Tesla Enterprise Value Just 25% Below That Of General Motors

Tyler Durden's picture




 

A well-placed Morgan Stanley "Utopia" upgrade here, a 'gigafactory' promise there, sprinkle in a 37% short-interest and what do you have? Telsa is surging once again (up 17% today)... breaking above a $30 billion enterprise value - just 25% below that of GM, based on Bloomberg's data.

 

Tesla is now 60% of Ford's enterprise value and over 75% of GM's...

 

Chart: Bloomberg

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Tue, 02/25/2014 - 13:55 | 4476243 LawsofPhysics
LawsofPhysics's picture

Right, because they are the "future".  Anyone know who will be providing the fire insurance on that new battery plant?

Tue, 02/25/2014 - 13:58 | 4476257 TruthInSunshine
TruthInSunshine's picture

Unicorn Dung & Cold Fusion Powered Lithium Ion Gigafactory, with technical support from TEPCO & Satoshi

Tue, 02/25/2014 - 13:58 | 4476265 StacksOnStacks
StacksOnStacks's picture

Neither company is worth it.

Tue, 02/25/2014 - 14:04 | 4476292 TruthInSunshine
TruthInSunshine's picture

But Tesla delivered an incredible 6900 vehicles last quarter with their incremental cost of production INCREASING ON A PER UNIT BASIS.

Once they are able to grow lithium in lithium orchards, off to the races.

Tue, 02/25/2014 - 14:04 | 4476309 LawsofPhysics
LawsofPhysics's picture

You would think that the miners would eventually take the fuck off wouldn't you?

Tue, 02/25/2014 - 14:08 | 4476334 jcaz
jcaz's picture

LOL- exactly-  go ahead, build the biggest battery plant in the world, that's just awesome...  Now go tell the Lithium miners you need 30% more production out of their asses- poof!

Tue, 02/25/2014 - 14:59 | 4476625 zaphod
zaphod's picture

Just wait till these buyers get the bill for a new battery in 5-years and government subsidies have finally rolled off. 

I'm always unhappy when the next 75K major tune-up is required, but at least mine doesn't cost around $8K.

Tue, 02/25/2014 - 15:18 | 4476741 johnQpublic
johnQpublic's picture

in hell you NEED a flaming fireball for a vehicle

 

so the valuation is of course more than fair

Tue, 02/25/2014 - 16:03 | 4476933 Pool Shark
Tue, 02/25/2014 - 14:10 | 4476345 ParkAveFlasher
ParkAveFlasher's picture

Once they start putting in engines that can run off-grid in these things, with an on-board energy source that's load-n-go, and a low maintenance design with an established supply chain for replacement parts, forget about it!  The sky's the limit. 

 

 

 

oh wait

Tue, 02/25/2014 - 14:24 | 4476434 SAT 800
SAT 800's picture

It makes me so proud to live in the country that exports "Tweets" to the world; instead of Diesel-Electric locomotives. Sigh.

Tue, 02/25/2014 - 14:47 | 4476579 TruthInSunshine
TruthInSunshine's picture

Let's not forget that their strategic partner on this gigabatteryfactory2come, Panasonic, is essentially de facto bankrupt at the present time.

Tue, 02/25/2014 - 15:26 | 4476709 0b1knob
0b1knob's picture

Perhaps Panasonic could start growing strawberries like its old competitor Sharp electronics does.

http://news.cnet.com/8301-17852_3-57604491-71/sharp-makes-a-comeback-its-growing-strawberries/#!

Funny how all the Japanese electronic companies that dominated their fields went bust in a few years.  Sony is abandoning the TV business.  But the export driven economy of China will be more resilient?

Tue, 02/25/2014 - 16:06 | 4476949 Pool Shark
Pool Shark's picture

 

 

So, what will Mt. Gox wind up doing?...

[maybe they'll sell role-playing game cards...]

 

 

 

Tue, 02/25/2014 - 15:38 | 4476820 TheRedScourge
TheRedScourge's picture

They probably went with Panasonic because they got some sort of desperation "save us Elon!" deal out of them.

Tue, 02/25/2014 - 16:01 | 4476927 bagehot99
bagehot99's picture

It doesn't matter! This is a Potemkin factory we're talking about. 

Elon Musk is laughing at you, Barack. Please know this.

Tue, 02/25/2014 - 16:00 | 4476921 StarfishPrime
StarfishPrime's picture

I keep hearing about these per unit costs increasing and wonder.. does anyone have any information about GM, F, etc. early growth problems? Did they also have issues with increasing unit production costs in their early years?

