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TSLA Surges To Record High; Two-Thirds Of GM's Enterprise Value

Tyler Durden's picture




 

On the back of more subsidies, this time from China, TSLA shares are storming higher today. Up over 6% today to new record highs just below $200, we thought it fascinating that as debt-laden GM sees its Enterprise Value slide, TSLA's enterprise value is now 66% of GM's. We are sure this all makes sense somewhere deep in a growth investor's mind. When TSLA was birthed into the public markets in 2010, GM was over 20-times it size, now it is just 1.5 times...

 

 

China paid electric car buyers a subsidy of between 35,000 yuan to 60,000 yuan per vehicle in 2013, according to Xinhua, China's news agency. That comes to about $5,780 to about $9,900.

Xinhua reports that the Finance Ministry announced Saturday that those subsidies would be trimmed only 5% in 2014 and 10% in 2015, only half the reduction in subsidy that had previously been announced.

Tesla is just starting to sell vehicles in China, which has become the largest market in the world for car sales.

Tesla is due to report fourth quarter results Feb. 19.

 

Chart: Bloomberg

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Mon, 02/10/2014 - 14:07 | 4420358 slaughterer
slaughterer's picture

Why isn't China protecting its domestic electric car manufacturer and Uncle Warren favorite BYD?

Mon, 02/10/2014 - 14:10 | 4420371 john39
john39's picture

a tesla in every garage.

Mon, 02/10/2014 - 14:12 | 4420380 Joe Davola
Joe Davola's picture

Better install a sprinkler sys...

Wait, make that a foam fire suppression system.

Mon, 02/10/2014 - 14:17 | 4420388 NotApplicable
NotApplicable's picture

Gee, I'm having a really hard time justifiying subsidies for such a valuable company...

/s

Mon, 02/10/2014 - 17:49 | 4421223 TheRedScourge
TheRedScourge's picture

You guys are being a bit ridiculous here.

 

Tesla was given environmentally justified grants early on by the US government because it was planning to do something great for the environment. It has paid back those grants, though it does still have other companies purchasing carbon credits off it or whatever the hell, but I think that's a state-level thing. I have my doubts that it will ever be a ridiculously profitable car company, or that there can ever be such a thing, but this company without a doubt will be able to sustainably turn profits once the Model X drops, and even more so once future models which will undoubtedly continue to lower the price hit the market.

 

Yes, there were a few fires of Teslas, but the overall rate of fires is lower per Tesla on the road than any other vehicle out there. I specifically recall a handful of Ford and GM and Chrysler vehicles having massive recalls because they were bursting into flames while parked in the driveway, and nobody gave a damn other than the 200k or so people affected by the recall.

 

The only thing wrong with Tesla at the moment is it has an outrageously speculative stock valuation driven largely by hype, which I intend to extract easy profit from via long term put options. However, I had a tour of their Fremont facility, and it is crystal clear that that this company is definitely here to stay. They are the next Toyota without a doubt. Furthermore, anyone who can make an organization this massive, and pull it off in the Yuppie Hipster People's Republic of California of all places, is not going to be stopped by a few fires or naysayers. If all else fails, and they run into some unforeseen roadblock, they could easily switch to producing gasoline or natgas powertrain vehicles in probably a single year.

Mon, 02/10/2014 - 14:30 | 4420442 Freddie
Freddie's picture

Foam or halon?  I once when in an aircraft simulator.  The instructions were - if the alarm goes off, take a deep breath and run like hell.  The halon will suck the oxygen out of the air.  

Not too good at your house when all the oxygen is being sucked out of the garage and maybe the rest o fthe house while you are asleep. 

Mon, 02/10/2014 - 15:35 | 4420686 BurningFuld
BurningFuld's picture

Simple solution...just sleep with your oxygen mask on.

Mon, 02/10/2014 - 21:16 | 4422108 patb
patb's picture

Simple, Sleep in an ejection seat.  Alarm goes off and it blows you out of the house.

