numbers for 2022? 1,113,000
GM sold world wide 6,290,000 over 550% more than Tesla
Tesla Estimate of 536,000 in the USA in 2022 (Tesla strangely will not report USA sales)
GM sold 2,270,000 in the USA roughly 425% more than Tesla
It will be interesting once GM is turning out EVs like McDonalds turns out hamburgers. I personally feel the market is going to be saturated with an over supply in 3 years if that long.
It's easy to start with a low number of sales and increase them when you are a new company.
Yes, it’s a miss because they trade at 38 times earnings. Ford trades at 6 times earnings.
They've come a long way over the last couple of decades. The biggest fight is the old generation who are comforting with the "traditional government" vs the younger who want change. The lady that threw a fit was mad because an employee at the Tesla service center In November or December told her "Testing is definitely raising prices in January 2023.The Chinese don't understand a free market economy.
Scott
Sales positions are tough jobs and we know sales reps say things to encourage buyers to buy. More than anything else that Chinese woman is a victim of her own government and its control of markets and the media.They've come a long way over the last couple of decades. The biggest fight is the old generation who are comforting with the "traditional government" vs the younger who want change. The lady that threw a fit was mad because an employee at the Tesla service center In November or December told her "Testing is definitely raising prices in January 2023.
Are Teslas margin, growth and operations efficiency the best in the business? Yes.
Tesla got hammered for only growing 44% YOY in a declining market. GM barely grew at all and just about every other legacy company shrunk. Even the mighty Toyota...
Tesla margins are 9x the industry like GM, not 10. As you say, it is hard to believe the market believes Tesla is worth more than the next 4 or 5 car companies combined, even as they have lost 2/3 of their peak value. The stock price is a futuristic view; it is what investors think that stock will do going forward. Current is part of the picture, but investing is forward looking.GM had disappointing sales numbers in FY 2021, moving 2.2 million units, and increased sales 3% in FY 2022 to be the best selling automaker in 2022, moving 2.3 million units. Toyota came in second place, selling 2.1 million units, down 10% from FY 2021. These are mostly not luxury products, most are used by middle class Americans, big companies, rental agencies, etc.
It's obvious Tesla has some magic sauce at the moment, moving a lot of units that have enormous margins. Tesla sales were up in 2022 by 47%, moving 1.3 million units. I would not be placing heavy bets though because, as has been argued by the Tesla fan club (and I agree) it's a luxury product. Luxury products by nature have a small finite customer group, which is fickle and can sway overnight. E.g. it's a expensive fad. Millions of examples.
I still struggle with how Tesla could be the most valuable auto maker in the industry, having sold only a total of maybe 3-4 million units. GM has sold 4 million units in a single year before. So, when does 4 million units make a company 400 billion dollars?
Combined the big 3 auto makers sell more in a year than Tesla has since inception. So I really don't understand the fuzzy math nor how it could have so much value. Even if Tesla's profit margins were 10x that of the other auto makers, it still doesn't add up. My cursory view is that it's largely, almost entirely, in the stock price which translates almost entirely into sentiment and greed/fear. The obvious observation is stock prices are entirely fickle and rely on investor sentiment. As we've seen, it's dropped about 60% or so in less than a year.
So I see Tesla has three major problems.
1. EVs are not what they are promised.
2. Fickle stock market valuations and customer sentiment, esp. with scandals. Endless examples of stock prices collapsing, especially in the tech sector. Anyone remember Level III Communications, or telecom Giant MCI Worldcom, once the 2nd largest communications company in the US? How about Enron?
3. Luxury products elastic demand falls in depressions.
Tesla is evolving into a high margin high volume company; an enviable position; a position of power.
Tesla being hammered for only growing 44% YOY versus the 50% that the so called expert analysts predicted only shows that the experts are anything but. And only shows how much some people hate Tesla and Elon Musk if they have to spin a 44% growth YOY as a failure.
Of course science, technology and business will evolve. Legacy car companies have barriers to overcome with labor, aging factories and certainly complexity. Then there is the issue of technology. Tesla is the only company that codes its own firmware which was a huge problem for legacy car companies (the chip shortage). Look at the recent BMW recall; those cars have to go in while Tesla generally fixes bugs over the air. Legacy companies have focused on the out sourcing model while Tesla chose control via vertical integration.That is solely contingent on tesla having a massive advantage in every facet of auto-making in perpetuity. Other players will make something 80%, 90%, 100%, 110% as good at a lower margin. We have seen it over and over and over with every consumer product segment/business giant throughout the industrial and post-industrial age, its how business works. Not all OEM's are incompetent morons who will never figure out EVs, and Tesla isn't some unstoppable magic force of nature, because no company or person is. And this is coming from a guy that thinks Elon is one of the best businessmen the world as ever seen.
