At the beginning of 2020, everyone's favorite EV brand used to feature a market cap of $86 billion. November is when Tesla reached $500 billion, and on the final day of this rather forgettable year, Tesla is worth just under $660 billion. Of course, this meteoric growth raises eyebrows.
First of all, is the Palo Alto-based automaker worth that much? Some say it’s nothing more than a bubble, and it’s easy to understand where they’re coming from. On the other hand, let’s not forget that Tesla’s value can also be explained through brand awareness and industry-leading EV technology.
The overly optimistic market cap has led Wall Street analysts to issue warnings, but after Tesla was added to the S&P 500 index on December 21st, share prices kept on climbing. The Californian outfit also happens to be worth more than seven of the world's best-known automakers.
In the order of their market capitalization, I’m referring to the Japanese juggernaut Toyota at $251 billion, the Volkswagen Group, Daimler AG, General Motors, Ferrari, BMW AG, and Honda. What happens to be wrong with this picture? For starters, Tesla Inc. is playing second fiddle in terms of deliveries at approximately 500,000 vehicles per year.
Production output and maximum capacity aren’t up to snuff either, and by the way, Palo Alto doesn’t have the industrial might of legacy automakers. Looking at the bigger picture, we’re not analyzing Tesla right.
The switch from “Motors” to “Inc.” should give you a clue what I’m on about. In addition to desirable passenger cars and SUVs, Tesla operates a worldwide network of revenue-generating charging stations. Solar energy and power storage also need to be mentioned, and Elon Musk has expressed interest in segments like “home HVAC with HEPA and water distillation.”
On an ending note, I think we can all agree that Tesla stock is volatile. No company is too big to fail, and when there’s pressure from blindingly faithful investors and short sellers alike, you can bet your sweet bippy that market capitalization may go south at the slightest hint of uncertainty.
The overly optimistic market cap has led Wall Street analysts to issue warnings, but after Tesla was added to the S&P 500 index on December 21st, share prices kept on climbing. The Californian outfit also happens to be worth more than seven of the world's best-known automakers.
In the order of their market capitalization, I’m referring to the Japanese juggernaut Toyota at $251 billion, the Volkswagen Group, Daimler AG, General Motors, Ferrari, BMW AG, and Honda. What happens to be wrong with this picture? For starters, Tesla Inc. is playing second fiddle in terms of deliveries at approximately 500,000 vehicles per year.
Production output and maximum capacity aren’t up to snuff either, and by the way, Palo Alto doesn’t have the industrial might of legacy automakers. Looking at the bigger picture, we’re not analyzing Tesla right.
The switch from “Motors” to “Inc.” should give you a clue what I’m on about. In addition to desirable passenger cars and SUVs, Tesla operates a worldwide network of revenue-generating charging stations. Solar energy and power storage also need to be mentioned, and Elon Musk has expressed interest in segments like “home HVAC with HEPA and water distillation.”
On an ending note, I think we can all agree that Tesla stock is volatile. No company is too big to fail, and when there’s pressure from blindingly faithful investors and short sellers alike, you can bet your sweet bippy that market capitalization may go south at the slightest hint of uncertainty.