 

Mon, 02/10/2014 - 14:51 | 4420523 Muppetrage
Muppetrage's picture

I wonder what Paul Walker thought of Tesla.

Mon, 02/10/2014 - 16:05 | 4420835 Dr. Kenneth Noi...
Dr. Kenneth Noisewater's picture

He probably thought "Shit, I wish I was in a Tesla, which would at least let me get out of the car and stand back before it caught fire"...

Mon, 02/10/2014 - 16:04 | 4420830 Dr. Kenneth Noi...
Dr. Kenneth Noisewater's picture

They are, unless they changed their mind recently: only domestically-assembled EVs get a number of Chinese subsidies. 

Mon, 02/10/2014 - 14:10 | 4420367 Grande Tetons
Grande Tetons's picture

I think hell just froze over. 

Mon, 02/10/2014 - 14:23 | 4420415 nuclearsquid
nuclearsquid's picture

I don't know... In efficient markets, market cap is the NPV of future cash flows to equity.  I find it highly plausible that Tesla's future cash flows are worth almost as much as GM's.

Mon, 02/10/2014 - 15:04 | 4420553 nuclearsquid
nuclearsquid's picture

I guess the downvotes weren't shareholders in 2009?

Mon, 02/10/2014 - 15:19 | 4420622 disabledvet
disabledvet's picture

we've gone from "fight club" to "hate club."

Celebrating suicides of people we don't know.
Besmirching companies trying to make a difference.
Screaming at an up market as clearly worse news than total chaos and a real Great Depression.

Kinda a bummer actually.

Actually you are spot on...with the Big Three now being forced into a price war (and soon all auto makers globally. Europe's car market is a catastrophe.) the question of how much longer the ICE people can hold out here I think is really on the table.

I got laughed at for posting a pro Tesla comment relative to the big three on SA only yesterday. I have zero position in the car...don't own the car...probably never will be able to afford one actually.

The fact of the matter is you're looking at only a couple of ICE powered vehicles in the near term (couple of years?)

The biggest danger to Tesla is something truly dirt cheap that causes a conversion to all electrics literally within a model year.

In short more evidence building for a massive price collapse.

Mon, 02/10/2014 - 15:40 | 4420709 nuclearsquid
nuclearsquid's picture

+1000.

I have only been reading this site for a year, and the comment thread has gone from what used to be erudite discussion and rebuttals, to snark, and then finally to vitriol. I only keep coming back because so much of it is damn funny.

 

who knows about Tesla,  the 60(?)k price tag is probably what a gallon of milk will cost in two years.

Even so, I find it bizarre that everyone shits all over GM, only to shit all over Tesla even harder.  For anyone who thinks three burning Teslas are an issue, here is some reading:

http://www.carsdirect.com/automotive-news/the-most-dangerous-cars-of-all...

 

 

Mon, 02/10/2014 - 17:06 | 4421079 Rukeysers Ghost
Rukeysers Ghost's picture

Your link to the "Most Dangerous Cars" is pure garbage. It cites Corvette and Mustang as dangerous cars not because they are designed poorly, a la the Pinto, but because people race them and crash. Give me a break.

BTW, three burning Teslas are an issue when a total of 4 have been sold.

Mon, 02/10/2014 - 15:50 | 4420768 Jlasoon
Jlasoon's picture

I would argue that Tesla is already late to the ballgame. The new BMW i3 is essentially what Musk has been touting for his new "affordable" Model E. Your looking at a $42,000 (before incentives) all electric BMW. Add the government incentives and that's a pretty darn good deal.

Musk - just like Apple - will have to deal with rock bottom prices at some point. It's easy to sell an overpriced product when there's no competition. 

 

 

Mon, 02/10/2014 - 16:06 | 4420848 Dr. Kenneth Noi...
Dr. Kenneth Noisewater's picture

i3 battery is a joke, it needs to have at least 40-50kWh usable to be worth a damn.  It's otherwise too damn small, BMW need a sedan that's 5-series sized at least.

