Double-WTF Chart of the Year Update: Tesla Becomes Most Valuable Automaker, Blows by Toyota

To mark this moment in the history of insane stock prices where a tiny automaker with a global market share of 0.5% and a big loss in 2019 became the most valuable automaker in the world.

By Wolf Richter for WOLF STREET.

Shares of Tesla jumped 3.9% this morning to $1,130, which gave the automaker a market value of $210 billion. It thereby finally surpassed Toyota, the formerly #1 most valuable automaker in the world, whose shares declined 1.6% in Tokyo at the close today, giving it a market cap of ¥21,719 trillion – or $202 billion at today’s exchange rate.

That Tesla – a tiny automaker with a global market share of 0.5% (half a percent) that lost $862 million in 2019, when most automakers made money because those were the Good Times – has become a supernatural phenomenon led by a guy who is regularly seen walking on water, is proven beyond reasonable doubt by the double-WTF round-trip chart of the year (stock prices via YCharts):

Tesla has gained $143 billion in value since March 18 this year, more than tripling its value from $66.6 billion to $210 billion in the three months during which the Fed threw nearly $3 trillion at the markets to accomplish precisely this kind of feat. And the people and algos that buy the shares have been outdoing even themselves to accomplish what the Fed wanted them to accomplish.

Tesla is burning large amounts of cash and constantly needs to raise new cash to burn. And so, on February 13, it raised over $2 billion from investors by selling them more shares. That will keep the company fueled for a while.

When investors are so eager year-after-year to hand the company new money to burn, while driving up the share price, the company is under no pressure to ever stop its cash-burn machine. It can just keep burning those investors’ cash, and Elon Musk can continue walking on water.

Now there is the possibility – and likelihood – that S&P Dow Jones Indices will induct Tesla’s shares into the S&P 500 Index at a ridiculous valuation – which is not to say that this valuation couldn’t get even more ridiculous, since tesla is a supernatural phenomenon, led by a guy who walks on water.

Tesla delivered 367,500 vehicles globally in 2019. The entire auto industry delivered 72.6 million vehicles globally. This gives Tesla a market share of 0.5%. Tesla is a tiny automaker among giants.

But it has shaken up the giants in recent years, and it got them to react and develop EVs, and they’re now all developing and building and selling EVs – and that’s a good thing, and kudos to Musk for accomplishing that. No one else before him had been able to shake up the industry like that.

But now, for the first time, Tesla has real competition in the EV segment – and that competition is piling more and more models later this year and next year, and in future years.

In terms of Tesla beating Toyota as the most valuable automaker, here are some fun data points that the market, of course, couldn’t care less about:

  • Toyota’s annual revenue in its fiscal year (ended March 31, 2020): $275.4 billion. Net income: $19.1 billion.
  • Tesla’s annual revenue in 2019: $24.6 billion, less than one-tenth of Toyota’s revenues; Net loss: $862 million.

And yet, Tesla is worth more than Toyota, and worth more than any other automaker out there, and worth more than just a small number of US companies. This simple fact just underlines how relentlessly insane this market has become.

Here are the 84 companies whose bonds the Fed bought, and the 16 bond ETFs it now holds. Read… Fed Discloses it Bought Tiny Amounts of Corporate Bonds, Including a Whopping $15.5 Million (with an M) in Junk Bonds

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  171 comments for “Double-WTF Chart of the Year Update: Tesla Becomes Most Valuable Automaker, Blows by Toyota

  1. VintageVNvet says:

    Thanks Wolf for another of your great summaries of this particular part of the current crazy situation.
    You may (or may not) have noticed that I have not been my usual commenting self, mainly because of what you point out in this article.
    Crazy is being polite, and, as an olde timey swabie, I can guarantee you that I could, and probably should, add some really and truly egregious words, but I will not, due to trying to be polite on your site, being stunned far shore, never having seen anything like this after 70 years watching various markets, etc.,,,
    Yours is one of the only sites I have found that is ”telling it like it is” rather than toeing the line of the current ”holier than thou” MSM, spouting virtue, pablum, ad nauseum,,,
    Thanks again

  2. nick kelly says:

    I’m going to take a guess: I think it was Tesla that provoked WR’s first highly successful short. When it hit 900 he couldn’t help himself.

    • Wolf Richter says:

      Actually no. I shorted the market (SPY) at the end of December and covered the short in mid-March. That 900 WTF moment was in the middle of it.

      • MarkP1950 says:

        If you do a study of charts of disruptive products, the Tesla chart is what you see. If it’s 6 months early, OK we will ride it out. The ICE companies are in big trouble.
        Have you studied the work of Tony Seba / RethinkX? You can see how the world is coming to a HUGE shock.

        • Wolf Richter says:

          I have seen lots of charts that looked like Tesla’s chart, and those companies are now gone.

        • DeerInHeadlights says:

          Lol @ WR. It’s comments like these that give away the complete noobs. Imagine the pain these guys are in for when valuations come back to earth from fantasy land, i.e. if the company manages to stay alive.

        • chase metz says:

          wow; download the report and simply read the summary;

          to paraphrase; after exhaustive research we conclude that by 2030 (that’s 9.5 years or 114 months or 3400 days) drum roll please…. important to dramatize

          95% of all U.S. passenger transport miles

          will be in electrically powered fleet vehicles eliminating personally owned transport;

          can you believe that someone would actually attach their name to such drivel; same degree of incredulity I have for TSLA

        • Marc D. says:

          Even if you think Tesla has a good future ahead of it, Toyota is probably the best car company in the world. They have 11x the revenues of Tesla and much bigger profits (Tesla of course doesn’t even have any profits).

          So for Tesla to be more valuable than Toyota is ridiculous IMO. I can understand how Tesla might be more valuable than Ford, which has been struggling lately. But Toyota? Ridiculous.

  3. gorbachev says:

    I admit I’m excited for the pickup and the semi.Finally

    modern design.

