Shares of Tesla (TSLA) have gone from about $ 80 / share at the end of 2019 to nearly $ 700 / share.
Fortified by its inclusion in the S&P index, the company’s market capitalization exceeds $ 650 billion, which represents possibly the largest capitalization bubble in history.
“Outstanding competition will include the Audi Q4 e-tron and Q4 e-tron Sportback, BMW iX3 (in Europe and China), Mercedes EQB, Volvo XC40, Volkswagen ID.4 and Nissan Ariya, while they are now less expensive and Hyundai Kona and Kia Niro, all-electric, well-reviewed small crossovers with an EPA range of 258 miles for the Hyundai and 238 miles for the Kia, priced under $ 30,000 including the $ 7,500 U.S. tax credit. Meanwhile, the Model 3 now has fantastic direct “sedan competition” from Volvo’s beautiful new Polestar 2 and premium version of Volkswagen’s ID.3, and next year’s BMW i4. “
– Mark Spiegel
As noted above, in the face of a onslaught of competition (from Audi, Volkswagen (VLKAF) and others) and a relatively shallow ditch, Tesla’s market capitalization now exceeds twice that of Ford ( F), General Motors (GM) and Fiat Chrysler. (FCAU), which, as a group, sells 17 million units / year compared to Tesla’s estimated production of 500,000 vehicles in 2020.
Tesla has little ownership in terms of electric car technology, while its global competitors have more than a century of experience in the consistent manufacturing and distribution of high-quality automobiles and that they subsidize the continued operating losses resulting from their efforts in electric cars.
Tesla has been around for 17 years and, adjusted to the sale of emission credits, has never been profitable despite having no competition or need for advertising.
Despite limited global competition, Tesla has fostered growth by reducing unit prices. What happens when the well-reviewed competition is just delivered in 2021? Market share will be pressured and operating margins will decrease.
Meanwhile, the management convulsion has intensified over the past two years.
Bottom line
In an age of cultism, Tesla is the value (and Bitcoin is the currency).
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