Tesla Investors Are Crazier Than Elon Musk

To quote Oscar Levant: "There's a fine line between genius and insanity."

Elon Musk, CEO of Tesla Motors (NASDAQ: TSLA  ) has done an exceptional job thus far of traversing both lines simultaneously while also helping to introduce revolutionary new concepts to better the world. A co-founder of PayPal, which has changed the face of Internet payment facilitation, and the developer of the first mass-produced electric vehicle, Musk is often viewed as a hero by the public and investors.

Source: pestoverde, Flickr.

On the flip side, some of Musk's ideas have bordered on eccentric. The ultimate goal of his aerospace company, SpaceX, to enable people to live on other planets, and his recent idea of a rapid mass-transit system known as the Hyperloop, are both a bit of a stretch. While the thought of a 35-minute trip between Los Angeles and San Francisco sounds intriguing, if you've ever watched California try to implement a transportation improvement project like I have you'd know that it's never finished on time, or even close to budget.

Yet in spite of Elon Musk's vivid and borderline wild imagination, it's Tesla's shareholders that are really the crazy ones. In an interview with CNBC last month, Musk, when asked about Tesla's growing valuation (which now stands at $20.6 billion by the way!) had this to say:

I actually think that the value of Tesla right now is... the market's being very generous, and they're obviously giving us a lot of credit for future execution. So, we'll do our best to honor the faith that the market has placed in us. I really feel like the valuation we've gotten is... that we have right now... is more than we have any right to deserve, honestly. I think we need to make sure we really knock the ball out of the park in the coming years. 

Musk wants to put people on other planets and tackle California's congestion issue – both daunting and veritably impossible tasks – but even he recognizes that Tesla's valuation makes little sense here.

Giving credit where credit is due
Let me be clear, as a current short-seller of Tesla Motors, I in no way expect the company to fail, nor is the stock going back to single digits. I am a realist and understand that disruptive technologies do change the course of a sector over time. Tesla Motors has done an exceptional job of introducing a mass-produced car that has achieved an overall safety rating that's higher than any car ever tested. That's saying something!

In 2011, I projected that Tesla would never turn a profit and that prediction has turned out to be all wet. Tesla has successfully paid off its U.S. Department of Energy loan nine years early and has met its production targets in three straight quarters. Sometimes I do have to give credit where credit is due.

The insanity continues
Then again, some things never change.

For starters, Tesla's valuation based on its production capabilities has grown even further beyond the Gary Busey stage of ridiculous discussed last month and has traversed into something of Charlie Sheen-like state of existence. For a third straight month I give to you my own personal metric, the price-per-car tabulation, that I think succinctly demonstrates just how overvalued Tesla currently is:

Company

Market Cap

2012 Production

Value per Car

General Motors (NYSE: GM  )

$50.3 billion

9.288 million

$5,416

Ford (NYSE: F  )

$68.2 billion

5.708 million

$11,948

Toyota (NYSE: TM  )

$199.1 billion

9.692 million

$20,543

Honda Motor (NYSE: HMC  )

$68.1 billion

3.137 million

$21,709

Tesla

$20.6 billion

21,000*

$980,952

Source: Individual company annual reports, Yahoo! Finance, author's calculations. * Projected 2013 production.

As I've noted previously, the smallest valuation on a production basis is still given to GM – and with good reason. GM is still attempting to recover from the negative PR associated with its bankruptcy filing in June 2009. In addition, at least domestically, GM has been kicked around by Ford which redesigned its entire line of trucks and introduced a newer, more fuel-efficient engine known as the EcoBoost which gets better gas mileage but doesn't sacrifice horsepower. Perhaps GM's Sierra and Silverado redesign will reinvigorate its truck sales in 2014, but for now the U.S. truck market remains Ford's to lose.