  4. Jdog says:

    Wolf, can you see a good reason not to short Tesla?

    • chillbro says:

      Yeah, you are going to lose your money before Tesla fails.

    • Wolf Richter says:

      Yes, $2,000 a share 🤣

      These shares are so detached from anything that they can go anywhere. The zoo has gone nuts. So you cannot apply reason here.

      • MCH says:

        I think I heard somewhere TSLA $10K. Might have been from the same guy who predicted AMZN $2K. Hey, he is doing well there.

        But who doesn’t like dancing elephants and monkeys hurling poo at birds in a zoo.

        • Noelck says:

          Cathie Wood and Ron Barron are both huge Tesla stock bulls. With a bear case of $1,500 and bull case of $15,000. They are huge promoters. What they don’t tell you is they trade in and out of this stock and are usually selling when they are promoting.

          Bethany McLean did a not too flattering article on Telsa and the stock seems easy to manipulate. This is not a stock to play with short or long.

      • Trinacria says:

        indeed, the inmates now run the asylum!!!

    • c1ue says:

      Yes, because if it is, in fact, a massive accounting scam – there’s no way to tell when it unravels And you can get killed in the meantime.

      • nick kelly says:

        Apart from the usual scam that has all stocks overvalued, GAAP, it isn’t an accounting scam. They tell you they lose money on every car. But if you can sell stock you don’t have to make money.

        In an accounting scam the stock price looks reasonable, based on lies. Tesla’s looks insane, basically assuming that all cars will soon be E, and that only Tesla will make them.

        In the super litigious US, it is amazing they are still calling them self-driving.

        • c1ue says:

          No, I mean an actual accounting scam – a la Enron or Worldcom.
          Nobody even looks at GAAP anymore, at least for tech companies, so issues with GAAP are hardly relevant.
          However, from a fraud perspective, there is outright faking of results, overstating of cash, etc etc.

      • Yes and they could get bought out at a premium to share price, in a deal that spins off the uglier parts of their debt. (Maybe they should do like Ford and dump the car business and concentrate on the PU?) If a buyer can raise 200B+ at a lower interest rate than Tesla there is arbitrage. Improving the debt profile in a buyout would improve profitability and enhance shareholder value. As long as Fed can cherry pick corporate debt (but not insolvent companies!) the buyout solution is risk on.

  5. chillbro says:

    OP is salty and hates success of others :P

    Telsa stock is like the housing market, it only gets more expensive on bad news.

  6. MiTurn says:

    Tesla is building a plant in Germany. They’re up and running in China and, of course, in California. Soon to be in Texas, too.

    I hope they don’t fail.

    • Wolf Richter says:

      As long as the share price is high, Tesla cannot fail because it can always sell more shares and raise more money. The problem arises if the share price drops into the single digits, which will make it very difficult to raise more money.

      • ewmayer says:

        “The problem arises if the share price drops into the single digits, which will make it very difficult to raise more money.” — No worries on that front, because should any such scary price-discovery even threaten to occur to the Everything Bubble, the Fed will begin buying stocks directly, and you can bet disrupto-unicorns like TSLA will be high on Jerome & Co’s must-keep-inflated list.

        And for those who may think the above is surely sarcasm, I assure you it is not. The Powell Fed, after starting quite-promisingly in terms of unwinding its bloated post-GFC balance sheet during the previous several years’ good times in the bubble markets, has now gone completely bonkersville in the opposite direction and revealed itself to be the most hyperactively we-are-way-beyond-our-charter-and-mandates-here activist Fed in history. Unless Powell & Co are forcibly separated from the Ctrl-P buttons on their money-creation keyboards – and fat chance of that happening, with Trump needing the bubble to keep going to have any shot at re-election – they will literally print any amount of digi-fiat to keep this Ponzi-of-their-own-creation from imploding.

        • Coca Cola says:

          Let’s go with everything you just said being spot on and then throw in an abrupt presidential and congressional regime change in January. How does that fit in the Tesla glovebox?

      • Kasadour says:

        Taking note of your comment- Tesla is in the business of raising money and not in the business of making it. This sounds peculiarly like the scheme of a Ponzi.

    • Trinacria says:

      not to worry as folks out there buy shares of companies in bankruptcy and use scrabble games to pick stock symbols. If anyone wrote a fictional novel portraying this, the editor would tell the author….”too far fetched, you need to tone this down a bit”….it needs to be reality…and, the reality check that awaits this world is going to be so brutal…

      • DeerInHeadlights says:

        It’s definitely the Great Gatsby-levels of extravagance taking place in the markets.

  7. Dos Tacos Mas says:

    Guess Herb Stein was wrong:

    “If something cannot go on for ever, it will stop”

  8. MonkeyBusiness says:

    Some guy was doing an analysis on Tesla’s financial statements and his conclusion was : the way Tesla is accounting for warranties is a fraud at the level of Wirecard.

    • Scott I Reimers says:

      link please?

    • Bobber says:

      That’s wrong. I have no desire to protect Tesla, but Wirecard over-reported its cash balance by $2B. That’s a LOT more impactful than fudging some warranty assumptions, even that claim against Tesla were true.

      The overvaluation of Tesla is in plain sight, based on common sense. There is no reason to point to accounting fraud to say it’s overvalued.

      • c1ue says:

        Over-valuation can occur in a lot of ways. Simple stock market manipulation would be one.
        Another would be misreporting what cash they actually have.
        I’ve seen analysis that says that the amounts of interest income generated by Tesla’s supposed cash stockpile is ludicrously low.
        The possibilities are endless.

  9. Engin-ear says:

    Why such a valuation?

    It is certainly being discussed in headquarters of Toyota and the like.

    I would be interested to hear Toyota ‘s opinion, unfortunately current golden rules of corporate communication will prevent Toyota’s staff from commenting.

    The possible deem reason I see is that with all ICE cars bashing, the carmakers are in significant overcapacity in ICE segment specifically. Not sure if it easy to convert a ICE plant into EV plant. And what becomes of intellectual property on ICE techs that looses the speed.

