Why I hate the stock market. Unprofitable Tesla is now worth more than profitable Ford which sells 28 x as many cars

I invested in Tesla about a year ago when it was around $196. And I'm a Ford investor. Mainly I got into Tesla because I figured I may as well get in on the bandwagon and it was a good entry point. And I figured it was a good hedge against my Ford holdings. It has worked out well.

But yeah, I'm skeptical. Funny thing is nobody seems to know what kind of company Tesla is. They are still talked about as a car company. Others say they are green energy company, More lately people are saying Tesla is a tech company.

Clearly at this point Tesla is going to get all the money it needs to complete Model 3 production, its gigafactory, and its solar production factory. And they will get good revenues from it.

But I think Tesla is still only exploiting the low hanging fruit of those relatively few people who have "green" convictions and have lots of money to buy their expensive cars. To justify their market cap as a car company they will have to take on Ford and GM as a mass production auto company. Even with full scale Model 3 production Tesla is not doing that.

Also, I see evidence that Ford is actually ahead of Tesla in the development of a self-driving, taxi service network of cars . That is where the most productive value of self driving technology lies.

Rojo,

You are correct in your Tesla assumptions. Tesla is just one example how the current stock market is divorced from any fundamental investing metric. Tesla is a business model that depends upon a narrative and government tax credits to continue in it's present form. The company is hemoraging $Billions and investors have been duped into believing that the purchase of Solar City was part of a grand plan. Here is the most recent Quarterly filing where one can clearly see the $3Billion in debt the company added over a nine month period.

http://ir.tesla.com/secfiling.cfm?filingID=1564590-16-26820&CIK=1318605

Igy

You're buying a share in the company's revenue stream in perpetuity. It's not just about current profit or sales. This just means that the market thinks that in the long run you'll get more from Tesla than from Ford...

Small correction: the entire U.S. market for vehicles was roughly 17m in 2016; Ford alone didn't sell that many.

Someone has to build the self-driving cars of the future and Ford is well positioned to do so. It appears Apple, Uber and Google have decided setting up an auto manufacturing supply chain is outside their comfort zone. Ford will profit either by building the cars of the future, or by getting bought by an Apple/Uber/Google that wants to scale manufacturing quickly.

Rojo, the Bolt just came out, and basically equals the 2010 released Tesla Roadster in terms of range, Tesla now has a 330/40 mile range variant.

However, the picture is much bigger than price and range. The Model S, the FIRST car Tesla ever built ground up is beats all cars Ford has ever made in acceleration, safety, efficiency, and autonomous driving capability....you could cherry pick the quickest Ford....slower, the most efficient Ford....about 1/2 as efficient, and the Model S wins.

I'm not justifying Tesla's stock value, but frankly, they make almost all other cars look like a joke. Yes they are very expensive, but prices are coming down and Tesla is a 10ish year old car company.

Finally, regarding the Bolt, the range on the Bolt, in many functional regards, is vastly inferior to Tesla S and X because it is not supported by a comprehensive, high speed,nation-wide charging network, as the S/X are (basically excluding ND and AK).

And you don't think there won't be a ton of different electric cars in 15 years? Chevy has already shown they can build one.

Fair enough. But the middleman also lets you try out the product. Most people want to try out a car.

I get that but there is a limited market for high end vehicles. There are only so many people in the world that can afford a $75,000 vehicle.

I don' think Tesla is going to get any bigger than Ford is currently.

I get that the future of cars may be self driving and solar but I certianly think GM and Ford can make those type of cars.

Rojo, you hate the stock market because you've probably lost money making poor investment decisions over the years. It happens to most people I'm not here to tell you to "buy and hold" because quite frankly that doesn't work and I don't even do that. I trade futures and that pays me rent each month. You don't need to smart to make money, just work hard and you'll make great investment decisions.

DiscoGary wrote:

If anyone can get a 10x improvement in battery technology, which is definitely possible, then the combustion engine is dead.

Oh yeah that should happen any day now. Super easy to get 10x efficiency from a 200 year old technology. I'm sure they are just about to pop that technology out from some magic hat.