Honda and Toyota are both priced a bit higher on a value per car basis, but they, too, have a good reason. Honda Motor, for example, sells motorcycles, lawnmowers, and other equipment which accounts for 27% of its revenue. Factoring in the 73% of Honda's revenue that it does generate from auto sales brings its valuation considerably closer to that of Ford's. Similarly, Toyota commands its premium valuation because, frankly, it's more profitable than the other carmakers combined based on forward profit projections.

And then there's Tesla whose valuation is nearing... get this... $1 million per car! Keep in mind that a base Model S runs about $60,000, yet investors are willing to place a current valuation on Tesla of practically $1 million per vehicle!

A disruptor? More like a mosquito...
Is Tesla really disrupting the market? If you looked at August's U.S. auto sales figures the answer would be a resounding "No!" U.S. auto sales, thanks to preferential lease rates, zoomed higher by their largest rate in six years, with GM and Ford seeing unit sales rise by 15% and 12%, respectively, while Honda and Toyota turned in even more impressive U.S. unit sales gains for the month of 27% and 23%.

Source: Steve Jurvetson, Wikimedia Commons.

Tesla's not having a huge effect on traditional automakers because it's not a big enough threat yet to be one. Put simply, you can't waltz into a dealership and simply test drive a Tesla Model S. Since production began on the Model S a year ago, Tesla has delivered approximately 12,750 vehicles. Prior to this, Tesla had sold just a tad more than 2,400 Roadster's worldwide between 2008 and 2012. Add that up and Tesla, since its founding in 2003, has put just a tad more than 15,000 cars on the road. To put this in some perspective, Toyota sold more than 26,500 cars per day last year! Is the enormity of Tesla's valuation beginning to sink in yet? Nearly $21 billion in value for a company that hasn't even matched Toyota's daily production rate despite being given 10 years to do so?

What's more is that even Musk understands that Tesla's greatest risk is in expanding its production. In fact, Musk's exact words in the interview with CNBC are: "Our big issue is raising production." Even if Tesla is successful in expanding to 40,000 vehicles next year and 100,000 by 2016, that still translates to more than $206,000 per car; or, in other words, more than three times the price of the Model S and about 14 times the profit expectation of each car assuming a 25% gross margin. The numbers just don't make any sense.

I still stand firm on my short position of Tesla Motors and, as I have stated in previous months, will look to add to that position.

If you really want to something to be excited about in the automobile industry then look no further than China. There's good reason to believe that the most successful investors over the next few decades will be those with exposure to China's massive and growing population of domestic consumers. And there are few things that these consumers are likely to purchase with more enthusiasm than cars and trucks. In this brand-new free report, our analysts get out in front of this trend by identifying two automakers that are poised to surge along with China's middle class. If you want to be among the smart investors who get rich from this growing trend, then you'd be well advised to instantly download our free report on the topic by clicking here now.


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  • Report this Comment On September 06, 2013, at 1:17 PM, ckgod wrote:

    "they're obviously giving us a lot of credit for future execution"

    He got the credit only because of what he has achieved.

  • Report this Comment On September 06, 2013, at 1:18 PM, caarecengi wrote:

    I've made a lot of money on TSLA stock - I first started buy shares when the price was $84

    Now if I had a nickel for every time someone mentioned the terms "valuation" and "stock price" in the same sentence...WAIT - I DO !!!!!

  • Report this Comment On September 06, 2013, at 1:18 PM, nonqual wrote:

    I share your assessment. 2 Questions:

    1. When/what will cause the market to place a more realistic value on TSLA?

    2. What are Tesla's prospects in China? (To me that is the wild card in their future.)

    Thanks

    PS How do you short? LEAP puts?

  • Report this Comment On September 06, 2013, at 1:30 PM, PaulPhoenix wrote:

    Will be interesting to see what happens to Tesla

    when more of those supercharging stations go online, and people choose to mostly charge from them since they are free. Unfortunately for Tesla, electricity is not free and either they are going to be taking a big hit every month in paying for their customer's fuel costs or they are going to start charging people to, charge. Either way the fairy tale will not last forever.

