Understanding Tesla's Current Stock Valuation

[JeffKeryk]

There's plenty they can do. For example, from my understanding, the current RWD Y has the premium sound system while the RWD 3 does not. It's the ONLY thing that disappoints me about my car and when my lease is up I want to get a different Tesla with the premium sound system. Also, cloth seats. Maybe manual liftgate/trunk and manual folding seats? Cheaper wheels? It's all a few bucks here and there but at scale I'm sure it adds up. But the big thing they can do would be either a smaller battery or an LFP battery (if they can get one from within the US as not to pay tarriffs). GM will have LFP in the Boltium next year... If Tesla wants to start selling a cheaper Y now they can just use a smaller NCM pack for now then start selling them with an LFP pack later. They'll probably also software-limit it to slower acceleration and offer a performance boost software upgrade later. After all, I don't think it's much cheaper to make it slower with the motor technology they have, but even the cheapest Teslas on offer now are faster than almost every other similarly priced car. Our Equinox EV is much slower than my Tesla and even that is plenty fast enough so Tesla can offer a slower car if they wanted to. I think a Standard Range 3 would make sense. I would have happily saved a few thousand bucks for less range, the lowest I've got in my Tesla is like 17% and I supercharged for 8 whole minutes haha. In my Prologue I was regularly down to under 10%.

It is also likely that a new line, or a retro fitted lin, can take care of Tesla's further production advancements that save cost and improve outout speed.

I imagine the "Model 2" or whatever they call it, will have an industry low cost to manufacture.

 

[JeffKeryk]

We can agree. They can certainly do well if they could get this self driving technology to the point promised many years ago where somebody can buy a Tesla and have it work for the owner and make money as an Uber while they are at home.

That could be another decade down the line and I would have to wonder who else might come along

DOJO.

 

[alarmguy]

AG, isn't this the stock valuation thread?

Exactly.
This is a two year old thread when Tesla was still doing pretty good profit wise
So let’s see what it does moving forward with its earnings on a constant decline
After all that might fall into the category of what shareholders value the company at

Some might consider a 200 times it’s earnings a little overvalued so profit does come into play, doesn’t it?

Also, weren’t you discrediting Mary at GM on her statements of the electric vehicle business?
A company that is doing better than Tesla profit wise
For the record, I’m no fan of GM stock, though I will trade it at times. I just believe in a level playing field when we discussed these things

 

[JeffKeryk]

Exactly.
This is a two year old thread when Tesla was still doing pretty good profit wise
So let’s see what it does moving forward with its earnings on a constant decline
After all that might fall into the category of what shareholders value the company at

Some might consider a 200 times it’s earnings a little overvalued so profit does come into play, doesn’t it?

Also, weren’t you discrediting Mary at GM on her statements of the electric vehicle business?
A ccompany that is doing better than Tesla profit wise

GM is not doing better than Tesla profit wise based on margin, and certainly not in the EV space.
They are simply a much bigger company.

CEO Barra's job is to make GM look good, prepare for the future but mostly to please the shareholders. She is playing with words when she uses the term, "variable profit".

 

[demarpaint]

GM is not doing better than Tesla profit wise based on margin, and certainly not in the EV space.
They are simply a much bigger company.

Time will tell. Tesla missed seven out of the last eight quarters, Elon better pull a rabbit out of his hat soon.

 

[JeffKeryk]

Time will tell. Tesla missed seven out of the last eight quarters, Elon better pull a rabbit out of his hat soon.

With the Model 3 and Model Y refresh, one could make the case Tesla should be on top of the world.
Self inflicted wounds and competition.

IMO, for what it's worth, they need to get the Model 2 out to compete with the lower cost EVs out there. And Musk needs to repair Tesla's reputation with its base.

As you say, time will tell.

 

[97prizm]

You just made my point. Variable profit is not profit; if only covers fixed costs. Ms Barra is playing with terms to impress the less knowledgeable. And with the loss of the tax credit, EV sales will tend to drop which will hurt the variable profit. Variable profit is basically manufacturing profit, which is highly dependent on economies of scale affecting materials and labor costs.

Varible profit is defined as
"Variable profit is calculated as total revenue minus variable costs, highlighting how much profit can be earned from each unit sold after covering the costs …" GM is still making money off theirs line of ev's. Some models are more profitable than others.

 

[demarpaint]

With the Model 3 and Model Y refresh, one could make the case Tesla should be on top of the world.
Self inflicted wounds and competition.

IMO, for what it's worth, they need to get the Model 2 out to compete with the lower cost EVs out there. And Musk needs to repair Tesla's reputation with its base.

As you say, time will tell.

Yes, time will tell, however I see one wildcard that is a good card for the Bears. The insane insurance prices in some regions, that hurts Tesla sales.

 

[dogememe]

GM is not doing better than Tesla profit wise based on margin, and certainly not in the EV space.
They are simply a much bigger company.

CEO Barra's job is to make GM look good, prepare for the future but mostly to please the shareholders. She is playing with words when she uses the term, "variable profit".

Both Tesla and GM make GREAT EVs and I look forward to them competing and pushing each other to be better!

 

[alarmguy]

GM is not doing better than Tesla profit wise based on margin, and certainly not in the EV space.
They are simply a much bigger company.

CEO Barra's job is to make GM look good, prepare for the future but mostly to please the shareholders. She is playing with words when she uses the term, "variable profit".

