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Comment by ano88888 | Hacker News Reader

and yet Tesla PE is still sky high even during a bear market. Their stock value cannot be justified unless you believe they will continue to dominate EV market, they will have auto driving cars replacing uber , they will have Tesla bots in every office ,home and factory, their ai software will dominate the market.

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People have been saying that for years, but their growth and margins continue to be incredible year after year.

And it seems like other manufacturers, even if they make good EVs, won't be able to scale their battery production quick enough. Meanwhile Tesla is quite ahead in this department.

Both statements can be true at once. Tesla can have incredible growth and margins for many years and still be overvalued at its current price. (I personally believe both are true: Tesla obviously does have a lot of potential to grow from where they are now, but their stock price implies a level of dominance which seems unrealistic).

I don't own or plan to buy any TSLA at current prices because I think too it might be a bit overvalued. But I disagree with the people that just look at the PE and think that it's an order of magnitude overvalued.

The Tesla stock price is based off of the cult-of-personality followers of the CEO and his promises that FSD, Cybertruck and Tesla Semi are _just around the corner_

The latter two are just a matter of mass production, intentionally delayed in favor of other priorities. FSD is certainly possible, and good headway is being made on it. When it’ll be as good as a human however is an unresolved matter setting aside the hype and speculation.

Nothing is ever just a matter of mass production. Scaling brings its own, massive problems, some of which Tesla experienced with the relatively simple Model 3.

You're right, scaling is another topic. If you can produce 5 prototypes you can produce 500 of them. Making that happen at scale in a timely manner requires introduction of automation, assembly lines, humans, checks and so forth. However, I argue beyond being laborious it's not any sort of impossibility as compared to something like FSD.

"A matter of mass production" is like saying step 1 draw a circle, step 2 draw the rest of the owl.

The factory is the hard part of car design.

The Cybertruck only recently had the design finished ..

You forgot, they will solar-roof every house, solve traffic, replace public transport, and provide transportation in Space and on Mars.

They might actually deliver on the space thing.

As far as I know there is a single Tesla car in space and it's not usable. I won't hold my breath for a second one.

Rapidly reusable rockets? Because that was their mantra for the last ~10 years and no progress has been made so far (that I know of). They haven't done anything so far that has fundamentally changed the space game.

Their stock value is somehow correlated with bitcoin, that suggest the same people are investing in both for similar reasons.

If you just look at their cost advantage, their war chest, and construction plans, you can pretty much extrapolate that they will be a major car manufacturer by the end of the decade with volume sales ranging well over 10M vehicles unless something happens. They seem to be well capable of creating more production capacity. They seem to have no demand problem. So, there are lots of good reasons to assume they might be growing quite a lot in the next years.

Their expressed goal is actually closer to 20M vehicles long term. That would be on top of their plans in the energy sector (batteries, virtual power plants, etc.). And on top to eventually have a cheap, driver less car on the road. That last one is a bit of a controversial goal and you may have some reservations about whether they can or cannot do that. But if you are an investor you might reasonably lean one way or another and buy accordingly.

If you look just at their current size and assume they cannot possibly do more and grow, then yes, you'd be right to be skeptical. If on the other hand you look at what they did with quarter on quarter growth (until the current one), and extrapolate that some years in the future you might start wondering where that might end up and you might see a path to Tesla becoming quite big indeed.

The reason the share price is high is obviously that there are a lot of share holders that believe that Tesla is well on their way executing the necessary steps to reach all of their ambitious goals. They seem to have a head start on other manufacturers both in volume production and cost savings. That won't last forever. But at the scale of Tesla's ambition, having a lot of control over their suppliers and R&D related to that is a smart strategy if you plan to grow aggressively and something that most of their competitors are still figuring out. Maybe some of them will and maybe some of them will have to sell products at a loss for some time to come just to keep up.

IMHO, the biggest threat for Tesla are not European or US companies but Chinese manufacturers. The market is plenty big enough for the both of them though. It will be interesting which of the ICE car manufacturers survive this decade.

Tesla stock is like crypto. People are HODL and will sink with the ship to the bottom but the "captain" will bail long before then if he doesn't already have one foot on the pier...

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