  • Report this Comment On September 06, 2013, at 1:31 PM, hutthuttndabutt wrote:

    No Sean, the real insanity here is that you are standing in front of a freight train and are actually short this beast of a stock. How can you blatantly ignore price action and the laws of supply and demand, all the while clinging to your entirely subjective "valuation" models?

  • Report this Comment On September 06, 2013, at 1:42 PM, TMFUltraLong wrote:

    Hutthutt,

    What supply? The 21k cars they'll produce this year? Toyota does that in a day! Ford sells that many F-Series pickups in about 9 days!

    Sean

  • Report this Comment On September 06, 2013, at 1:46 PM, hutthuttndabutt wrote:

    Sean, supply/demand in the stock market. When you trade shares of TSLA, you are not buying and selling the company, you are trading shares in a market composed of stocks. Shares of TSLA are in extremely high demand by large market participants, fueled in part by people with your mindset who are short.

  • Report this Comment On September 06, 2013, at 1:59 PM, QQ007 wrote:

    Warning folks, this article may quite possible be a case of:

    SHORT AND DISTORT

    As the author says, buried deep in the article:

    "I still stand firm on my short position of Tesla Motors and, as I have stated in previous months, will look to add to that position."

    Apparently you, sir are crazier than Mr. Musk if you are short Tesla. The last months Tesla has only climbed higher and higher. Don't you think you would have made much more money if you had been long Tesla? Wait...don't answer that.

    Why take a position all the professional financial advisors warn against? My crazy suspicion is you are either in too deep, or are just afraid to admit you are wrong...or both.

  • Report this Comment On September 06, 2013, at 2:06 PM, QQ007 wrote:

    Thank you for writing this, since it was published, I just made another several thousand dollars on TSLA.

    Now lets see how crazy you are, Mr. Sean Williams.

    Please reveal to the readers: exactly how long HAVE you been short TSLA?

  • Report this Comment On September 06, 2013, at 2:08 PM, champinvest wrote:

    HAHA Mr author you are one of the people who always wanted to get into the Tesla shares but you couldnt because I know lot of people like you in your position and now your are crying baby because you shorted,

    This stock my friend is poised to be more then $200 pretty soon!

  • Report this Comment On September 06, 2013, at 2:09 PM, Borg1977 wrote:

    This is REALLY starting to irritate me. Yes, 1 million per car.... but

    When they first started to lay down the train tracks and it cost them hundreds of millions, the cost of one railway car cost them millions. Why? Because they had to lay down the whole infrastructure. That's why.

    Tesla (electric cars) are the same. You have to do all the research for technology AND create the whole INFRASTRUCTURE.

    Had Tesla not have to build the Supercharger stations (half a million each), they cars would not cost more than those of other companies.

    PLEASE, please, please understand this finally. If you plant a tree and it brings its first apple in 5 years, YOU DO NOT SAY THAT APPLE COST thousands of dollars. Why? Because you know that this is just the beginning and every year the tree will bring more fruit.

    One more of these 1 car costs a million AND i am going to SCREAM!!!

  • Report this Comment On September 06, 2013, at 2:15 PM, QQ007 wrote:

    Actually @ PaulPhoenix, energy IS free when you own a large solar company, and you use it to install solar panels on all your charging stations to power the electric cars. There is a method to his madness after all.

    I would never bet against Elon Musk. NASA is employing his company SPACEX to send rockets their international space station. Not too many of us can say that...least of all, those people writing articles calling this brilliant man disparaging names.

  • Report this Comment On September 06, 2013, at 2:22 PM, QQ007 wrote:

    @Borg1977, the author probably does not care about the facts. By his own admission, he has been short Tesla for a while now. When that much money is at stake, it usually that means that facts or logic will not get in the way to recover losses. Please do not scream.