    And Tesla being young should be exposed much less to social liabilites. And less sunk costs.

    And being smaller, it has more moving abilities.

    And being less predictable (mind blowing market valuation history), investors have more room for dreams and hopes.

    And Musk is exceptionnal.

    And all can change in several years.

    Nokia and Blackberry were today’s Apple 20 years ago.

    • c1ue says:

      Nokia and Blackberry were still young companies in an emerging market 20 years ago.
      The same can’t be said for automakers and car manufacturing.

      • intosh says:

        Bingo!

        Another difference is that Tesla needs to spend huge amount of money to build factories, charging network and the cars. Apple outsources all that and can therefore scale fast and easy.

        Another parallel these people like to mention is Amazon when it comes to spending and losing money. Amazon built its infrastucture that underpins all their other highly scalable businesses. Its warehouses, its online portal (amazon.com) and its cloud infrastructure (AWS). Does Tesla have similar strategy? Not really, from what we can see.

    • Harvey Mushman says:

      Ah yes Nokia. My favorite phone ever was a Nokia N9. Not an iPhone, not an Android, but a Linux based “meego” operating system that Nokia had developed.

      • Andrei says:

        yeah, MeeGo was cool. I lived in Finland in 2011 and still vividly recall the shock for Finns when Elop started talking of the “burning platform” and switched to Windows ME…

      • Doug says:

        Nokia might deserve a look $4 per share. They’re reinventing themselves to be an alternative supplier for 5G equipment, to replace Huawei. They just won a $400 million deal for 5G in Taiwan.

        Anyone agree?

      • Realist says:

        Meego was cool indeed, beneath the nice interface did run unfettered Linux. Another cool device was the N900, the Maemo/Linux based powerhouse that did evolve into the N9.

    • Prof. Emeritus says:

      Actually ICE tech could still be saved via the adoption of natural gas as a fuel – VW, Fiat and truck manufacturers have been betting on it, but the problem is most legislations are forecasted to tax CO2 – basically the only greenhouse gas nat.gas engines produce. Hydrogen fuel-cell (Toyota’s image of the future) is a sort of “best of both worlds” alternative, but it’s also a dark horse basically nobody knowing what it looks like in practice.
      Though to be fair I don’t think car manufacturers will be the biggest loosers – converting a factory to EV production is simple compared to converting an oil refinery to produce diesel and heavy fuels for the shipping industry but no gasoline for cars. That part of Musk’s vision still does not compute.

      • Some utilities are talking about getting out of NG, though LNG is still viable. Pipeline transport is the issue, perhaps when LNG is delivered like home heating oil the business will make more sense?

      • David Hall says:

        UPS has been using compressed natural gas in its delivery trucks for years. Diesel trucks emitted exhaust much more toxic than gasoline engines with catalytic converters. Europe is looking at hydrogen as a clean fuel for transport. Electricity is as clean as the source, whether it is coal or windmills.

        I looked at new Chevy cars online. A dealer in a town up the coast has them marked down well below sticker price. I can not see much charging infrastructure for a Tesla. Your basic condo association does not have charging stations.

        • roddy6667 says:

          In the city in China where I am, about 50% of the 6500 city buses are CNG, as well as 99% of the taxis. CNG filling stations are everywhere.

      • c1ue says:

        LNG cars exist – I’ve even driven one.
        The problem is infrastructure. Putting in EV charging stations is relatively easy compared to putting in NG refill stations.
        And this infrastructure issue is magnified because gaseous fuels are much harder to handle than liquid.
        Which is why talk about hydrogen fueled cars is utter bullshit. Hydrogen will literally leak out of anything because the atom is so small; only the rate differs by container material. Then there’s the difficulty of getting hydrogen…

        • Wolf Richter says:

          Some ports now require cleaner fuels for drayage trucks that operate there, and LNG has become a big favorite. Works very well. Obviously, these trucks stay close to home, shuttling containers between ships and whatever the next stage is, so the infrastructure to refuel the trucks is easily managed on site.

        • c1ue says:

          Sure, there used to be an LNG refueling station beside the PG & E substation on Fremont and Folsom – but I think it is closed now.
          A port is probably a great place for LNG because the forklifts tend to be LNG gas fueled, for whatever reason.
          Expanding that capacity across (or building a comparable) gas station network? Not so much.

  10. MonkeyBusiness says:

    Also seems like car sales is better than expected? Still 33% down, but could have been worse.

    That’s America for you.
    “Americans would struggle to come up with 400 dollars for emergencies”
    “Use stimulus check to go out, buy a car and drive straight to the nearest foodbank.”

  11. Wisdom Seeker says:

    Yeah, it’s a bubble, but just like the soon-to-implode AOL buying Time Warner …. Tesla can do buyouts of other major automakers now. Or just buy them up in bankruptcy.

    Alternatively, on the optimistic side: what could a dynamic, forward-moving (risk-taking and maybe slightly insane) company like Tesla do with the assets of Ford or GM to expand into new production lines and revitalize US auto manufacturing?

    • c1ue says:

      Except buying other major automakers would result in Tesla’s multiple falling to the industry average.
      Which would be a net loss.

      • Wisdom Seeker says:

        History full of examples of trendy companies buying up other assets, making them look trendy, and getting the inflated multiple based on “synergies” and “growth prospects”.

        If Tesla tried to BE ford or GM, then no dice.

        But if Tesla absorbed Ford or GM the way Google or FB absorb other tech companies?

        • c1ue says:

          That’s a totally wrong analogy.
          Google/FB eat small companies. Even Whatsapp, despite its price tag, was a tiny company.
          In contrast, Tesla would be buying companies that have 10x or more workers and produce 10x or more product.
          Talk about wag the dog.

    • Anthony A. says:

      Tesla would not want to assume all the liabilities of a legacy auto maker, that’s one big reason why it would not buy one.

