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This year they appear poised to make $20B in gross profit, in contrast Toyota is poised to make $40B in gross profit... Toyota's market cap is <$200B Both like

This year they appear poised to make $20B in gross profit, in contrast Toyota is poised to make $40B in gross profit... Toyota's market cap is <$200B Both likely will not continue to grow at the same pace with the dropping availability of capital to consumers. IMO a fair prices for Tesla is still going to be at Toyota's market cap or lower

snovv_crash 4y ago
Yes, but Tesla's margins are much higher. This will probably drop if they ever manage to make a 90s Corolla equivalent and go downmarket, but it seems they still sell as much as they can make for the moment.
- devoutsalsa 4y ago
  At the end of the day, current and future profits are the only thing that matter. I’d rather have 20% of $100 than 50% of $30.
- denimnerd42 4y ago
  Toyota weighs the cost of running individual wires (as a part of the harness) when building the Yaris. The margins are that hard at the low end. Adding any small tiny feature is hard due to the cost they are trying to hit.
  - vardump 4y ago
    Just like every other manufacturer. Small costs add up.
    - denimnerd42 4y ago
      I guess. The luxury manufacturers, like Tesla, will just increase the price or add a subscription if they think they can market a feature. There's no money for that on the Yaris, the customers can't afford whatever it is.
  - guenthert 4y ago
    Can't speak of the Yaris. My 2008 Prius with more than 100kmi runs flawless though. Surely (even accounting for survivor's bias) there would have been ways to cut costs. Methinks there are other motivations in play then just maximizing short term profit. I believe Toyota is in there for the long run. I'm not so sure that Tesla is.
    - kalari 4y ago
      I have had Prii since 2001 (back when it was a sedan). Had good experience with them until recently: 2011 prius with 110K miles had to have it's engine replaced. Decided to do that instead of getting another car because anecdata tells me this was an aberration.
      - reducesuffering 4y ago
        Did you have the EGR valve and cooler cleaned? It's the most notable issue with the 2009-2015 that leads to head gasket issues. Although, some say it's fine until ~140k ish, it could happen earlier if oil changes weren't full synthetic, yearly, or less than 10k miles.
    - timeon 4y ago
      I drive Yaris with similar age, partly off-road. So far it is OK.
  - fckgw 4y ago
    Toyota also sells 10 million vehicles a year, 10x what Tesla does. So yeah, any small change to their model lineup is under scrutiny because it gets multiplied 10 million times over.
- epolanski 4y ago
  Pretty much every carmaker sells out its cars the moment they leave the factory since 2020. That isn't limited to Tesla.
  - vgt 4y ago
    From my experience the IONIQ5 is a much much better car than Tesla3/Y
    - vanilla_nut 4y ago
      The IONIQ5 is also evidence that if Tesla ever did have a lead on "design" of EVs, that lead is now lost. The IONIQ5 looks... cool. When I see one on the street, it stands out, and I want one, even though I don't really care for cars or EVs. Teslas had some of that feeling in the early days, but they seem very pedestrian to me now. Could just be my brain being weird. Or could be the fact that there are Teslas freakin' everywhere in most of the (non-aggressively-red-to-the-point-of-drinking-gasoline) USA now.
      - SyzygistSix 4y ago
        That's because unlike Hyundai, Tesla can produce EVs in large numbers.
    - epolanski 4y ago
      I edited my previous comment but yes. What I wrote is that Tesla isn't anymore in a market where it's the only relevant EV maker and now Porsche, Mercedes and even Korean automakers make much more appealing EVs than what Tesla has in the lineup.