  • Report this Comment On September 06, 2013, at 2:28 PM, ryanalexanderson wrote:

    Wow. if I didn't want to short TSLA before reading the comments...I certainly do now.

    Gems like this:

    - "When you trade shares of TSLA, you are not buying and selling the company, you are trading shares in a market composed of stocks."

    - "The last months Tesla has only climbed higher and higher. Don't you think you would have made much more money if you had been long Tesla?"

    Yeah...solid arguments, there.

    Nobody knows Tesla more than Elon Musk himself. And to repeat Elon's quote: "I really feel like the valuation we've gotten is... that we have right now... is more than we have any right to deserve, honestly."

    Think hard about that statement, TSLA bulls. Tell me why he would say that if it wasn't true.

    Humility? From hyperloop man?

  • Report this Comment On September 06, 2013, at 2:31 PM, RustySlade wrote:

    If you hold Tesla stock you should sell it and wait for a pull back before you buy more.

    Elon is pretty much telling the world right now you will not like the debt to revenue numbers during the next conference call.

    Additionally, you need to watch very carefully what California does with it's EV credits. . .Right now I think it is $7k per car. . . You also need to watch if carbon credits get pulled from Tesla. . .Currently they get 5 carbon credits each worth $5k on the open market for each car sold.

    Granted, they do sell components and license technology to other EV car vendors, but even those cars are not doing so well compared to hybrids in general which are selling MUCH better.. . (personally I like the Chevy Volt)

    I expect during the next large CapEx expenditure, the debt to revenue numbers will push the 980k number above in the article even higher.

    I would guess the smart bet would be to short the stock around January of next year because the next conference call after that will really shine a light on the numbers. . . . .Especially if CA chooses not to renew the $7k care credit (or reduces the pool greatly) and the carbon credits get taken away for whatever reason.

    The way the CA car subsidizes work is that there is a defined pool of money total to be used. And with more cars entering the market, it reduces the amount Tesla can get from it as more people buy different cars that qualify. . .i.e. leaf, volt, prius maybe i3, fusion, other hybrids. . etc. .etc.. This effect should be the same for other states that offer such subsidizes.

    If you buy Tesla today, be prepared to ride a out sustained dip at some time if you choose to hold for the long term.

  • Report this Comment On September 06, 2013, at 2:32 PM, chinesebuffett wrote:

    QQ007

    Up thread you claim "Thank you for writing this, since it was published, I just made another several thousand dollars on TSLA." Are you short? How'd you accomplish this on a down day?

  • Report this Comment On September 06, 2013, at 2:37 PM, chinesebuffett wrote:

    Actually @ QQ007

    Supercharging is not free when the PV panels don't generate enough power to sustain expected demand and have to pull from the grid. It will be a legacy cost akin to pension funds for the biggies

  • Report this Comment On September 06, 2013, at 2:40 PM, QQ007 wrote:

    @chinesebuffett

    No, I am certainly not crazy enough to short Tesla, as I said earlier, all the financial advisors are warning against that. I actually added to my other long positions earlier today, as I wanted to grab Tesla at a lower price while I still can.

  • Report this Comment On September 06, 2013, at 2:45 PM, mjw3786 wrote:

    I think you're failing to see where they're going. 21,000 vehicles only counts Model S and Roadster. With a more reasonable mid-priced vehicle [confirmed on the way but yet to be named] and the Model-X [SUV] to be built on an *interchangeable* platform, it's tough to see how you wouldn't expect exponential growth in the future.

    Right now, barriers to mass adoption are what?