    • Lisa_Hooker says:

      Tesla will acquire regional federal reserve banks, one at a time, by issuing more Tesla stock.

  12. Mike says:

    Tesla is just the icing on the cake of the whole overvalued by any measure stock market. I’m at the point of capitulating and going all in to the market as it’s clear that the FED will never let true market prices be discovered. The market must always be supported and go up never mind if companies use non-GAAP accounting, have declining revenue or negative earnings.

    I’ve now been burnt twice missing out on the FED put. There are no other “investment” options as we now have QE to infinity. Buy buy buy…..

  13. BuySome says:

    Dear Mr. Richter, we at Tesla would like to excerpt from your article for use in our shareholder news. Thus we can use “Tesla…walks on water.” and ” Tesla…is among giants.” If you can please sign a waiver we will reward you with some of our latest issues of pretty promises. (fine print…not endorsed by EM for any recovery of losses.) Thank You.

  14. Phoenix_Ikki says:

    I give up…throwing in the towel. Getting to a point of self induced madness to try to make sense and look at things in anything remotely fundamental. The whole world is a giant WTF now, I guess this is the new normal that will last for many years to come, and just get used to it I supposed.

    What’s next? EM for president? I am sure if he wants the job, plenty will vote for him. Turning a money losing company into the world’s biggest automaker by market cap is no easy task, if anything he sure got major skills in milking that cult of personality.

    • Matt says:

      What do you expect? You’ve got free trading, fractional shares, and baristas making more than they did making coffee. T is one of the top owned stocks for the younger people. They don’t care about fundamentals. Just buy the Cramer Covid-19 index.

    • Norm says:

      He is not ‘American born’ and cannot become president.

      • intosh says:

        Anything can change. We live in a crazy era, remember? Disruption is king! Just start a viral social media movement suggesting EM as US President.

        Money. Check.
        Social media might. Check.
        Lies and overpromising. Check.

    • Just Some Random Guy says:

      I’d vote for Elon in a heartbeat. But he was not born in the US, hence not eligible.

    • Mike says:

      “Getting to a point of self induced madness to try to make sense and look at things in anything remotely fundamental. The whole world is a giant WTF now, I guess this is the new normal that will last for many years to come, and just get used to it I supposed.”

      Towards the end of the Dot Com bubble, statements like this were common. I really believe it’s not a matter of “if”, but of “when”. The problem, always, is trying to predict the “when”. You can’t.

  15. MonkeyBusiness says:

    Musk sold a number of his houses recently. Probably preparing for an escape to New Zealand with his old Paypal buddies like Peter Thiel.

    A number of Silicon Valley elites have agreed that if things go badly here in the US, they’ll all fly together in a private plane to the land of the Lord of the Rings. This is not fiction. Just google it.

    I don’t have an airplane, but I do live near to the airport :)

  16. DM says:

    I dropped by the Fremont factory yesterday afternoon and the parking lot for deliveries was packed with hundreds of cars and dozens of people with touchless delivery taking less than 5 minutes. I don’t see this at any Toyota dealership this quarter. Toyota sales dropped in Q2 but Tesla will likely won’t.

    • Wolf Richter says:

      “Contactless” car buying, or “reduced contact” car buying is now all the rage in the auto industry, even at used-car dealers. Note that you cannot take a test drive without touching the car, however.

  17. Andrei says:

    “EM for president?”

    if you mean US president, this won’t work, as he was born in Pretoria :)

    • Clete says:

      Yeah, that only works if you’re born in Kenya.

      I kid, I kid.

    • Nat says:

      I believe that is the joke. Nothing about Tesla makes any sense; if its meteoric rise in stock price can be completely unhindered by its fundamentals, then why not its ceo’s meteoric rise completely unhindered by laws? Both equally preposterous but the former is actually happening

  18. Chris says:

    Thanks for your great articles. I agree it’s overvalued…but people are looking at it as more than an automaker. And no, there aren’t any competitors…still…after 7 years. Neither BMW, Mercedes or Porsche can match their range. Tesla is still years ahead in battery technology, but their quality control is terrible. Morningstar describes it as an energy company. It has losts of potential in autonomous driving due to a reportedly bleeding edge AI chip that no one else can match. They have their hands in several emerging disruptive fields. They will get into insurance at some point too. That’s where the crazy valuation comes from. TBH I wasn’t a fan of Musk until I saw them make a quarterly profit. Now I’m a believer. But it’s still overvalued…even Musk tweeted so LOL. I’m hoping it gets down to 800 and I’ll buy.

    • Wolf Richter says:

      Tesla’s battery cells are made by Panasonic and CATL (Chinese battery-cell maker). Tesla does NOT have the battery cell technology. Tesla buys it. Everyone can buy it. Tesla, however, makes the battery control system.

      • Cas127 says:

        Off immediate point, but…

        Anyplace free online to get volume weighted average prices for Tesla, etc?

        Not getting too spun up if the idiotic valuations are being driven by fractional share newbies going slowly C19 stir crazy insane…

        A major weakness of using marginal (un volume weighted) share price to theorize about multi billion market caps.

        When there is downward sales pressure, every Robinhood naif in existence won’t offset one medium sized institutional investor.

      • roddy6667 says:

        Isn’t Tesla’s battery control system the part that turns the cars into rolling Viking funerals?

        • intosh says:

          LOL Yes. That’s their secret sauce and sometimes that sauce can burn.

          That software is Tesla’s biggest advantage over the other automakers, who have traditionally been terrible at writing software.

      • Lisa_Hooker says:

        I will consider buying a Tesla when Elon announces a new model powered by promises instead of electricity.

    • Max Power says:

      It hasn’t been cost effective to load up batteries in cars due to it making the cars crazy expensive. Unlike other car makers, Tesla doesn’t care about losing money on its products. With battery prices heading towards parity with ICE vehicles you can bet the other car makers will release models with ranges competitive to Tesla’s.