  - bryanlarsen 4y ago
    The carmakers are selling every car they make, but that's now because dealers are rebuilding their inventories. The number of cars sitting in dealer inventory has gone up quite a bit over the past few months. GM can count that as a sale, but at some point dealers are going to stop buying cars faster than they are selling them...
- balaji1 4y ago
  does any Tesla owner have an issue with how long it takes to charge a Tesla? And IIUC it has to be charged more often than a similar Toyota with a full tank.
  - filoleg 4y ago
    No issues, really. Charging at a gen2 supercharger (not even gen3, which are available in the viscinity of where i live as well) goes at a rate between 300-510 miles of charge per hour (depending on the current battery charge) for me. Charging at my apartment building garage is slow (given it only uses a regular 110v outlet, the same one you would use to charge your phone), but i just leave it overnight, so the speed doesn't matter much in that scenario. The charger at work is somewhere in-between, but i can easily get about 70-100 miles of charge per hour. And the costs make it very worth it for me. At the supercharger, my last fill up cost me $16 (i typically drive the car down to 15-20% charge, and then fill it up to 80-90%), and it went up to $20 about twice in my 3 years of ownership (when i was very close to empty). At the apt building and at work, it is free. Meanwhile, even pre-covid (aka before 2019, because that's when I switched cars), my Camry would routinely take about $40-50 to fill up (and I would try to get it filled once I have about 20% of the tank left).
    - balaji1 4y ago
      Ah right so there's chargers at work and at home, then you wouldn't notice the charge times. I have heard folks having to drive to and wait at charger locations, that is a hassle. So that's only until the charging infra at apartments and offices catch up.
      - filoleg 4y ago
        My apartment has no charging infra, it just has a few regular 110v outlets, the exact same kind people have in their houses. As for superchargers being busy, I guess there might be some specific one that is busy at a specific time of the day? Because I have about 4 different supercharger locations within 7 miles of where I am, and that's not counting non-Tesla-branded chargers. For context, I am in Seattle area, and as I am looking out of my window overlooking Mercer St, at any given point in time, I can see at least 2-3 Teslas (not even counting other EVs), which tells me that a lot of people find EVs to be very viable in this area. 3 years ago, there was only 1 supercharger location within that same distance. Every other grocery store and a large public location where people park (like IKEA or a movie theater) has charging spots. My musings aside, overall I agree with you. However, charging infrastructure these days is more viable already than what most people assume. Not everywhere yet, of course, but it is getting there.
- pwinnski 4y ago
  Per the GP, Toyota is making twice the total profit. They might have to sell more than twice as many cars to do it, but as you acknowledge, for Tesla to make that much profit, their margin would also likely decline. Total profit matters more than margins, unless you have reason to believe the margins will hold true at any level.
- itsoktocry 4y ago
  "Selling every car they make" is what every manufacturer does, and they throttle production to accomplish it. This is not unique to Tesla. Do you think there are graveyards of unsold cars out there?
jp42 4y ago
I agree that Tesla has been overpriced. but comparing Tesla with other Auto makes is not apples to apples comparison. In addition to automake Tesla is in business of battery, AI, solar panel etc business, they are vertically integrated and I would say that why they are far ahead of other automakers and hence market cap bigger than other auto makers.