    1-Supply

    2-Price

    3-Skepticism over EV range and availability of charging stations

    These things are very real obstacles, and how Musk and crew navigate them in the next 1-2 years will very much determine their success/failure, but if you think there isn't a massive demand for EV's *provided* there is a sensible/affordable solution to #3 above, you probably thought smartphones were a fad.

    cheers

  • Report this Comment On September 06, 2013, at 2:55 PM, chinesebuffett wrote:

    mjw3786

    Model X will not be on an interchangable platform per Elon's own words. The Gen III is on the way...... in 2016-17 alot of time in between to really consider its impact on the companies financials, and most assuredly will require further capital raises to realize fruition. This will only hurt stock price in the mean time. Currently EVs only comprise 3.92% of automotive sales, this isn't to say that won't increase, but is surely isn't "massive demand". source here:http://electricdrive.org/index.php?ht=d/sp/i/20952/pid/20952

    Of that 3.92 %, a majority of purchasers (93%) only lease the car, (http://insideevs.com/data-shows-93-percent-of-those-who-obta... maybe coincidence, but I would think it is more consumers unsure about the future of the industry.

  • Report this Comment On September 06, 2013, at 3:01 PM, QQ007 wrote:

    @chinesebuffett

    So, I understand that your personal forecast is that the PV panels will need to pull from the grid? How much exactly or even approximately? Your hyperbole, "A legacy cost akin to pension funds for the biggies?" Is merely for dramatic effect, but it sounds like you don't have much else to go on.

    When a man owns a solar company, he can put up more panels if needed.

    I see that you only have 7 comments in the last 3 months, all negative TSLA. Are you short Tesla as well?

  • Report this Comment On September 06, 2013, at 3:03 PM, Borg1977 wrote:

    The way I look at it is that I am not buying those 21000 cars, but the whole new technology, including patents, the whole infrastructure, the ingenious concept, the savings on advertising and on cutting out the middleman.

    But first and foremost, I am buying one of the greatest minds of the 21st century. Elon Musk's ability to find solutions where nobody else can/wants, his determination and courage to fight the status quo, his honesty (voluntary recall of cars), decency (he does not want to make money on repairs) his selflessness (he said his money will be taken out last). With other words, I am buying this guy and his team.

    I am also betting on the common sense of the public that it will be impressed when one company is not out there to rip them off for a change. Their wish to contribute to clean air. Their wish to save money on fuel, etc. etc.

    I think, considering all this, Tesla shares are a bargain.

  • Report this Comment On September 06, 2013, at 3:13 PM, QQ007 wrote:

    @chinesebuffett ...Are you short Tesla?

    Your comment doesn't add much meat to the conversation,

    "maybe coincidence, but I would think it is more consumers...yadda yadda yadda.

    Translation:

    Maybe coincidence,

    (maybe I will draw a possible conclusion based on coincidence)

    But I would think

    (but I will make assumptions based on coincidence anyhow, and write it here to influence non-critical thinking minds).

  • Report this Comment On September 06, 2013, at 3:15 PM, MartyTheCanuck wrote:

    I'm a value investor, but traditional valuation models don't work well with fast-growing cmpanies like Tesla. It's all about future earnings, which are speculative now. It is easier to predict a well-established company, with a long story of profits, then a newcomer.

    That being said, Tesla is disruptive. I have a family member who works in the auto industry and he spoke with high management from a big car company and they ARE afraid of Tesla. Look at how Toyota and Nissan are reacting, announcing more and better EVs. I will tell you that they are not reacting to the Chevy Volt.

    It is foolish with a small f to be short TSLA. Yes it may plunge, but it is hard to predict, and for now TMFUltraLong has been TMFUltraWrong.

  • Report this Comment On September 06, 2013, at 3:15 PM, chinesebuffett wrote:

    First off no I am not short TSLA. I don't short stocks. Secondly the man doesn't own Solar City it is a public company that is owned by investors and his actions for that company can only have SCTY investors best interests in mind, unless prison is in order. Thirdly are you the same QQ007 that posts exclusively pro Tesla comments on Seeking Alpha? How many other websites do you shill for Tesla on?