EVs are not overwhelmingly complicated machines, what is complicated is manufacturing good ones at a mass scale. Tesla's competitive advantage to this point was they could design production methods and logistics systems and software from scratch tailor made for EV. Those are not insignificant problems to solve for other OEM's, but they are solvable, and the scale and resources available to the giants is unrivaled by almost all industries on the planet.
This current price drop is a result of a little bit of everything users have assigned to it in this thread. The highly inflated auto market did cool off, interest rates rose, the economy is weaker, the EV market is getting more competitive, and EV adoption growth has slowed. What is notable to me is the massive price drop for their best selling model.
The analysts predictions are nothing more than expectations of earnings growth in line with market cap, not some indictment on whether people hate tesla or musk. They are not "spinning" Tesla as a failure of an automotive company, they are expressing reduced positive sentiment in the valuation of Teslas stock in relation to the pace at which the company is growing. Tesla is valued at 35-40x the amount it earns per year, the average public company is around 10x last I checked. Tesla needs to be maintaining growth in earnings, or be doing things to demonstrate it will have significant and consistent growth in earnings, far beyond that of an average company with an average valuation to maintain the sentiment that has propelled its stock price so high. For reference, teslas growth in earnings last year was 60%, it was expected to decline 10% from that but instead it was 16%.
Ummmm ... noTesla being hammered for only growing 44% YOY versus the 50% that the so called expert analysts predicted only shows that the experts are anything but. And only shows how much some people hate Tesla and Elon Musk if they have to spin a 44% growth YOY as a failure.
I think you are just ignoring facts, actually you are ignoring facts, you're defending a company that the public and investors feel differently than you. You're emotionally involved and your view is skewed because of it. You're blaming pundits, internet discussion boards, emotions, rumors, perceptions for the value of the stock price.If any car maker besides Tesla posted a 44% YOY growth number wouldn't that be considered a blockbuster quarter ?
The inventory wasn't really building up but rather a lot of cars were in transit as has been pointed out in previous posts.
The "negative spin" I mentioned was not necessarily from the Wall Street analysts who were overly optimistic in their predictions, but more so from the pundits on the news and from people on internet discussion boards who hate Teslas and Elon Musk.
Regarding the stock price, it has been pointed out on many occasions that emotions, perceptions and guessing along with rumors and intentional manipulation of public opinion vis-a-vis the CEO of any particular company.has a lot to do with the day to day valuation. Maybe even more so than the raw numbers show. So arguing whether or not TSLA should be valued 100X its earnings is about as useful as the old "how many angels can dance on the head of a pin" discussion.
Other carmakers are certainly offering EV's and have plans for more in the future.But Tesla is still at least 4 years ahead of everyone else and has more money available for critical capital expenditures than any other maker. EV's are a lot more complicated than "copying a car design, putting batteries and an electric motor on it same as was done 100 years ago". That has been tried by other makers and soon found to be fallacious thinking.
Just wait until Tesla introduces a sub- $30k EV which I am quite sure they have in development regardless of what Elon has said in the last year. They will then no longer be seen just as a "luxury" brand and they will sell every one they can make and while maybe not at the same margin as their larger models, they sure won't be selling them at a loss like GM.
And I am not taking any of these discussions pesonally, I'm just stating my opinion by pointing out some facts that others seem to be overlooking or failing to understand.
I think about things and it probably is a mental issue. Decades ago a dearest friend Adele sat Saturday I am going to help remove non native plants form a certain area. I said Adele are you going to remove all the Eucalyptis trees? they are not native. Adele didn't go to remove the non native plants. Just like finding the papers in Joes place Hmmmm.Interesting thought.
Scott
I'll also add that the average consumer was battered from around 2021 until now for a host of macro-economic reasons including inflation and huge wealth redistribution scams. That reflects why average car sales are down. Meanwhile, the wealthy elite glass grew significantly thru these same wealth redistribution scams. The middle class had to suspend vehicle purchases, while the wealthy were able to go buy luxury Teslas. It's quite obvious from the numbers what's occurred.
Since 2020, hundreds of new billionaires were created in the US, yet trillions of dollars were lost in the markets and the working middle class bore the brunt of these losses, along with inflation pains.
I think about things and it probably is a mental issue. Decades ago a dearest friend Adele sat Saturday I am going to help remove non native plants form a certain area. I said Adele are you going to remove all the Eucalyptis trees? they are not native. Adele didn't go to remove the non native plants. Just like finding the papers in Joes place Hmmmm.