- citilife 4y ago
  Toyota (or partners they are heavily invested in) also do all the items you just mentioned, it's why I used them as comparison. Although they may not directly operate all those businesses, they are heavily invested in multiple companies in the space (impacting value).
- daveguy 4y ago
  Their AI so far appears to be a cagey failure. Waymo and Cruise are easily outpacing them in self driving capabilities. Yes, battery and solar panels are a good additional business. But are they going to make strides better than companies who solely focus on those? Both of those are still high R&D efforts. The more electric vehicles become commodity the less advantage they have. Tesla started with virtually no competition. Now Toyota and almost every other car manufacturer is a direct competitor. It seems that Tesla increasingly provides vertically integrated mediocrity.
  - thwayunion 4y ago
    Also, to GP's vertical integration claim: Cruise is a division of GM!!! GM's choice to not apply their badge to Cruise is very intentional and very smart. Tesla is the naive player here, not the other auto makers.
  - leesec 4y ago
    >Waymo and Cruise are easily outpacing them in self driving capabilities. No they are not lol. Maybe in 2 specific cities you mean?
    - daveguy 4y ago
FredPret 4y ago
How wild is it that they've grown to 50% of TOYOTA
kjksf 4y ago
Where do you get Toyota's $40 B in profit? Last fiscal year Toyota made $17 billion profit, which was less than $19 billion profit 6 years ago. Profit growth rate is the crucial part of the info you skipped. To simplify: market cap is ${CurrentProfit} * ${P/E}. P/E is a reflection of profit (earnings) growth rate. Since becoming profitable, Tesla has been growing profits at 50%+. They are the fastest growing large company in the stock market. That growth is going to continue due to ramp of Giga Berlin, Giga Texas, introduction of cybertruck, Inflation Reduction Act which will turbocharge EV demand in US. Toyota is not growing earnings at all. Things are likely to go even worse in the near future. The EV market share is skyrocketing (25% in Europe, 30% in china) but Toyota has only 1 EV currently that isn't selling well. It's rumored that they are scraping their old EV plans (make EVs based on current platform that was designed for easy manufacturability of both EVs and ICE cars in the same factory) and considering developing a new platform. Platform that won't be available until 2026. EV market share is likely to grow 50% YoY and during that time Toyota won't have EVs to sell. That won't end well. Tesla is severely undervalued based on their forward P/E ratio, which is lower than for companies with much lower growth rate.
- reducesuffering 4y ago
  > Where do you get Toyota's $40 B in profit? GP said gross profit, you're talking about net. > Toyota is not growing earnings at all. Toyota has still grown net profit: 2020 -> $18.7b ; 2021 -> $21b ; 2022 -> $25.4b > Tesla is severely undervalued based on their forward P/E ratio You should refrain from making individual stock picks, and buy ETF/index instead, when you're unable to distinguish the difference between gross and net profit. https://www.investopedia.com/ask/answers/101314/what-are-differences-between-gross-profit-and-net-income.asp https://www.investopedia.com/ask/answers/101314/what-are-dif...
- JumpinJack_Cash 4y ago
  > Tesla is severely undervalued based on their forward P/E ratio "You might want to be friends with me, I'll become President of the United States one day. Up until then you can call me Future President Jack." It maybe less speculative of a statement than all the above assumptions
- 4y ago