  • Report this Comment On September 06, 2013, at 3:20 PM, TMFUltraLong wrote:

    Mjw3786,

    Precisely... Supply, price per vehicle, and skepticism over charging range and/or ability to charge. The concern I have is why value the company as a success now if there are so many unprovens still to come. Lets say it does hit it's targets.. Does it deserve to go even higher? Likely not because traders are valuing Tesla as if its met its 2018 production goals. To me it seems like investors are willing to sit on stagnant money for the next couple of years only to see Tesla meet already baked in expectations.

    QQ007,

    As I stated in a previous article on Tesla, my current entry price is $124.75 but I will be adding to that position. I've been deterred only by a lack of short shares available actually... Not on a lack of trying to add to my position.

    Regards,

    Sean

  • Report this Comment On September 06, 2013, at 4:01 PM, QQ007 wrote:

    @chinesebuffett

    Why the hostility? It sounds like you have an axe to grind, or otherwise have a chip on your shoulder. What are you hiding? The ad hominem argument does not help your case.

    Yes, absolutely I post on Seeking Alpha as well. If I was trying to hide that fact I would post under a different name. I am posting my own opinions, and I have clearly stated on many of my posts that I am long Tesla. I put my money where my mouth is.

    A shill, by definition, is:

    "a plant or a stooge, is a person who publicly helps a person or organization without disclosing that they have a close relationship with the person or organization."

    Tesla certainly does not need a shill. They have a legion of supporters who see the visionary nature of the company.

    When Consumer Reports gives you the highest rating they have ever given a car, and your automobile has the highest safety rating a car can get, and people who own your car are raving about it, you certainly don't need a shill. You have well deserved supporters.

    Elon Musk is the chairman and also the largest shareholder in solar city, last I checked he had a 28% stake, or thereabouts.

    Why do you feel you need to attack me with your gratuitous verbal abuse? I'm simply making observations and asking questions.

  • Report this Comment On September 06, 2013, at 4:08 PM, QQ007 wrote:

    @ ryanalexanderson If you do short Tesla based the reasons you posted, I do not think it will work out very well for you. It hasn't worked well for the others either, and they have been yelling "short tesla" for months.

  • Report this Comment On September 06, 2013, at 4:18 PM, chinesebuffett wrote:

    What gratuitous verbal abuse? Do you own a Tesla? 28% stake means nothing when the SEC gets involved. Your statement indicating that Consumer Reports rating is a nice notch in the belt I suppose supporters will be holding on to that one for a long time.

    Your "legion of supporters" make one fatal mistake, they think that the reports, reviews, test drives equal value.

    Ad hominem attacks?:

    http://seekingalpha.com/article/1662952-teslas-american-drea...

    http://seekingalpha.com/article/1662952-teslas-american-drea...

    http://seekingalpha.com/article/1547432-why-tesla-is-grossly...

    Don't be a hypocrite

  • Report this Comment On September 06, 2013, at 4:33 PM, QQ007 wrote:

    @chinesebuffett

    SEC Getting involved? Are you accusing Solar City of potential wrong doing? Sounds like you could be on the verge of libel.

    I have no more time today for your vitriol and hostility tonight.

  • Report this Comment On September 06, 2013, at 4:43 PM, Marshgre wrote:

    Yes $980,000.00 per car right now. But when I bought my backhoe the first scoop of dirt I dug up cost me $17,000.00 but each scoop after that has gotten progressively cheaper.

    Have you considered that you have been looking at this the wrong way? There are better short arguments out there than the "market cap per unit produced" bunk you've written here.

    Long Tesla starting at mid $30's I've more than doubled my money (depending on how long the author has been short some of my money may have once belonged to him;-) ).

