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by cmsonger 2612 days ago
> It seems like they are almost betting the company on FSD.

IMO they don't have any choice. The more and longer they operate like a car company shipping bigger and bigger volumes, the more their financials will be undeniably trend towards those of the existing car companies and the more their existing market valuation will be hard to justify.

They need something like this to not get traded at traditional car industry multiples.
1 comments
bryanlarsen 2612 days ago
If you just measure based on Tesla's last two quarters, their P/E is just 28. That's high for a car company but pretty low for tech. Self-driving is not necessary to maintain that valuation, only continued growth of the electric car market in general.
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cmsonger 2612 days ago
> That's high for a car company but pretty low for tech.

Yes! Totally agree.

> Self-driving is not necessary to maintain that valuation, only continued growth of the electric car market in general.

Disagree. The key properties of the car business are high capital costs and high variable costs and not huge margins. The key property of the tech business is low variable cost and often low capital costs (but not always) and high margins.

There's nothing "tech" about building electric cars vs. normal cars and 10 years from now the margins and capital expenses of electric car business will be like the existing ICE car business.

So this is Tesla saying: "Yeah, our financials are starting to look like a normal car company, but we've got this thing that you should keep value us even more like a tech company than you do today."

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bryanlarsen 2612 days ago
The market values Tesla like a car business that is growing ~50% per annum.

> 10 years from now the margins and capital expenses of electric car business will be like the existing ICE car business.

Tesla already has margins similar to existing car companies.

> So this is Tesla saying: "Yeah, our financials are starting to look like a normal car company, but we've got this thing that you should keep value us even more like a tech company than you do today."

Yes, they're saying that, but the market is obviously not buying it.

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