how is Tesla worth more then any other car manufacturer?

25 views
0

I dont have the exact numbers, but I read that

VW sold about 12 million cars last year,

Mercedes over 2 million,

Tesla less than 1 million.

​

How can there be suge a huge difference in the worth of these companies?

In: 0

The answer that I learned a long time ago in grad school is that the price of the stock is the present value of all future earnings. That being said, I do not believe that that statement is accurate when applied to Tesla.

That depends how you count. The total value is often just the sum of all stocks (the market capitalization). Other parts of the company that aren’t publicly traded aren’t included in that value.

Also that value mostly regards future expectations and not the current value. People buy tesla stocks because they believe it will grow in value, not because they think the total company is worth a certain amount.

Tesla is “emotional” stock, people buy it not because of fundaments but because they love the CEO or the whole narrative about company.
Also – it’s not only about cars, tesla sells solar panels, energy storage and most important part is AI for selfdriving (that doesnt function properly as of now, but many people believe it soon will)

The stock value is not based on the current sales rates but rather on the expected future profits. And investors argue that Tesla have invested in an infrastructure and product that will give higher profits in the future. For example Tesla have spent a lot of development time making more automated factories which reduces operating costs while traditional manufacturers are still largely basing their manufacturing of human labor, they have automated a lot of the simpler things to automate but the last 10% that humans do is the toughest and will require huge investments in new technology or even full redesigns of their factories. Tesla is also a very prestigious brand and have a lot of lock in features which means that their customers pay more for less which again gives more profit. Most traditional car manufacturers are also scrambling to develop EV cars which means they tend to rush the decisions and have to rely on outside vendors who may be able to charge whatever they want, which reduces the profits. Tesla on the other hand have a policy of outsourcing as little as possible and only buy commodities. That have delayed their efforts a lot but means they have control of all the profits.