  • Report this Comment On September 06, 2013, at 4:55 PM, chinesebuffett wrote:

    No not libel. You stating that Elon can just slap some more SCTY Panels on top of SuperChargers is false. I stated that SCTY is public and to just run the thing as he sees fit would have him in trouble with the SEC. Your Short and Distort Comment is border line Libel though

  • Report this Comment On September 06, 2013, at 6:46 PM, Phrontrowalpine wrote:

    You sure throw a lot of stones and name a lot of names in this article bro

  • Report this Comment On September 06, 2013, at 7:10 PM, oTeslaManiax wrote:

    Comparing Tesla to other auto makers is like comparing a typewriter company to Apple is 1976. Yes they both can type up a document. But one can make a document be edited, stored, transmitted, viewed electronically and reprinted many times over. Electric cars will also change auto maintenance industry, fuel industry, power generation, mining industry.... Tesla is in this cyclone of changes coming and it has tremendous influence on the direction and speed of change... why do you think Elon also built SolarCity.... He is way ahead of the narrow minded view of just looking at Tesla as a car company... it is just one piece of the puzzle... the other automakers are still trying to build a decent BEV, while Elon is building out or influencing the buildout of entire industries... yes one day, when every one has BEVs, Tesla is just another auto brand... but that day is many many years away.. this is just the begin..

  • Report this Comment On September 06, 2013, at 10:40 PM, Stymie67 wrote:

    Well, call me crazy...

  • Report this Comment On September 06, 2013, at 10:54 PM, damilkman wrote:

    Greetings. A few comments. This thread reminds me of a lot of the threads during the internet bubble. Everyone chortled about their gains until the frothy end. Most did not get out as someone has to be left standing when the music stops playing. I still fondly recalling people predicting a trillion dollar market valuation for Cisco. I could name two dozen companies and two dozen threads that generated identical predictions.

    Assuming TSLA is selling 300K cars, and current market price that is 66K per car. That is assuming the stock does not budge for the next ten years! Yet it sounds from the BULLS they expect the price to go to infinity. Sounds just like the Internet boom. No end in sight.

    What I am personally looking for is a fundamental change in how cars are built. If I do not see it, I'm shorting. Technology and management practices can be easily copied. I was chatting with an automotive engineer who when we discussed TSLA mentioned that they just hired an engineer who worked there. So whatever TSLA is doing today, everyone else can do tomorrow. We know from other technology that first to the market does not mean the winner. Blackberry did not take over the world. Everyone will have access to the same battery and materials technology as TSLA 3 years from now.

    What I think has to happen for TSLA to justify its valuation is do something completely radical. Better battieries or smart grids are not good enough. Someone needs to solve the problem of the obsolete car. It is ridiculous that people spend 20-30K much less 70K on a car that is worth 1-2K ten years later. If someone could build a chassis that lasted and instead of buying a car you retooled your car every few years, that would be a MOAT!!!

    Your a hot rod punk. You want a sports car. You get married and retool into a sedan. Your family gets big and you retool into a minivan. New technology comes along. Pop out the old, put in the new. If Musk can treat the chassis of a car like the chassis of a router where people buy into the technology cycle of the chassis, then maybe this 20 billion dollar valuation just might have merit. That or an equivalent is what I am looking for. Popping batteries and recharging stations are not sustainable. Just do the numbers of the outstanding capital you would need just to have so many batteries on standby. Are we going to have Wallmart parking lots just to support all of the recharging outlets. Go to an interstate rest area and imagine every car coming in is coming in for a recharge. That is a lot of capital especially since solar tech is cycling through so quickly.

    But right now I see a bunch of people who do not know the first thing about the automobile industry who are buying long because they think Tony Stark is running the show.

  • Report this Comment On September 07, 2013, at 12:49 AM, Ustauber wrote:

    Lets see, Facebook has a Market Cap of $107.03B,

    so if you compare this to Tesla Market Cap of 20.3B,

    meaning that all our Facebook account is worth $18.5K. in this Market?

    Yeah right.

    People say that toyota and Honda sold more cars than Tesla, who cares? this companies are from Japan guys, have you realized that tesla is creating plants and jobs here in the USA so just be happy and fight foreign companies.