snovv_crash 4y ago

Yes, but Tesla's margins are much higher. This will probably drop if they ever manage to make a 90s Corolla equivalent and go downmarket, but it seems they still sell as much as they can make for the moment.

devoutsalsa 4y ago
At the end of the day, current and future profits are the only thing that matter. I’d rather have 20% of $100 than 50% of $30.
denimnerd42 4y ago
Toyota weighs the cost of running individual wires (as a part of the harness) when building the Yaris. The margins are that hard at the low end. Adding any small tiny feature is hard due to the cost they are trying to hit.
- vardump 4y ago
  Just like every other manufacturer. Small costs add up.
  - denimnerd42 4y ago
    I guess. The luxury manufacturers, like Tesla, will just increase the price or add a subscription if they think they can market a feature. There's no money for that on the Yaris, the customers can't afford whatever it is.
- guenthert 4y ago
  Can't speak of the Yaris. My 2008 Prius with more than 100kmi runs flawless though. Surely (even accounting for survivor's bias) there would have been ways to cut costs. Methinks there are other motivations in play then just maximizing short term profit. I believe Toyota is in there for the long run. I'm not so sure that Tesla is.
  - kalari 4y ago
    I have had Prii since 2001 (back when it was a sedan). Had good experience with them until recently: 2011 prius with 110K miles had to have it's engine replaced. Decided to do that instead of getting another car because anecdata tells me this was an aberration.
    - reducesuffering 4y ago
      Did you have the EGR valve and cooler cleaned? It's the most notable issue with the 2009-2015 that leads to head gasket issues. Although, some say it's fine until ~140k ish, it could happen earlier if oil changes weren't full synthetic, yearly, or less than 10k miles.
  - timeon 4y ago
    I drive Yaris with similar age, partly off-road. So far it is OK.
- fckgw 4y ago
  Toyota also sells 10 million vehicles a year, 10x what Tesla does. So yeah, any small change to their model lineup is under scrutiny because it gets multiplied 10 million times over.
epolanski 4y ago
Pretty much every carmaker sells out its cars the moment they leave the factory since 2020. That isn't limited to Tesla.
- vgt 4y ago
  From my experience the IONIQ5 is a much much better car than Tesla3/Y
  - vanilla_nut 4y ago
    The IONIQ5 is also evidence that if Tesla ever did have a lead on "design" of EVs, that lead is now lost. The IONIQ5 looks... cool. When I see one on the street, it stands out, and I want one, even though I don't really care for cars or EVs. Teslas had some of that feeling in the early days, but they seem very pedestrian to me now. Could just be my brain being weird. Or could be the fact that there are Teslas freakin' everywhere in most of the (non-aggressively-red-to-the-point-of-drinking-gasoline) USA now.
    - SyzygistSix 4y ago
      That's because unlike Hyundai, Tesla can produce EVs in large numbers.
  - epolanski 4y ago
    I edited my previous comment but yes. What I wrote is that Tesla isn't anymore in a market where it's the only relevant EV maker and now Porsche, Mercedes and even Korean automakers make much more appealing EVs than what Tesla has in the lineup.
- bryanlarsen 4y ago
  The carmakers are selling every car they make, but that's now because dealers are rebuilding their inventories. The number of cars sitting in dealer inventory has gone up quite a bit over the past few months. GM can count that as a sale, but at some point dealers are going to stop buying cars faster than they are selling them...
balaji1 4y ago
does any Tesla owner have an issue with how long it takes to charge a Tesla? And IIUC it has to be charged more often than a similar Toyota with a full tank.
- filoleg 4y ago
  No issues, really. Charging at a gen2 supercharger (not even gen3, which are available in the viscinity of where i live as well) goes at a rate between 300-510 miles of charge per hour (depending on the current battery charge) for me. Charging at my apartment building garage is slow (given it only uses a regular 110v outlet, the same one you would use to charge your phone), but i just leave it overnight, so the speed doesn't matter much in that scenario. The charger at work is somewhere in-between, but i can easily get about 70-100 miles of charge per hour. And the costs make it very worth it for me. At the supercharger, my last fill up cost me $16 (i typically drive the car down to 15-20% charge, and then fill it up to 80-90%), and it went up to $20 about twice in my 3 years of ownership (when i was very close to empty). At the apt building and at work, it is free. Meanwhile, even pre-covid (aka before 2019, because that's when I switched cars), my Camry would routinely take about $40-50 to fill up (and I would try to get it filled once I have about 20% of the tank left).
  - balaji1 4y ago
    Ah right so there's chargers at work and at home, then you wouldn't notice the charge times. I have heard folks having to drive to and wait at charger locations, that is a hassle. So that's only until the charging infra at apartments and offices catch up.
    - filoleg 4y ago
      My apartment has no charging infra, it just has a few regular 110v outlets, the exact same kind people have in their houses. As for superchargers being busy, I guess there might be some specific one that is busy at a specific time of the day? Because I have about 4 different supercharger locations within 7 miles of where I am, and that's not counting non-Tesla-branded chargers. For context, I am in Seattle area, and as I am looking out of my window overlooking Mercer St, at any given point in time, I can see at least 2-3 Teslas (not even counting other EVs), which tells me that a lot of people find EVs to be very viable in this area. 3 years ago, there was only 1 supercharger location within that same distance. Every other grocery store and a large public location where people park (like IKEA or a movie theater) has charging spots. My musings aside, overall I agree with you. However, charging infrastructure these days is more viable already than what most people assume. Not everywhere yet, of course, but it is getting there.
pwinnski 4y ago
Per the GP, Toyota is making twice the total profit. They might have to sell more than twice as many cars to do it, but as you acknowledge, for Tesla to make that much profit, their margin would also likely decline. Total profit matters more than margins, unless you have reason to believe the margins will hold true at any level.
itsoktocry 4y ago
"Selling every car they make" is what every manufacturer does, and they throttle production to accomplish it. This is not unique to Tesla. Do you think there are graveyards of unsold cars out there?

