[reducesuffering]

While I'm no Tesla investor at a $500b valuation, saying "valuing Tesla like Toyota gets us $20b" is a bit wild.

Tesla last year net profit: $5.5b; last quarter net profit: $3.3b.

Toyota last year net profit: $25b; last quarter net profit: $3.1b.

Toyota market cap: $200b

If you value Tesla based on annual profits, entirely ignoring realized and unrealized growth, They'd still have 23% valuation, $46b.

If you value Tesla based on quarterly profits, ignoring unrealized growth trajectory, they'd have similar valuation, $200b.

[arcticbull]

Ok so if you do that it gets you a 50% downside instead of a 90% downside.

I think future growth in Tesla involves significant margin contraction as they move down market, and as more entrenched players enter the EV space we’ll see margins on existing revenue go down too. This is peak value for them based on first mover advantage alone and it won’t last.

So yeah bear case 90% overvalued and bull case 50% overvalued. And this is after a 62.5% drop from peak value.