And wake me when BMW/GM/etc put together a coalition to put out 80kW CCS chargers for free, unlimited use forever.  Even then, Tesla's already at 50% greater power via Supercharger, and they're in the process of kicking it up to 135kW in the US.  An 85kWh battery could easily handle 2C charging, which would be 170kW, but 150kW is likely the next step.

Mon, 02/10/2014 - 20:24 | 4421928 Jlasoon
Jlasoon's picture

Techie features don't impress the general public. Although everything you stated is accurate, the fact of the matter remains that Nissan has sold 100,000 LEAFs. Competition will squeeze Tesla as it's squeezing Apple. 

Mon, 02/10/2014 - 16:13 | 4420873 Joseff Stalin
Joseff Stalin's picture

Elon Musk's strategy is to build the high end cars first. Then sell these to the wealthy.  Then introduce cheaper cars for the next wealthiest, and so on.  It is the only ligical way to proceed, and is historically a pattern tat have been followed forthe introduction of new products.

Mon, 02/10/2014 - 17:08 | 4421096 Rukeysers Ghost
Rukeysers Ghost's picture

It is the only ligical way to proceed, and is historically a pattern tat have been followed forthe introduction of new products.

 

You mean like Henry Ford did by building an outrageously high priced car for just a handful of the wealthy?

Mon, 02/10/2014 - 16:26 | 4420921 Joseff Stalin
Joseff Stalin's picture

Musk never wanted to be in the car business to begin with.  His quest is to establish a human colony on Mars.  He just entered the electric car business because nobody else was.  The ones that were doing it, were making bulshit cars to satify guvmnt regs.  He is just showing the rest how to do it, and giving them a run for the money.

Mon, 02/10/2014 - 16:49 | 4421030 Joseff Stalin
Joseff Stalin's picture

Musk never wanted to be in the car business to begin with.  His quest is to establish a human colony on Mars.  He just entered the electric car business because nobody else was.  The ones that were doing it, were making bulshit cars to satify guvmnt regs.  He is just showing the rest how to do it, and giving them a run for the money.

Mon, 02/10/2014 - 16:11 | 4420857 Joseff Stalin
Joseff Stalin's picture

http://www.teslamotors.com/supercharger

SCROLL DOWN TO MAP.

Once these stations are intelocked across EU Russia and China, and microwave power from them is used to assist chemical rockets, launch costs will come down dramatically.

microwave power can also be beamed from the SCTY installations as well.

Mon, 02/10/2014 - 14:12 | 4420369 TheFreeLance
TheFreeLance's picture

But so long as China burns mountains of coal in 1950s tech plants, how do "zero emission" vehicles help with the Death Air?

Mon, 02/10/2014 - 14:13 | 4420381 john39
john39's picture

i wonder how many thorium nuclear reactors China will eventually build... and when complete, will they make eletric cars feasible?:

http://motherboard.vice.com/blog/china-is-taking-the-lead-on-thorium-rea...

Mon, 02/10/2014 - 14:12 | 4420373 firstdivision
firstdivision's picture

They should get those subsidies in Bitcoins

Mon, 02/10/2014 - 14:12 | 4420376 ebworthen
ebworthen's picture

Frickin' crypto currencies took a crap over the weekend.

Mon, 02/10/2014 - 14:13 | 4420374 ebworthen
ebworthen's picture

Is Icahn tweeting Musk about share buybacks and bringing a Tesla SUV to the market yet?

Mon, 02/10/2014 - 14:26 | 4420428 maskone909
maskone909's picture

Icahn Musk.  a new fragrence available at walmarts nationwide.

Mon, 02/10/2014 - 14:17 | 4420387 HaroldWang
HaroldWang's picture

As goes Tesla so goes the economy, as they say.

Mon, 02/10/2014 - 15:35 | 4420691 waterwitch
waterwitch's picture

This company is ON FIRE!

Mon, 02/10/2014 - 14:15 | 4420389 all-priced-in
all-priced-in's picture

The only way the market cap of Tesla could be justified would be if China planed to fill the parking lots in all of its ghost cities with Teslas.

