[svnt]

The market cap tells you what you need to know. Is there a way in which Tesla can grow the total vehicle market, expand alone into adjacent protected, high value markets, or reasonably exceed Toyota’s market share? If not, they’re over valued.

They are still valued on $300k per car future numbers from when they were supposed to be renting cars with AI drivers in 2020, and the exuberance and “playing with house money” crowd has just kept the music going.

[voisin]

> The market cap tells you what you need to know.

At the very least, compare enterprise value (market cap + debt - cash & equivalents), so that you are comparing leverage agnostic values.

[svnt]

It is a more complete number to use. Unfortunately, debt (and equivalents, and even cash depending on its location) aren’t always or even often a simple addition or subtraction.

[FireBeyond]

> or reasonably exceed Toyota’s market share

Hah, if only Toyota... At one point, Tesla was worth more than: Toyota, Volkwagen Group, Hyundai/Kia, General Motors, Ford, Nissan, Honda, Fiat Chrysler, Renault, Suzuki, Daimler, BMW, Mazda and Mitsubishi combined. (Plus several Chinese manufacturers: SAID, Geely, Changan, Dongfeng).

[yazaddaruvala]

If Tesla were a car company. However, Tesla is also a fuel-station company. You could just as easily value it against BP or Shell to get better market cap representation.

[tw04]

Not unless they start building power plants. Right now they’re just a gas station owner selling someone else’s oil.

I’m aware of the solar roof thing and it’s more of a press release than a product.

[yazaddaruvala]

Power plant: https://electrek.co/2022/08/18/teslas-virtual-power-plant-fi...

Here is a grid storage project: https://electrek.co/2022/03/22/tesla-megapack-selected-big-n...

[tw04]

>Power plant: https://electrek.co/2022/08/18/teslas-virtual-power-plant-fi...

That's not a power plant... they are producing 0 electricity. They are allowing powerwall OWNERS to act as a grid-scale BATTERY. A battery != a power plant and produces nothing even remotely resembling a real power plant in recurring revenue.

>Here is a grid storage project: https://electrek.co/2022/03/22/tesla-megapack-selected-big-n...

Again, they are producing 0 electricity, they are selling a battery to someone else to use.

Let me know when Tesla starts building their own solar farms or nuclear power plants and using it to power their supercharger network. That will be the only way it's at all comparable to Shell.

[yazaddaruvala]

If you don’t consider power price arbitration a “power plant” when even the US Department of Energy does, then I’m not sure how to bridge our gap.

Meanwhile, here is a Tesla subsidiary project https://www.bloomberg.com/news/features/2021-03-08/tesla-is-...

Tesla is also constantly vertically integrating. The writing is on the wall. If you’d rather not see it, then ok, that is your prerogative.

[tw04]

>If you don’t consider power price arbitration a “power plant” when even the US Department of Energy does, then I’m not sure how to bridge our gap.

Except they don't, they specifically call it out as a "virtual power plant" because it doesn't produce power, and isn't regulated by the rules of a power plant that actually generates power.

>Meanwhile, here is a Tesla subsidiary project https://www.bloomberg.com/news/features/2021-03-08/tesla-is-...

So again, a battery, not a power plant, not actually producing any power. And at a cost that will be dramatically undercut by the wave of cheap LifePo4 batteries that make significantly more sense for grid storage and are slowly trickling into the US now that patents have expired.

>Tesla is also constantly vertically integrating. The writing is on the wall. If you’d rather not see it, then ok, that is your prerogative.

The "constant vertical integration" the Tesla fanboys constantly screech about is just a lot of marketing around doing exactly what every other auto company has done in the past. The fact they're finding secondary uses for their battery tech is great. But across the board, outside of EV's, they produce a vastly inferior product. The powerwall is an inferior product to countless existing home battery solutions. Their "solar roof" was literally a bailout of his cousin and is vastly inferior to existing solar panel options, and grossly overpriced. What's their total install base? 1,000 houses? Have they even hit that with the "solar shingles", not the bait and switch overpriced solar panel options?

I can't even tie a Tesla charger into my utility provider's night and weekend plan, I have to use a chargepoint or enel charger. So tell me all about this massive lead they've got.

[svnt]

It’s the attempt to fulfill the story they’ve been selling since the beginning, which is exactly the EV-company-but-with-sticky-SaaS-revenue you’d expect from SV.

A problem when you try to span those markets is you lose access to support from other major companies because you open up too many competitive fronts.

