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Comment by blhack | Hacker News Reader

Is this because Tesla makes a lot more than just cars? My understanding is that Tesla is also a power infrastructure company.

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I suspect this adds to the hype. People comparing them to auto-manufacturers seem to willfully omit that Tesla is also a global auto sales dealership network, a global power storage company (grid power storage), a solar cell installer, sales and manufacturer, a battery manufacturer, and a global transportation power charging network (replacing gas stations).

I’ve yet to read a comparison of Tesla to the sum of all those different markets.

I am beginning to believe it might be worth that simply because other auto makers seem to be dragging their feet and getting into lousy deals (Nikola and GM being the most notable).

If retail, grocery, hotels, restaurants, and other traditional industries are any indication, an inability to innovate is deeply entrenched to the point that even knowing that Amazon or Airbnb or DoorDash was coming to eat them, they did/do squat.

I think you are drastically misunderstanding the Nikola/GM deal. It is absolutely no lose for GM. If somehow Nikola takes off then they are supplying them with batteries and some other expertise they have. If it doesn't then the monetary investment, at GM's scale, was nominal. (Basically, if GM makes a mistake on a new car model)

I think the market is drastically underestimating how seriously the entrenched automakers are taking electric. They are coming from behind for sure, but I think one of the things you see consistently with Tesla is they are still very much trying to figure out the manufacturing and logistics pieces of building cars (rolling out new lines, scaling them, etc). The existing automakers know how to do all that. Are they going to make mistakes? Sure, but in 5 years you will see dozens of electric models spread through out them, and that will hurt Tesla.

>Tesla is they are still very much trying to figure out the manufacturing and logistics pieces of building cars (rolling out new lines, scaling them, etc). The existing automakers know how to do all that

I have to disagree to some extent with that. I think by now Tesla has figured out the logistics of assembling cars at least as well as other manufacturers, but they still nees to build more lines however.

However Tesla is not stopping there and is continuously improving its logistics past the industry standard, it's not catching up anymore, it's pulling out. For example a lot of effort right now is invested into streamlining battery making and integration, this is something no other OEM is really doing right now. Tesla is willing to take on battery production and even potentially mining, allowing them to fine-tune and optimize the process end to end as much as possible, while traditional OEM rely on suppliers for everything and any improvement needs to be negotiated and takes forever.

Tesla last battery day had an extremely interesting presentation about battery making and logistics that illustrates just how deep the stack they are willing to go for the sake of optimization.

It’s (imho) because the market believes Tesla will continue to capture an ever increasing amount of auto sales market share, cannibalizing legacy automakers (while also enjoying higher margins from zero marginal cost products such as Autopilot and also selling energy storage products [which are supply constrained and they can’t build fast enough, both at residential and utility scale]).

Usual disclosure: TSLA investor, owner

Other car makers also make a lot more than just cars. More so than Tesla, probably.

Most of them include banks, for example. They usually started out financing their customers' car purchases but in many instances have expanded beyond that.

Peugeot makes pretty nice bicycles :)

But with a bank you don't look at market cap, so still a bad comparison.

Honda jet ski’s for example are profitable, but don’t have significant growth potential which minimizes the impact on Market Cap. Tesla’s charging network by comparison has constant EV sales pushing up demand.

Tesla building parts that most companies outsource isn’t that profitable on it’s own, but it’s likely to scale with increasing EV sales and future repairs.

Etc etc. If you want to do in depth analysis it takes a lot more time than simple direct comparisons suggest.

Where's the "moat" is in electric charging networks, though? I view it just as a way to make their EVs usable/saleable until the world catches up, not as a long term leg of the business. It seems really unlikely that the industry won't standardize on something interoperable/non-proprietary.

I don’t think there is a moat, but simply riding the wave of an expanding market that’s going to get vastly larger is a great place to be. It’s not guaranteed to be particularly profitable, but worst case they can still just sell it off.

Yeah fair. I wonder how difficult it is to get the power infrastructure in place to build a supercharger at the average rest stop.

It's because the market sees Tesla as having more growth potential inside and outside the auto industry than incumbent, largely steady-state automakers.

It also has, I would bet without having actually done the comparison, much more stock market volatility than the overall industry, because assessment of Tesla's likely future state fluctuates a lot more than assessment of the likely future state of the incumbent major automakers.

Most of the big automakers make far more than just cars. GM has a defense division. Honda makes a business jet. Hyundai builds ships. Detroit Diesel was owned by GM, then Daimler, and now Rolls-Royce.

1. Their market share there is many orders of magnitude lower than in auto sector.

2. Their investments in research there are basically 0, compared to big players.

3. Even if they would magically capture large market there, it’s a business that operates on razor thin profits (expect for scams like Enron), that doesn’t drive high valuations.

I think it's because they are the only car company / brand / patent portfolio the market is near certain will exist in 30 years.

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