      • c1ue says:

        “Battery prices heading towards parity with ICE vehicles” – this sounds like utter nonsense.
        Even if the “price” for a battery bank approached that of an ICE engine – the weight, lifetime and recharge times are still huge issues.
        One reason Teslas are so expensive is because they use extremely light materials in all other parts of their vehicles to offset the gigantic weight of the battery pack.
        And then there’s the rare earth requirements for said batteries.

        • Max Power says:

          So what if the batteries are heavy? They provide for a car with excellent performance and much better fuel efficiency than an ICE vehicle. That’s all that matters.

        • c1ue says:

          You are ignoring physics.
          Weight matters because it directly impacts fuel efficiency.
          The Teslas actually don’t have very good performance – if they used the same steel infrastructure and regular cars. They would be literally 30% to 50% heavier.
          And while an electric engine can accelerate very fast – the price is efficiency. Any electric vehicle on max throttle will lose 90% of its range, or more. A Tesla on max accel will have extremely low range – you’re not going to see a Tesla in NASCAR races, ever.
          An ICE engine also loses range but it is a lot less.

  19. Seneca's cliff says:

    I think this is only partially about delusional money making. It is also about keeping the dream of a techno-utopian future alive. If you believe that Tesla will soon sweep the transportation world with self driving cars making big profits along the way then you can still believe in jet packs, tourism to mars and robot butlers. This keeps you from thinking about reality where we can’t make simple surgical masks and our summer vacation options are fewer than a 1930’s dustbowl farmer.

    • Cas127 says:

      Announcement already lined up for next Tesla revenue/earnings miss…two words…

      …sex robots…

  20. Imraan Ayob says:

    Sir, I am an ardent reader of your articles, however, I am close to breaking point…

    Does the USA reward companies for poor performances. Tesla and Netflix

    2 companies, Microsoft and Apple accounts for 40% of the market cap of the Dow Jones

    Tesla, has become larger than TOYOTA, in market cap (please don’t get me wrong, but Toyota has multiple product ranges, where people can purchase vehicles from entry level all the way up to super luxury). How many product ranges does Tesla offer, and how many people can really afford them?

    I give up on trying to understand this crazy market, where it rewards poor performance.

    Please give me a sense of understanding.

    • Phoenix_Ikki says:

      Welcome to the club…the only understanding you need is Murica is #1 in a lot of the wrong things, like CV19 case/death trending and also probably #1 in detachment from reality in the financial market. We’re a hype based country so as long as you understand that then it will be slightly easier to follow. Trust me, this is something I am still struggling to wrap my head around, there’s just certain level of lunacy you have to accept as part of our culture and thinking.

      • Imraan Ayob says:

        OUCH, that’s a hard landing. I was brought up watching all the movies out of Hollywood. My first SOLO trip overseas, was to the USA. As a matter of fact, we were actually thinking of applying for the EB5 Visa to migrate there. Now i am shacking in my pants.

        Whilst studying, the Economics Professor, summarized it beautifully (many years ago); he said…..IF THE USA GETS A FLU….THE REST OF THE WORLD WILL GET PNEUMONIA

        • c1ue says:

          So what happens if the US gets coronavirus?
          And the rest of the world doesn’t get the Black Plague?
          The US is a great country with great people, but a lot of its image is bullshit.

        • Paulo says:

          The USA gets the flu, and the rest of the World continues on is a more apt assessment, at least for today.

          The article was fascinating.

          People forget autos are supposed to be transportation, A to B. Do the math of purchase price, fuel vrs electricity costs, repairs including dings and fender benders, light and windshield replacement/repairs, and a Tesla will never be looked at by any sane buyer. Tesla headlight and bulb cost = $1600 and 3-5 hours labour, or just buy the bulbs for 200 dollars per and pay someone else 3 hours labour. My Toyota light replacement was $11 from Walmart. It took me ten minutes and a phillips screwdriver. Insurance costs non existent to operate.

          I bought the Corolla used for $700, drove it 5 years, changed one starter the size of a pop can and changed one headlight from a thrown rock. Usual oil and filter changes, tuneups, etc. I then sold it for $700, the price I paid for it. The guy would have paid 1K, but I only took $700 as he was broke. Not only did I drive the Toy for 5 years I also took it north into the Yukon for a fishing trip with my son.

          Modern vehicle technology is a scam for people who are looking for something beyond transportation. Tesla stock is a scam looking for investors with more money than sense.

          Current family rides: 11 year old Yaris, 20 year old GMC PU mint condition (paid 4 k for it), and a 40 year old VW Westfalia worth more every year it lives.

          As C1ue said below, Image is bullshit.

      • Just Some Random Guy says:

        40% of all Corona deaths are within a small radius of NYC. This has nothing to do with ‘murica.

        • Wolf Richter says:

          Just Some Random Guy,

          That’s where the biggest outbreak in the US started months ago before anyone was paying attention. By the time they figured it out why so many people were dying, they had a massive problem on their hands. Now, if you’re paying attention, the outbreaks are spreading around the country — soon coming to a neighborhood near you.

        • Just Some Random Guy says:

          Not really. It started in Seattle. NYC and NY/NJ just completely messed up the response. Yet Cuomo is a darling of the media. Go figure…..

        • intosh says:

          “NY/NJ just completely messed up the response”

          Can re-opening too soon also be considered a “messed up response”? Because the surge in cases that is happening now is in states that opened too soon.

        • c1ue says:

          Wolf,
          I must respectfully point out that the mortality rates, everywhere, for COVID-19 are falling.
          I’m not saying the disease is something to be ignored, but it does seem clear that the initial people dying were those most vulnerable: i.e. already very sick.
          The point I would ask that you consider is: what is the actual formula for balancing economic injury vs. human lives?
          And please don’t say that there isn’t one – because the entire insurance industry is obviously based on precisely that.

