Tesla is now firmly established as the world’s most valuable car maker, hovering, just after its record third-quarter profit announcement, around $850 billion (£615bn), which is hundreds of billions more than Toyota or Volkswagen.
Its results – 241,300 cars delivered (up 72% on last year), $1.6bn net profit (389% up year on year) – did little for its share price, but, notably, it barely moved; investors seem satisfied that the growth path justifies the valuation, which has grown more than 18% over this most difficult of years. There’s more to come.
The reaction to the Model Y in Europe in recent weeks talks to both the impending sales growth and the longerterm potential of its brand appeal; for specialists and wider media alike, Tesla is a box office, and that draw will only accelerate as a new generation of enthusiasts can afford the cars.
The new factory in Shanghai is hitting its stride and supplying markets worldwide, and two more are set to open, in Berlin and Texas. More investment is rumoured, for facilities in Japan, Korea, India and maybe even the UK.
Scale brings advantages, too. Average sales prices fell 6% in the past quarter, in part because Tesla is set on using efficiencies to make its entry-level vehicles more accessible. Where you might have expected it tohold its nerve and sit tight at the high-ticket end of the market, Tesla in fact looks happy to edge further into the mainstream.
Talismanic boss Elon Musk has hinted at the development of a $25,000 (£18,000) car. His version of facts can sometimes be open to interpretation, but that does hint at an ambition to take on all comers, althoughit’s possible it’s an attempt to distract as the likes of VW and Ford get serious about EVs. For a traditional car maker to have that much brand stretch would be fanciful, but Tesla is capable of rewriting the rules.
For now, little is off limits: there’s the new, albeit indefinitely delayed, Cybertruck, an all-new Roadster and the Semi truck on the product plan.
Tesla’s foray into Bitcoin looks risky, and income from selling regulatory credits to polluting rivals is dropping off, but it hopes to license its software to other car makers, especially around its controversially – manyargue dangerously – named ‘full self-driving package’.
Having gained its leadership position, it won’t be losing it for a lack of ambition. The process of holding Tesla and Musk to account is important given the scale of the hype. But those who doubted Tesla’s long-termcapability must continue to re-evaluate where we believed lines existed and how far they can be pushed.
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It's worth reading Alex Voigt, a German engineer, on Tesla. He maintains that Tesla is on track to become the world's largest company. Not because they are a car manufacturer, but because they are a leader in software, artificial intelligence and energy system integration. He's no fan-boy, either. What he really wants is for German industry to wake up and smell the coffee, especially BMW and Mercedes, who he says are lagging behind.
Tesla are not only an existenial threat to several foot dragging traditional automotive companies. But also to magazines and some of their journalists who are in denial about the badness of burning stuff to move. C'mon guys stop singing to a dwindling audience of old skool petrol heads - motoring is not all about the noisy fossile gobbler ICe engines, its about the whole driving experience.
Here in Switzerland the Model 3 is currently the 2nd highest selling car, in a country without any real incentives for buying EVs. The Model Y has sold about the same in 2 months as the eTron has all year. It'll almost certainly be in the top 10 in 2021.
The issues are obviously production / planning related. The S and X sales this year have been almost non-existent. Yes there are new cars coming but a VW, Toyota and Hyundai would have had a smooth transistion.
Costs, especially battery costs are dependent on volume so selling volume makes sense. The share price gives them incredibly low cost of capital. I don't think that share price is at all sensible but in terms of sales / market share I think you'd have to be very brave to bet against them at the moment.