Wed, 02/26/2014 - 09:29 | 4478534 TruthInSunshine
TruthInSunshine's picture

It depends on the model. IIRC, all things being equal, and given the tremendous capital costs required to build a factory, acquire the tooling, assembly line, robotics, etc., economies of scale put break even point well past 85,000 vehicles sold annually for a minimum of 7 years (so 595,000 units).

And the factory has to be able to switch to building different models in essentially the same platform (see reasons VW/Audi went with new MQB program of platform sharing).

This varies on per unit margins, etc., obviously, but is very approximate way of looking at economy of scale needed to recover massive initial capital outlay.

With Tesla, their last quarterly report indicated unambiguously that their costs per unit of fabrication WERE RISING, which if true, is quite the vexing dilemma to have, especially since their new hopium growth model to profitability rest on dramatically ramping up production and sales globally, and given that they are floating a Unicorn Plan to build a gigafactory able to produce enough lithium batteries (where basic math presents an issue as not enough raw material is available to do what they claim they will do) to meet their production/sales growth target.

Tue, 02/25/2014 - 13:59 | 4476275 TeamDepends
TeamDepends's picture

Until they release a pick-up truck, they shall be considered metrosexuals around here.

Tue, 02/25/2014 - 14:11 | 4476353 Oh regional Indian
Oh regional Indian's picture

The overt and implicit sexuality in Big manly truck commercials for metrosexuals used to be hilarious.

I was in the silly con valley when the city-trucker boom exploded.  Bang...suddenly everyone had a Tacoma....

ori

Tue, 02/25/2014 - 16:03 | 4476936 bagehot99
bagehot99's picture

A fucking Tacoma??? 

Nobody who hauls actual stuff drives a Tacoma in the Midwest. They're for the owners of large non-union subcontractors.

Tue, 02/25/2014 - 14:18 | 4476396 Bangin7GramRocks
Bangin7GramRocks's picture

Fuck it! If an app with 60 employees and no revenue is worth $19 billion, then why not! It's all fake money anyway....

Tue, 02/25/2014 - 14:42 | 4476547 Dollarmedes
Dollarmedes's picture

I think Zuckerberg must've been trying to bang one of the secretaries there, and wanted to impress her.

Tue, 02/25/2014 - 18:16 | 4477544 TruthHunter
TruthHunter's picture

 

"bang one of the secretaries there"

I always figured Zuckerberg was more like Sheldon Cooper.

Any Big Bang is theoretical...

Tue, 02/25/2014 - 15:03 | 4476651 verbot
verbot's picture

good point.. i know the article and general discussion over mr.musk's endeavours center over valuation/marketshare all fomenting offtopic opinions for some reason..

general motors has to intentionally "wound" every model they make due to the engineering excellence of the 21st century. how many fine engineers went mad over having to ruin perfection of design to fit a planned model of sales?....

tesla is missing the chance to take over the industry from such poor stewards as general motors ford etc.... this is where i look to mr.musk and ask how did Henry Ford change America? not one exotic supercar at a time and history is on my side. as a potential investor i would ask why tesla is prevented from making downscale hybrids and commuter electric vehicles for the MASSES? 

why are there not enthusiast kits from tesla to encourage homebrew solutions and application of electric and electro-motive hybrids all across america?

finally i ask why are no other "analysts" covering the factual gaps in the tesla story?

history is our guide and tesla is more akin to diamond reo if one needs such analogies.

if you read this Elon let henry ford guide you..

 

Tue, 02/25/2014 - 15:27 | 4476777 TBT or not TBT
TBT or not TBT's picture

Or put a gasoline motor in them and drop the price a tad.

Tue, 02/25/2014 - 16:15 | 4476989 Pool Shark
Pool Shark's picture

 

 

"as a potential investor i would ask why tesla is prevented from making downscale hybrids and commuter electric vehicles for the MASSES?"

Because, with the battery alone costing $30 - $40K, the "MASSES" aren't going to pay $50K for a car when they can buy a perfectly-good gas-powered vehicle for less than half that price.

Face it; electric vehicles are a boutique product for a niche market of quiche-eating elite.

Tue, 02/25/2014 - 17:15 | 4477265 JuliaS
JuliaS's picture

To justify valuations, they should start selling BitCars (the fastest way to travel between Farmvilles).

Tue, 02/25/2014 - 13:56 | 4476245 Ulterior
Ulterior's picture

Bitcoin dejavu

Tue, 02/25/2014 - 13:56 | 4476248 666
666's picture

Personally, I'd rather own a Tesla than a GM product. And I've already got an asbestos suit to drive in!