GM makes more money than Tesla

 

[JeffKeryk]

Varible profit is defined as
"Variable profit is calculated as total revenue minus variable costs, highlighting how much profit can be earned from each unit sold after covering the costs …" GM is still making money off theirs line of ev's. Some models are more profitable than others.

I'm afraid you may not be well versed in cost accounting. At best, GM is only including cost to manufacture. For example, variable costs do not include warranty costs which are generally recognized in future periods but can be tied back to individual unit margin calcs. Then there is that little class action lawsuit GM settled...

Again, CEO Barra is playing word games... CEOs do that.

 

[97prizm]

I'm afraid you may not be well versed in cost accounting. At best, GM is only including cost to manufacture. For example, variable costs do not include warranty costs which are generally recognized in future periods but can be tied back to individual unit margin calcs. Then there is that little class action lawsuit GM settled...

Again, CEO Barra is playing word games... CEOs do that.

So Tesla buying back multiple Cybertrucks under lemon laws don't count? Or the fact that Tesla loses money on every Cybertruck doesn't count? Isn't Tesla just as guilty with their wording?

 

[97prizm]

Both Tesla and GM make GREAT EVs and I look forward to them competing and pushing each other to be better!

I'm hoping Tesla goes bankrupt, so Musk can take his stupid robots and hitchhike back to South Africa.

 

[97prizm]

Yes, time will tell, however I see one wildcard that is a good card for the Bears. The insane insurance prices in some regions, that hurts Tesla sales.

It's funny because didn't Musk claim that once Tesla starts offering insurance direct what a savings it'll be? So much for that.

 

[97prizm]

With the Model 3 and Model Y refresh, one could make the case Tesla should be on top of the world.
Self inflicted wounds and competition.

IMO, for what it's worth, they need to get the Model 2 out to compete with the lower cost EVs out there. And Musk needs to repair Tesla's reputation with its base.

As you say, time will tell.

Musk repairing Teslas reputation, I think that ship has sailed.

 

[JeffKeryk]

So Tesla buying back multiple Cybertrucks under lemon laws don't count? Or the fact that Tesla loses money on every Cybertruck doesn't count? Isn't Tesla just as guilty with their wording?

I am not sure Tesla has said the CT is profitable. I doubt it will ever be. Beyond the CT, Musk has made a lotta statements that are, let's say, from outer space. I'm still waiting for the new Roadster...
But yes, lemon laws, warranty costs, etc. are all cost components. To glean true cost information, revenue and cost need to be enumerated for clarity and fair comparison.

CEO Barra was cheering the 1st quarter the Bolt generated "variable profit". That's an important milestone in the product lifecycle; it shows product viability.
I also salute GM for their 100+ years of business; they have had their ups and downs but have evolved over time where many have not. And they have been counted out before... Heck, they have been building and selling EVs since the 1990's.

 

[JeffKeryk]

Musk repairing Teslas reputation, I think that ship has sailed.

Not Tesla's reputation, his.

 

[GON]

So Tesla buying back multiple Cybertrucks under lemon laws don't count? Or the fact that Tesla loses money on every Cybertruck doesn't count? Isn't Tesla just as guilty with their wording?

Just a fyi on cyber truck losses.

I have seen Cyber trucks in four different SE Asian nations. When the CT goes down the street, it is all everyone is looking at and talking about.

Might be the best use of losing money in recent automotive history. Nobody cares whatsoever if a BYD goes down the street in any SE Asian country.

The attorney Gerry Spence who never lost a case wrote a chapter in one of his books "sometimes one has to lose to win". I have no idea if the Cyber truck losses will turn into wins. Lots of new vehicle technology patents in the Cyber truck, and more. Lots of free marketing in SE Asia because of the Cyber truck, and huge positive vibes for the Cyber truck in SE Asia. Sometimes a challenge to buy those good vibes with a marketing campaign.

Fully acknowledge the mainstream media attack on Tesla, and that is hard to overcome, be the attack warranted or not.

Time will tell.....

 

[JeffKeryk]

Just a fyi on cyber truck losses.

I have seen Cyber trucks in four different SE Asian nations. When the CT goes down the street, it is all everyone is looking at and talking about.

Might be the best use of losing money in recent automotive history. Nobody cares whatsoever if a BYD goes down the street in any SE Asian country.

The attorney Gerry Spence who never lost a case wrote a chapter in one of his books "sometimes one has to lose to win". I have no idea if the Cyber truck losses will turn into wins. Lots of new vehicle technology patents in the Cyber truck, and more. Lots of free marketing in SE Asia because of the Cyber truck, and huge positive vibes for the Cyber truck in SE Asia. Sometimes a challenge to buy those good vibes with a marketing campaign.

Fully acknowledge the mainstream media attack on Tesla, and that is hard to overcome, be the attack warranted or not.

Time will tell.....

In many ways, the CT is an amazing, advanced vehicle. In total, I just don't get it. And that's as nice as I can put it.
I would really like to hear who Tesla considers the target market.

A major project like the Cybertruk is a critical move, and expenditure, for a company. I just don't get this particular decision.
One could make the case that spending that effort on the "Model 2" was the better move. The smaller, cheaper EV very well could be selling here and in Mexico like hotcakes. Austin is the plant... And it would be a thorn in the side of Bolt and other small EV sales.

 

[UncleDave]

CT is what happens when -

1. nobody pushes back on the boss.
2. a guy thats never used a truck/towed a boat/trailer/ in his life gets to design one.