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Tesla’s stock price and market cap are down considerably this year, on the back of slightly drooping sales (instead of 50% growth year over year), rumors of the more affordable Tesla being canceled, and a slow Cybertruck (and Semi) ramp-up. Tesla Full Self Driving (Supervised) has improved greatly with version 12, but there are still broad concerns that it is far from robotaxi capability (Elon Musk seems to disagree, but he has seemingly disagreed for about 8 years, since 2016). Nonetheless, there is still a lot of faith in Tesla’s continued growth, in Tesla AI, in Tesla robotics, and in Tesla in general — especially on Wall Street.
Don’t believe me on that last part? Just look at the fact in the headline: Tesla still has a market cap that is larger than that of the three next most valuable automakers combined, and you can even throw in Hyundai or Kia or various other automakers and Tesla is still at a higher market cap.
Screenshot from Companiesmarketcap.com
If you want to take a more American perspective, Tesla is worth more than Ford, GM, Stellantis, Honda, Volkswagen, BMW, BYD, Hyundai, and Kia combined. That’s a pretty wild comparison. TSLA > Ford + GM + Stellantis + Honda + Volkswagen + BMW + BYD + Hyundai + Kia. That has to assume that Tesla sales rebound and get back to growing at a massive clip while these other automakers’s sales stagnate or even shrink, or it has to assume insane future revenue and profits from AI, robotics, or unicorn kisses.
One of the stock stories of the past decade is how much TSLA ran up and up and up the stock charts. As it did so, the arguments above were made in different forms, and we published perspectives on these matters repeatedly while tracking Tesla’s rise. So, these points are nothing new, but there’s now a bit more of a question of where Tesla sales are going. And there’s always the question of what the future actually brings, especially when it comes to big unknowns like AI, robotaxis, and new robotics.
Though, all of that said, I have to admit that I have a hard time at the moment seeing Tesla as being worth more than Ford, GM, Stellantis, Honda, Volkswagen, BMW, BYD, Hyundai, and Kia combined. These automakers have started to electrify to a significant degree, have their own R&D programs, and have many loyal customers sticking with them. Tesla’s path to 50% sales growth a year has become nebulous, unclear, and even concerning — and that’s just for the next couple of years, let alone the next 5 or 6. Beyond that, it’s hard for me to see Tesla’s FSD approach being successful anytime soon, if ever. With all of that being the case, the imbalance on the stock market gets more questionable, fragile, and difficult to see sustaining.
I could be wrong. Many have been wrong in the past on Tesla and TSLA. But I saw clear reasons to believe in Tesla’s path to 2020, or even to 2023. I wrote about it for years (since 2012) and basically expected what came to pass would come to pass. Looking forward, it’s much more difficult to feel comfortable with huge growth plans and unprecedented AI enabling unprecedented profits. We shall see. In the meantime, though, the data and chart above make me nervous for anyone heavily invested in the TSLA dream, and make me think a crash could be coming.
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