I love Altra. But I doubt they will be bigger than Nike any day now.

better technology wrote:

If you've driven a small electric car, you start thinking of gasoline cars as 19th century technology. I've never driven a Tesla but I'd love to have an electric SUV with good range.

Oh you would love that would you? An electric SUV with "good range"? I'd love a flying car too but dang, they just don't exist.

EVs are great, so "21st century". That is until you want to drive from one city to the next. D'oh! Guess I'll have to take a train - so 18th century!!!! **sad trumpet sound**

rojo wrote:

[quote]

I don' think Tesla is going to get any bigger than Ford is currently.

.

So why are you complaining here? Short the stock, put your money where your mouth is. Buy some puts if you want to limit your risk.

Money can be made in any market if you want to take the risk, what are you waiting for?

No wrote:

DiscoGary wrote:

If anyone can get a 10x improvement in battery technology, which is definitely possible, then the combustion engine is dead.

Oh yeah that should happen any day now. Super easy to get 10x efficiency from a 200 year old technology. I'm sure they are just about to pop that technology out from some magic hat.

Umm, ever heard of Moore's law? Battery technology isn't far behind.

No wrote:

DiscoGary wrote:

If anyone can get a 10x improvement in battery technology, which is definitely possible, then the combustion engine is dead.

Oh yeah that should happen any day now. Super easy to get 10x efficiency from a 200 year old technology. I'm sure they are just about to pop that technology out from some magic hat.

They already have it. It's just a reliability and production cost issue. No one has a 10x improvement on the combustion motor in any stage of development. If you can get another 2% in efficiency out of a combustion engine, that would be a huge deal. Battery technology is still open ended as to how far it will go and you can see that orders of magnitude improvement are still possible. Keep in mind that for most of the last 200 years mankind hasn't been pouring a huge amount of effort into perfecting the flashlight battery. They've been working on the combustion engine. That has changed. The energy density they can create in batteries is actually a little scary. Imagine a car sized battery blowing up like some of those cell-phone or laptop batteries do. That's part of the engineering problem they have to work through. It'll happen, and when it does, electric cars will kill off the combustion engine as quickly as digital music killed off analog. Invest in nuclear power plants.

No wrote:

better technology wrote:

If you've driven a small electric car, you start thinking of gasoline cars as 19th century technology. I've never driven a Tesla but I'd love to have an electric SUV with good range.

Oh you would love that would you? An electric SUV with "good range"? I'd love a flying car too but dang, they just don't exist.

EVs are great, so "21st century". That is until you want to drive from one city to the next. D'oh! Guess I'll have to take a train - so 18th century!!!! **sad trumpet sound**

Tesla has set up a network of charging stations. If you want to drive from one city to another you just have to stop once in a while and have a coffee while your car is getting charged.

you're amazingly dumb wrote:

No wrote:

Oh yeah that should happen any day now. Super easy to get 10x efficiency from a 200 year old technology. I'm sure they are just about to pop that technology out from some magic hat.

Umm, ever heard of Moore's law? Battery technology isn't far behind.

Right. Battery technology is closer to the technological improvement curve than the mechanical improvement curve. It's not as fast as Moore's Law, but fast enough for our lifetimes to see electric cars blow combustion engines off the streets.

you're amazingly dumb wrote:

No wrote:

Oh you would love that would you? An electric SUV with "good range"? I'd love a flying car too but dang, they just don't exist.

EVs are great, so "21st century". That is until you want to drive from one city to the next. D'oh! Guess I'll have to take a train - so 18th century!!!! **sad trumpet sound**

Tesla has set up a network of charging stations. If you want to drive from one city to another you just have to stop once in a while and have a coffee while your car is getting charged.

Forgot to say that in Europe with its smaller distances this network is already a real game changer in the electric vs gas battle.

you're amazingly dumb wrote:

Umm, ever heard of Moore's law? Battery technology isn't far behind.

Sure it's not.

Ummm... what exactly does Moore's law have to do with batteries? Ummm... amazingly smart guy?

you're amazingly dumb wrote:

Tesla has set up a network of charging stations. If you want to drive from one city to another you just have to stop once in a while and have a coffee while your car is getting charged.

Super. If you drive a Tesla. Along a route that has charging stations. And you want to stop for a coffee while your car charges. Amazingly smart guy...