[TX0098812]

Can anyone explain how Tesla can be valued so high?

They're valued twice as high as Toyota at around 1/12 the profits of Toyota. P/E is almost 600 so they'd have to overtake Toyota's profits by a significant margin to justify their valuation.

So far this looks like pure hype.

However... they are way ahead in terms of technology in a number of areas and I guess they could also make money from things like their super charger network and batteries?

So maybe they're better positioned for the future / more diversified than Toyota and therefore have greater potential?

[noveltyaccount]

Two thoughts: 1) the stock market is irrational and FOMO bubbles go to the moon 2) the market is perfectly rational and perfectly prices in future considerations; Tesla isn't an automaker, they're an energy company with tons of upside ahead.

¯\_(ツ)_/¯

[nscalf]

Yeah, valuations also bake in expectations of future earnings. Beyond normal expectations, growth stocks like this and tech companies get big multiples. My theory is that retail investors behavior is more like angel investors with tech companies now. My guess on the valuation right now is that a huge amount of people think Tesla becomes the worlds largest car company and redefines the industry. I mean, they kind of already have redefined the industry, the only question left is how much of the change do they capture as value.

[dehrmann]

I don't really believe in Musk and Tesla, but I'm not a bear (I have no idea what direction retail investors will take it), and I respect Tesla for proving that lithium ion batteries are viable for powering cars. The rest of what Tesla does is over-promise, under-deliver, sloppy manufacturing, dangerous, experimental products, and a dream.

[dehrmann]

Tesla's primary product is Elon Musk, and people want to be a part of that story.

[aeternum]

The valuation reflects the idea that they eventually will overtake Toyota's profits significantly.

Toyota continues to focus on hybrids rather than EV. A questionable gamble.

[njharman]

> So far this looks like pure hype.

So far, the last 5 years?

> better positioned for the future

Yes, they are a battery company. Positioned to capitalize on the end of the Fossil Fuel age.

[nickik]

https://news.ycombinator.com/item?id=27634348