    @ chinesebuffet,

    Your username suits you perfect :)

  • Report this Comment On September 07, 2013, at 2:02 AM, gr8twhtebuffalo wrote:

    I'm a mortgage banker and as in any sales position your client needs to find VALUE in what you're selling.

    I hear all the good & bad. Mostly people are high on Tesla. I'd love to buy in but where's the value?

    I'm new here and along with the Tesla articles its cool to see how more experienced investors discuss their options. I'm looking forward to more!

  • Report this Comment On September 07, 2013, at 2:02 AM, talotu wrote:

    Shorting based on Valuation is a tricky game, especially something so highly shorted as TSLA.

    I think there are a few pieces missing from your valuation, you mentioned how Honda has other pieces of business, but didn't give TSLA credit for their sales to other car manufacturers (I ride by a RAV4 EV powered by TSLA sign every day) Also owning all the dealerships changes the model some as well. That being said I don't think adding those would change your conclusion, but omitting them makes the analysis look a little sloppy.

    Personally I sold a good chunk of my TSLA long at 90, and dumped the rest at 170. I sold @90 because I felt that that price bump was the result of a good Q + a hard short squeeze (at the time every one of my shares was loaned out at 30+%)

    Given that the rate for carrying a short is much more reasonable these days (<10% last time I checked) it's hard to attribute the run up from 90 to 170 to anything other than people buying the stock, but I've made quite a bit of money staying away from the herd.

    Car is great, and Elon is a smart/successful guy, but it feels like this valuation is about 3 years early on their current path so at this point I'm on the sidelines.

  • Report this Comment On September 07, 2013, at 12:56 PM, drax7 wrote:

    We consume 85 million barrels of crude per day. Spend trillions in oil exploration and developing wells and distributing the stuff. Then go on to spend trillions on Iraq and Afghanistan , gut the whole manufacturing industry with imports , and now we have one scintilla of hope with the best car and safest car , and you want to short it. Very smart and very deep and truly foolish.

    Burning 85 million barrels of crude per day is not sustainable and very polluting, tesla may be a viable answer to many problems.

    If you check the engineering accomplishment space x is, you will bow in Elon's presence.

  • Report this Comment On September 07, 2013, at 4:39 PM, damilkman wrote:

    I do not see what Afghanistan has to do with oil.

  • Report this Comment On September 07, 2013, at 5:26 PM, highgrowthcarson wrote:

    TSLA, like many MF (and my) favorites is a high-growth, high-tech company with a massive potential upside and a fairly large risk of never growing into its current valuation.

    You have to have a stomach for risk and an ability to diversify. A knowledge of how to boost returns with options and how to hedge against failure also help.

    I love the comment "If I had a nickel.... valuation.." above. It is so totally and exactly true.

    Tsla's value lies pretty much entirely in the possibility of a] EV's starting to replace ICE's on a large scale and b] Tesla, do to the incompetence of the auto majors, being able to do the lions share of the replacing. Sales of Model S and even Model X are relevant pretty much only in that they help with the bootstrapping process.

    What matters most is a] batteries -- they need to get cheaper and lighter to enable Tesla to build a mass market care, b] simplicity -- if batteries get cheaper, oh my, EV's will be so much less expensive to build than ICE's and c] Just how pathetic the majors actually are -- zero important innovations since GM invented the V8 in 1915 -- that is actually true -- so can the majors change their stripes and respond to the potential challenge of EV's?

  • Report this Comment On September 08, 2013, at 9:45 AM, drax7 wrote:

    Who financed bin laden ? Most likely oil money. Where did al bin laden set base ? Afghanistan. Why did we war Afghanistan , to get to the Taliban that supported bin laden. Oil and Afghanistan are connected.

    If you support oil, versus EV, these are the unintended ramifications.

    I contend :

    Burning 85 million barrels of crude oil per day is actually good for the environment ? Consequently ICE cars are a benefit, hence short tesla.

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