 

 

 

 

 

 

 

Mon, 02/10/2014 - 14:45 | 4420503 redpill
redpill's picture

Even Musk says the stock price is too high, but the momos just keep buying it anyway.

Mon, 02/10/2014 - 15:29 | 4420666 disabledvet
disabledvet's picture

They build it for probably 50,000 and sell for twice that.

They're selling it globally now.
You get free fuel for life.

Still wondering why corn prices collapsed last year?
Nissan had spectacular sales numbers as well.

China loves their German cars...so much so they pay 300,000 for what costs 70 grand in the USA.

I think the correction we have coming in the industrial space will be spectacular. If you want an interesting read google search "first open source car made." It was so good the whole thing got shut down after one year.

Believe me if we all start banding together to make our own cars (by constantly updating the design for free...and printing the necessary parts for five bucks) "this will cause a disturbance in the force."

Mon, 02/10/2014 - 14:16 | 4420391 Kaiser Sousa
Kaiser Sousa's picture

man, Tesla's on fire...

i mean,........

Mon, 02/10/2014 - 14:52 | 4420525 GolfHatesMe
GolfHatesMe's picture

Made 100% out of Obama Trousers

Mon, 02/10/2014 - 14:19 | 4420395 Winston Churchill
Winston Churchill's picture

Wow.

The TESLA turd is worth 2/3 of the GM turd.

What 1/3 of a turd worth ?

Mon, 02/10/2014 - 15:26 | 4420651 The_Ungrateful_Yid
The_Ungrateful_Yid's picture

Not worth SHIT

Mon, 02/10/2014 - 14:25 | 4420420 maskone909
maskone909's picture

how many people bought a tesla simply because its the latest tech gadget for the hipsters at starbucks to gawk at?  once it loses its fad status it will tank hard.  100K electric vehicle wtf

Mon, 02/10/2014 - 15:27 | 4420645 NotApplicable
NotApplicable's picture

Wait, Tesla sells cars? I've never seen one.

I thought they were merely a carbon-credit selling company?

Mon, 02/10/2014 - 15:29 | 4420659 The_Ungrateful_Yid
The_Ungrateful_Yid's picture

TSLA reminds me of the Hummer craze back in early 2000. Every well-to-do wannabe rambo soccer mom and dad had one and now that fad is over you never see one. Same as this. Just give it time.

Mon, 02/10/2014 - 15:34 | 4420693 maskone909
maskone909's picture

because soccer moms deserve the optional belt fed 50cal turrett and 2MPG.  PTA meetings will never be the same

Mon, 02/10/2014 - 16:00 | 4420820 Jlasoon
Jlasoon's picture

How much was gas in 2000? At 10mpg driving one of those today becomes downright illogical. Trust me when this country goes batshit crazy, the H2 hummer will rule the day. 

"Thank God For Rednecks" -Tallahassee 

Mon, 02/10/2014 - 16:01 | 4420826 The_Ungrateful_Yid
The_Ungrateful_Yid's picture

Until you get car jacked.

Mon, 02/10/2014 - 22:36 | 4422417 Muppetrage
Muppetrage's picture

Every time I see a hummer I just think , oh poor fellow felt he needed to buy that thing, hook line and sinker.

Mon, 02/10/2014 - 23:10 | 4422574 Hungarian Pengos
Hungarian Pengos's picture

I saw an H2 on the freeway today.  No shit.  I couldn't understand why someone actually owned that machine though.

Mon, 02/10/2014 - 14:28 | 4420422 FieldingMellish
FieldingMellish's picture

 

 

2014: China welcomes Tesra...

2016: China Electric Car Factory No. 46 produces its first electric car... looks VELY MUCH like Tesra!

 

Gung Hei Fat Choi, bitchez.

Mon, 02/10/2014 - 14:27 | 4420425 DavrosoftheDaleks
DavrosoftheDaleks's picture

I thought all the libertarian people here would love it.  You get your own supply of energy (wind/solar) and add a tesla and you're off the grid.  Simple as that, expensive as all heck, but if you have the money (200k or so) you're f'ing set.

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