    • David says:

      All I can say is that this really reminds me of the year 2000 for the NASDAQ. In March of 2000, it got to around 7100, then it dropped hard to around 5000, then it rebounded quickly to around 6200 – and then – BOOM, all the over valuations sank in, and I think by September of 2002 it was under 1700. Personally, I think we are in the rebound mode. I see the same kind of talk around this market as then. You never know for sure of course, but like Wolf’s article yesterday about the housing market, it is amazing how much BS can stick to the wall for a while.

    • andy says:

      Fairly easy to understand as it happens again and again. Bubbles and madness of crowds. Tesla is only a tiny slice.

    • Wolf Richter says:

      This market is beyond “understanding.”

    • Jim Kramer says:

      You need to be patient. Pay no attention to FOMO. Things will be a lot cheaper in 1-2 years. Or will just implode and everyone gets wiped out. Interesting times.

    • sierra7 says:

      ImraanAyob:
      Bingo!
      You’ve got it completely figured out already!
      Good Luck!

  21. Jdog says:

    I am seeing 2 big issues with Tesla, one is their craftsmanship has gone to hell, and the other is it is only a matter of time before they are facing enough legal problems to choke a horse over their autopilot malfunctions.
    Owning a Tesla no longer means you are cool or smart, just that you have an overpriced car with a lot of problems…..

    • Robert says:

      It would be interesting to know ( I’m basically lazy here), how many shares of each car manufacturer it takes to buy a typical car.

      TSLA is nutso because it has relatively few shares (183 million is nothing). Given such a small float I could easily see it going to several thousand dollars a share.

    • Paulo says:

      JDog,

      For shits and giggles go to some Tesla maintenance owner forums and read the comments. Almost every one seems to start out: Hopefully, this will be covered by the extended warranty because……

    • Max Power says:

      You forgot the biggest issue for Tesla: Cars based on clean-sheet BEV platforms from other car makers coming into the market in the next few years (as opposed to electric vehicles that were “afterthoughts” to existing ICE platforms).

  22. Bobber says:

    Didn’t Toyota just announce six new EV models for 2021 worldwide market, as well as a commitment to complete conversion from ICE to EV (or hybrid) by 2025?

    It seems Toyota may be dominating EV market share very soon. The Toyota brand is untouchable. Tesla’s brand is suffering from some quality and financial issues.

    • Al says:

      Toyota is not going electric. Their “electric” models are just hybrids. Hybrids improve the efficiency of combustion engines. Toyota is in denial about where the automotive world is heading for lack of imagination. Ironically, Audi may have been saved by their Dieselgate scandal because it purged their exec staff of old gear head dinosaurs and oriented the company towards electrification in a big way.

      Solid state batteries will soon be available that will eliminate combustion era vehicles from roadways very quickly. Perhaps Toyota will finally see the writing on the wall then.

      • RickV says:

        “Their electric models are just hybrids.” Can’t agree there. I have a 2014 ES300h and it has been a great car. The drive movement from gas to electric is almost not noticeable. 35 MPG and a lot of electronic accessories: Blind Sid Monitoring, Parking Assist, heated cooled seats, etc. It’s a transition car to an electric future. Very reliable with no problems. In my opinion no manufacturer builds better cars.

      • Jos Oskam says:

        “…Solid state batteries will soon be available that will eliminate combustion era vehicles from roadways very quickly…”

        Yeah right. I’ve heard that song since the first EV appeared on the road. And these guys at Toyota are all stupid, that’s why they are the world’s number 1 automaker.

        There is no battery technology in sight with an energy density that even remotely approaches that of a tank of gas. So for the foreseeable future you’re stuck with a deadweight of batteries in your EV in exchange for limited range and lining up at the charging station before you can continue your journey. Good luck with that.

        It pays to remain realistic. EV’s have a long way to go before posing a real threat to ICE’s. As Tesla shareholders are going to learn… the hard way.

      • nick kelly says:

        A break through in battery tech is an ongoing news item for the last 30 years. A classic vaporware. Last big change: Panasonic’s lithium ion 1990. Tesla’s battery today.

        The fact that EM has said anyone can use his patents should say something to those who think Tesla has any tech moats.

      • Olivier says:

        They’re not in denial. They’re betting on hydrogen.

    • Prof. Emeritus says:

      Based on the Japanese mentality towards EV those are probably just compliance-cars for China and Europe.
      Honda’s chiefs hate EVs, but they had to come up with one in order to lower CO2-fleet average in certain markets.
      So does Mazda.
      Subaru is proud of their trademark boxer engines, but now they are hybridizing their whole model range in order to retain that distinctive feature.
      Even the fabricated claims and firing of Nissan’s Carlos Ghosn is said to be partly related to the fact that he was too much of an EV-evangelist (there would be no Nissan Leaf without Ghosn) and imagined the brand as an electric car pioneer, which didn’t really appealed to the Japs.
      So I have my doubts about Toyota becoming an EV market leader.

      • Stephen C. says:

        A Japanese American lady once told me, in an incredibly polite way that made gave her message quite an impact, that the word Jap was offensive to her. That was tough for me, having grown up watching WWII flicks.

        • Prof. Emeritus says:

          I believe it is somewhat rude, but in this context it is not meant to be offensive. Kinda like the word ‘Muricans.

    • Realist says:

      Aren’t the Japanese investing heavily in a hydrogen based economy, rolling out fuel cell based cars ? Sounds a lot smarter than battery based EVs, especially when considering the raw materials needed for batteries.

  23. Tminus1blkSwan says:

    Is it just the US who have these corporate unicorn valuations that one might say are detached from our current reality? Or can they be found elsewhere globally. If so, what would be an example of one, sans Shopify.

  24. Bobber says:

    OK, I shorted a small amount of Tesla just for fun. I kept it small so I can keep the position for a long time, and double down a few more times without feeling any pain. You can’t get greedy on such things, as it takes away your flexibility.

  25. LifeSupportSystem4aVote says:

    How about this for a WTF moment?