jp42 4y ago

I agree that Tesla has been overpriced. but comparing Tesla with other Auto makes is not apples to apples comparison. In addition to automake Tesla is in business of battery, AI, solar panel etc business, they are vertically integrated and I would say that why they are far ahead of other automakers and hence market cap bigger than other auto makers.

citilife 4y ago
Toyota (or partners they are heavily invested in) also do all the items you just mentioned, it's why I used them as comparison. Although they may not directly operate all those businesses, they are heavily invested in multiple companies in the space (impacting value).
daveguy 4y ago
Their AI so far appears to be a cagey failure. Waymo and Cruise are easily outpacing them in self driving capabilities. Yes, battery and solar panels are a good additional business. But are they going to make strides better than companies who solely focus on those? Both of those are still high R&D efforts. The more electric vehicles become commodity the less advantage they have. Tesla started with virtually no competition. Now Toyota and almost every other car manufacturer is a direct competitor. It seems that Tesla increasingly provides vertically integrated mediocrity.
- thwayunion 4y ago
  Also, to GP's vertical integration claim: Cruise is a division of GM!!! GM's choice to not apply their badge to Cruise is very intentional and very smart. Tesla is the naive player here, not the other auto makers.
- leesec 4y ago
  >Waymo and Cruise are easily outpacing them in self driving capabilities. No they are not lol. Maybe in 2 specific cities you mean?
  - daveguy 4y ago

FredPret 4y ago

How wild is it that they've grown to 50% of TOYOTA

kjksf 4y ago

Where do you get Toyota's $40 B in profit? Last fiscal year Toyota made $17 billion profit, which was less than $19 billion profit 6 years ago. Profit growth rate is the crucial part of the info you skipped. To simplify: market cap is ${CurrentProfit} * ${P/E}. P/E is a reflection of profit (earnings) growth rate. Since becoming profitable, Tesla has been growing profits at 50%+. They are the fastest growing large company in the stock market. That growth is going to continue due to ramp of Giga Berlin, Giga Texas, introduction of cybertruck, Inflation Reduction Act which will turbocharge EV demand in US. Toyota is not growing earnings at all. Things are likely to go even worse in the near future. The EV market share is skyrocketing (25% in Europe, 30% in china) but Toyota has only 1 EV currently that isn't selling well. It's rumored that they are scraping their old EV plans (make EVs based on current platform that was designed for easy manufacturability of both EVs and ICE cars in the same factory) and considering developing a new platform. Platform that won't be available until 2026. EV market share is likely to grow 50% YoY and during that time Toyota won't have EVs to sell. That won't end well. Tesla is severely undervalued based on their forward P/E ratio, which is lower than for companies with much lower growth rate.

reducesuffering 4y ago
> Where do you get Toyota's $40 B in profit? GP said gross profit, you're talking about net. > Toyota is not growing earnings at all. Toyota has still grown net profit: 2020 -> $18.7b ; 2021 -> $21b ; 2022 -> $25.4b > Tesla is severely undervalued based on their forward P/E ratio You should refrain from making individual stock picks, and buy ETF/index instead, when you're unable to distinguish the difference between gross and net profit. https://www.investopedia.com/ask/answers/101314/what-are-differences-between-gross-profit-and-net-income.asp https://www.investopedia.com/ask/answers/101314/what-are-dif...
JumpinJack_Cash 4y ago
> Tesla is severely undervalued based on their forward P/E ratio "You might want to be friends with me, I'll become President of the United States one day. Up until then you can call me Future President Jack." It maybe less speculative of a statement than all the above assumptions
4y ago