Tue, 02/25/2014 - 14:26 | 4476448 SAT 800
SAT 800's picture

And you understand that you will actually have to replace the battery, and you know how much it costs? right. you took all that into account? As far as the General Motors product goes; do what engineers do, and buy a Ford. They're actually built right.

Tue, 02/25/2014 - 14:38 | 4476517 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Renting cars over the years shows a distinct difference. GM is junk and Fords are not too bad. Still prefer Japanese autos though.

Tue, 02/25/2014 - 14:47 | 4476576 SAT 800
SAT 800's picture

That's right; but the rental fleet is a maximum of two years old; after that the GM stuff starts showing the results of their "let's save another 25 cents, Alfred, we don't really need a "high quality bolt"; that's when you really get buyer remorse.

Tue, 02/25/2014 - 15:24 | 4476763 johnQpublic
johnQpublic's picture

i like the way GM builds their eletronic engine control modules cases with dissimilar metals

then jams them in the front fender above the plastic wheel skirt

and voila, splashed with salt, promoting more service and parts replacement dollars

bullish

 

edit:the cases split open , the bolts rot off, and the little cover over the eprom rots right off in case nobody knows that

Wed, 02/26/2014 - 01:17 | 4479089 Vice
Vice's picture

Ford??

Oh yeah, you mean Found On Roadside Dead.

Didn't realize you were speaking in acronyms!

Tue, 02/25/2014 - 15:28 | 4476783 TBT or not TBT
TBT or not TBT's picture

GM products are UAW products. Not buying anything made by a domestic union, given the choice.

Tue, 02/25/2014 - 13:57 | 4476251 Professorlocknload
Professorlocknload's picture

Dow 46,000 just around the corner.

Tue, 02/25/2014 - 14:01 | 4476289 LawsofPhysics
LawsofPhysics's picture

yes, and not in a good way...

Tue, 02/25/2014 - 13:58 | 4476258 max2205
max2205's picture

But the forward PE is 2,000....so its a buy right

Tue, 02/25/2014 - 13:58 | 4476261 DavrosoftheDaleks
DavrosoftheDaleks's picture

Is TSLA debt free outside of the normal inventory financing stuff?  Do they have any publicly traded debt?

Tue, 02/25/2014 - 14:16 | 4476389 e1618978
e1618978's picture

Balance sheet looks pretty strong, but not quite good enough to count as "debt free".  $840 million in cash + receivables, $1.6B in total debt.

http://finance.yahoo.com/q/bs?s=TSLA

Tue, 02/25/2014 - 14:55 | 4476607 DavrosoftheDaleks
DavrosoftheDaleks's picture

Thanks

Tue, 02/25/2014 - 13:59 | 4476270 slotmouth
slotmouth's picture

Critical Hype!

Tue, 02/25/2014 - 14:00 | 4476278 superflex
superflex's picture

The idiots at CNBC are hot on TSLA since Consumer Reports gave it a 99/100.

Unbiased my ass.

Tue, 02/25/2014 - 14:01 | 4476285 Spungo
Spungo's picture

To be fair, Tesla does make awesome products that people want. GM, not so much. Which company will go to zero first? I think GM will go bankrupt first, so it's not really a shocker that GM and Tesla have market caps in the same ballpark. 

Tue, 02/25/2014 - 14:02 | 4476301 Spastica Rex
Spastica Rex's picture

So, GM goes bankrupt first, then Tesla goes bankrupt?

Tue, 02/25/2014 - 14:27 | 4476458 SAT 800
SAT 800's picture

Exactly. Congratulations on seeing through the hype.

Tue, 02/25/2014 - 14:43 | 4476548 Spastica Rex
Spastica Rex's picture

At least I know now the value of a company should be calculated on the nearness temporally of its impending bankruptcy to the impending bankruptcy of GM. Extraordinary financial advice.

Tue, 02/25/2014 - 14:39 | 4476532 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

So, GM goes bankrupt first, then Tesla goes bankrupt?

When GM goes under it will be sold off as parts. When Tesla bites the dust it will be liquidated.

Tue, 02/25/2014 - 14:09 | 4476339 adr
adr's picture

Really, people want Teslas? They sold 22k cars, most of which were booked presold and not delivered. Econuts and your average wealthy psychopath like Tesla, mostly for the smug factor, but the car has a very derivative design and probably the worst designed interior of all time. The giant square computer monitor in the center console is a "brilliant" design choice.

The model X may not happen and if it does it will just cannibalize sales of the Model S. By the time the $35k Tesla hits the road just about every car manufacturer will have plug in EVs and hybrids that will eat Tesla's lunch.

Wall Street is running a classic pump and dump on Telsa right now and Elon is perfectly happy with that as he cashes out his shares for billions.

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