    Got copper? It closed yesterday near $6000 per ounce – https://finance.yahoo.com/news/copper-prices-close-6-000-132201595.html?.tsrc=fin-srch

    Ounce, ton, what’s the difference?

    Stand by for a double-shot of WTF tomorrow brought to you by the US Ministry of Truth (BLS) when they show Yahoo/Zacks how the professionals do it.

  26. Jake Hings says:

    The higher the scam, the harder the fall.

  27. Jim says:

    Wolf I will short the market when you throw in the towel and buy TSLA and ZM.

  28. Just Some Random Guy says:

    At $2000 people were saying the exact same thing about Amazon. It doesn’t make money. It doesn’t produce anything. It’s no different than the Sears catalog. Blah blah blah. Now it’s at $2900.

    When Tesla hits $1500 everyone saying WTF today will have wished they bought at WTF pricing.

    • Cas127 says:

      Any more happy talk trolling and we’re going to be sure you work for the G, narc.

  29. Augusto says:

    Tesla makes a single, unstable product that has substitutes. The company does not make a significant profit, and the profit it does make is highly suspect from a financial reporting point of view. Its not clear this company or its product has a long term future. Yet people still “want” it, so the stock goes up. I wouldn’t touch it with a 10 foot pole.

  30. timbers says:

    1). Jeronimo said he doesn’t care about bubbles.
    2). Ergo Jeronimo doesn’t care how high Tesla stock is or any other stock.
    3). Jeronimo implied his emergency measures – measures to be used only when things are so incredibly bad that it becomes and emergency – will continue for ever and ever and ever – years.
    4). Ergo the emergency will go foreever and ever and ever – years.

    Also too, Jeronimo says what the Fed is doing is supposed to make us feel better (as in “there is no emergency”) and confident.

    That’s why we he is going to act like it’s an emergency forever and ever and ever.

    To make us feel better that there is no emergency.

  31. Randy Oldman says:

    Musk will use Space-X to take him to his home planet. Will Tesla survive that?

  32. xear says:

    Why? Because Amazon lost money hand over fist year after year and was an obvious short with insane valuations. Rational people laughed at the ridiculousness of Amazon’s stock price.

    Because of Amazon, we have Tesla.

    • Cas127 says:

      Because of Amazon…we have Amazon’s PE ratio of 137 in a world with a long term SP 500 ratio of 15.

      Where Amazon already holds a Walmart like market share…but can’t lift its small margins much despite that.

      Retail investors’ ignorance of Amazon’s numbers is cargo cult like…

  33. If the EV, and Musk’s version of the EV are socially advantageous, then the matter of debt and profitability is non sequitur. Tesla is politically nimble, they can acquire debt easily enough in the current capital formation process, and if the politics change, then MMT will subsidize them for being politically correct. Tesla is adding shares while other large companies are shrinking their float. A market selloff would more seriously impact companies with smaller floats and higher share prices. They are less liquid, and subject to bigger draw downs. One comment you hear a lot about the SPY is that it trades like a penny stock. And so it will. EV in terms of physics is a lot of BS. The most successful technologies are consumer based, or Neoliberal gadgets- (the problem in dotcom was they tried to make it real – B2B). Maybe Musk squares the circle.

  34. worldblee says:

    Does each Tesla share also come with a bond for the Brooklyn Bridge?

  35. Gian says:

    My brother bought this stock when it dipped below $400 and is laughing all the way to the bank (he owns a Tesla and loves it). Me, well, I was jaded by Wolf’s many warnings on why this stock has been and is poised to tank and am left scratching my head.

  36. Fat Chewer. says:

    I had the pleasure of driving a hybrid Camry for a month while I was between cars. I wish I still had it. Sorry Elom, I will be buying a Toyota hybrid.

  37. R2D2 says:

    I wrote on here, in one of the previous WTF articles, that Tesla will be the world’s first $1 trillion carmaker.

    Tesla will grab a huge 25% share of $120 billion global electric car, van and truck revenues in 2020.

    That will soar to at least 20% of a $500 billion global market by 2030.

    Not to mention all the home-battery growth and space-travel halo.

    Based on a valuation of 10 x revenue (like Facebook), a $1 trillion marcap is easily doable for Tesla before the decade is out.

  38. Sir.PiratePapirus says:

    Technically speaking that chart looks like a double WTF top :) with a bit more volatility it could develop into a WTF poor shrugging man head and shoulder.

  39. ALWAYS TANKIE says:

    Long live the Yugo

  40. The last time Tesla went through the roof, it was followed by PLUG and SPCE and then by the biggest crash since nearly forever….watch for it now – this crazy valuation will latch onto a few outlier stocks and then kerploom

  41. Brian White says:

    This rally is all Traders speculating on what tomorrow’s Traders will do based on the thought that it might get included in the S&P500. Wolf indicated that is likely… I’m going to have to do some research on the requirements for entry.

    I have “puts” against Tesla but I don’t dare go short. Reality (and gravity) will eventually have their day but it’s important to remember:

    The market can stay irrational longer than you can stay solvent!

  42. breamrod says:

    the institutions won’t touch the stock at 1100 so Musk must force a sell off when it comes time to raise more money.I think Tesla starts to fail when the other auto makers start to bring more Evs to market and consumers have more choices. Tesla is basically a fraud waiting to be uncovered but Elon is connected so that may take awhile. Mr. market place will be the final judge, jury and executioner!

  43. George W says:

    Tesla stock is almost as amusing as Amazon’s leadership.

    Amazon moved us to a brand new warehouse.
    There are exactly 1 men’s restroom stall, 1 urinal and 1 sink
    The covid 19 inspired urinal does not even auto flush?

    If the new warehouse is Osha compliant there is no need for Osha.
    I am hoping that it is a sick joke but I did not see any indication
    that additional accommodations were being built. The previous warehouse had 5 stalls.

    • George W says:

      I was only at the warehouse for a few minutes for training purposes and I will update my post if I missed the obvious, which I often do. My posts can be bizarre as I often drink too much but what I saw seemed ludicrous.