A further problem is when you try to reproduce a model (oil companies) that is dependent on finding and securing resources when almost everyone has a sufficient and unending oil-well-equivalent permanently incident on their roof.

[DoesntMatter22]

What sort of a mega pack business does Toyota have? What are the long term prospects for their Robot? What tech is Toyota going to sell to other car companies to make money?

Why is Toyota investing in hydrogen when it makes no sense? What is Toyota going to do about it's massive debt.

These are some of the reasons Tesla is valued at what it is and Toyota is what IT is. Toyota has nothing exciting on the horizon that is going to dramatically change things for them.

Not to mention they make a pittance per car compared to Tesla.

[svnt]

Others discussed hydrogen. Frankly it seems to me to be a bad bet by Toyota. I assume they have better information than I do, but they also may have been prevented from a reasonable position on battery vs hydrogen by some internal politics or other dynamics.

The robot: Tesla seems to have approximately reproduced the state of Japanese robotics in 2000 (Honda Asimo) using technology that has seriously advanced in twenty years. I am not qualified to say what the future value of that is, or why battery packs are a competitive advantage to something that never leaves the home.

Tech to sell to other car companies: Humans run the other car companies. What will they do if they recognize a competitive threat with a technology advantage? Will they say “great, let’s buy that from our competitor since they’re clearly superior”? Or are they more likely to say something like “let’s figure out a way to neutralize or eliminate this advantage” and then go about doing it (even as a collective)?

Tesla hired Toyota execs to build their manufacturing line. There is little chance that Toyota could not, if it could get out of its own way, do what Telsa is doing from a manufacturing and technology perspective. This to me suggests that others will, even if Toyota culturally cannot make it happen.

The profit per vehicle available is primarily indicative of competition. Toyota is a mature company in a mature segment with a lot of competition. Tesla is entitled to those numbers as long as they can maintain them and stave off competition. Some people think they will be able to do that for a long time. I’m not one of them.

Tesla’s barrier in justifying their market cap is not only the other car companies, of whom there are roughly a dozen with similar revenue or higher. In the process of capturing the value they are talking about, their competition becomes major portions of the structure of global markets in the energy and transportation sectors, at least.

[_hypx]

Hydrogen is a fundamentally superior technology to batteries. It is Tesla that will eventually have to move on to fuel cell cars, not Toyota doing the other way around.

[svnt]

To which fundamentals are you referring?

If you factor in production, transmission, and combustion, tank cycling, and failure modes, is it still superior?

[_hypx]

If you realize that fuel cells are electrochemical systems, you'd also realize that there is no fundamental difference between how a fuel cell and a conventional battery works. Fuel cell cars are also EVs, just without the expensive and heavy battery.

[svnt]

I understand that fuel cells are electrochemical systems.

I also understand that there are fundamental limits to their physics and to the storage and transfer of hydrogen that put it at a severe disadvantage to batteries in these respects.

This does a reasonable job of explaining it:

https://www.forbes.com/sites/jamesmorris/2020/07/04/why-hydr...

This is more technical and lays out the advantages and disadvantages of both: https://c2e2.unepccc.org/wp-content/uploads/sites/3/2019/09/...

Batteries also have the practical advantage that if a charging cable fails it does not with some probability spontaneously ignite into an invisible 1400 C flamethrower.

https://www.sciencedirect.com/science/article/abs/pii/S03603....

[FireBeyond]

> What tech is Toyota going to sell to other car companies to make money?

What tech is Tesla going to sell to other car companies? Beyond allowing access to a charging network?

Other manufacturers want as little to do with Tesla tech as possible.

[_hypx]

Hydrogen is a fundamental superior technology compared to batteries. If anything, Toyota is decades ahead of Tesla. Everything Tesla is aiming to do is just a pale imitation of what Toyota is already achieving.

[mensetmanusman]

It's not fundamentally superior due to the challenge of storing hydrogen at high densities.

It's superior in some cases where you have an existing pipeline network.

[_hypx]

Hydrogen storage has a higher density than li-ion batteries.

[kelnos]

And yet I've seen at most a handful of hydrogen-powered cars since they've been available commercially, and I've only once seen a refueling station for them.

Superior technology -- assuming it is; I have no idea -- often doesn't win.

[_hypx]

The problem with that thinking is that BEVs are guaranteed to be more expensive in the long run. A hydrogen car is basically an EV minus the most expensive part. That is going to be a decisive advantage.