    • Phoenix_Ikki says:

      Well, you have to look at it from Amazon’s perspective. Out of the goodness of their heart and aside from taking a break making propaganda videos and disguise it as news story to local news station, they figure having a bathroom even with 1 stall is kind enough. For ultimate efficiency, why not just pee in the bottle instead? You can social distance in the dark corner while relieving yourself. Bathroom just becomes a distraction and a potential virus spread. Perhaps the one stall is to discourage people from using it and go bottle instead.

      • George W says:

        From what I understand this warehouse/distribution center was built by design to Amazon’s specification.

        The goal is that I am not going to be in the building long enough to use the restroom.

        Luck of the draw/route, some routes take you by convenience stores and or Porta potties, some do not.

        Free delivery, Free everything.

        The Free Markets do not require Amazon to make a profit so all they have to do is focus on is keeping their loses as small as possible.

        Neo Capitalism or Not Capitalism? 26 Trillion in debt soon to be 27 Trillion, blah

        • George W says:

          Artificial Intelligence!

          For the love of AI, Wolf should do an article on AI.

          Artificial Intelligence? Amazon is full of it!

  44. S.C. HEEL says:

    Anyone know what the redemption fees, if any, in a BB&T 401k plan. I have a money market option and want to get out of stocks all together for a while. Should have done it in early March like I wanted to but was too greedy AND STUPID. Saw the writing on the wall. Just knew market was going to tank. Seriously knew it. But we had just changed 401k providers and did not know the implications of moving to all cash (Money Market).

    Anyone have any advice.
    Definitely don’t want to day trade in my 401k but again I see market wellllll……overvalued.

    • Andrei says:

      Why redeem? Don’t they provide the money market vehicles?

      • S.C.HEEL says:

        I may have used wrong term. Probably not redemption fees but charges for rebalancing/reallocating in 401k. Also a set maximum # of fund transfers which lock you in for a while. I am scared as hell of this market and just want out for a while. I can’t believe it will go any higher and believe there is a very high probability of going MUCH lower.

    • Cookdoggie says:

      Most 401k plans have a Stable Value Fund investment option, which should be a safe place to park in cash for awhile.

  45. MCH says:

    One comment that stood out to me in your article: “This simple fact just underlines how relentlessly insane this market has become.”

    no, the market isn’t insane, it’s the rest of you people who haven’t gotten with the program.

    Insanity would be if Tesla was worth more than the GDP of the United States. But even then, that’s just a minor form of insanity.

  46. MonkeyBusiness says:

    Not sure which one is crazier? Tesla or Shopify?

    • Phoenix_Ikki says:

      Neither…Nikola got them all beat and probably even worse than WeWork and that’s saying a lot

  47. roddy6667 says:

    I don’t begrudge Tesla shareholders. Let them gloat. These people should not have extra cash–they might harm themselves or others.

  48. Kasadour says:

    . . . a tiny automaker with a global market share of 0.5%. . .

    Wow. Tesla is making strides in global market share. It’s way up from 0.26% five years ago. I’m impressed!

  49. Jan de Jong says:

    Swearing in church: the EV is still a solution in search of a problem.

  50. Yancey Ward says:

    Tesla is the perfect example of old phrase “The market can stay irrational longer than you can stay solvent”.

    I briefly- one night while doing a combination of heroin, meth, quaaludes, and pure grain alcohol- considered selling naked 100 Oct 16 20 1500 strike calls when Tesla first piereced $1000/share a couple of weeks ago. Fortunately, I suffered a stroke, heart attack, and liver failure all at the same time and was saved from my foolish idea.

  51. Duane says:

    A headline from today’s uber positive stock cheerleading website Barrons,

    “Tesla’s Deliveries Were Incredible. The Stock Is Flying”.

    Wedbush analyst Dan Ives raised his bull cash target price to $2,000 a share, “Musk & Co. hit a home run.”

  52. Bobber says:

    Tesla’s annual revenue growth for 2019 was only 14.5%. That’s very low a company that loses cash flow and draws stock price premium solely from revenue growth.

  53. Breta says:

    Yes, we know markets are supremely stupid.
    But so are ICE car makers.

  54. Anmol Mishra says:

    I bought puts on Tesla today. Reasons for the puts.
    a. Tesla is a leveraged liquidity play.
    b. Premiums on TSLA options are half that of VIX or junk cruises and airlines.
    c. As Wolf mentioned earlier, Fed has started removing liquidity.
    d. Stocks were goosed up due to July 4 weekend.
    e. Even if markets dont crash, there is no hope of Tesla competing with Toyota and others.
    f. Tesla market cap exceeded Toyota – this is IMO the ultimate contrarian indicator.

    I believe that this is it. The downturn begins Monday.

  55. Rik Hughes says:

    I have been watching with incredulity the loss making companies in America go from strength to strength. It beggars belief.
    This is so obviously a money laundering operation and I am surprised that it is allowed to continue.
    There again, the Federal Reserve Bank of America, is obviously working a Ponzi scheme so I suppose it’s not so strange after all.
    If there is a God…… I’m sure he’s smiling.

    • Lisa_Hooker says:

      The money printing has to go somewhere and it is purposefully directed into stocks. It cannot go into inflation of food and shelter, or, as Henry Ford said, “there would be a revolution before tomorrow morning.”

  56. Patrick says:

    No shortgage of suckers out there.
    One born every minute.

  57. David Jones says:

    So. Just to be clear that Tesla valuation now sits at 10 times the valuation of Ford Motor Co.

    Insane!

  58. c1ue says:

    I was recently reminded of Keely’s scheme – this quote is golden:
    https://investoramnesia.com/2020/06/28/fraud-short-sellers-media/
    “One of Keely’s many tactics for diverting scrutiny from his ‘Perpetual Motion’ machine was to ‘wow’ investors with new inventions, and even more ambitious goals.”
    Sound familiar?

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