Either the EV companies have to put the existing auto manufacturers out of business ...

[john norris]

... or there is going to be a hell of an adjustment to their stock prices. They are going to have to steal all of the market share and then some to substantiate their value.

https://finance.yahoo.com/news/its-bizarro-world-in-the-auto-industry-again-203740250.html

[Highlander]

@john-norris Welcome to who's market is this anyway, where the values are made up and reality doesn't matter.

[ranwhenparked]

@john-norris Other option, they consolidate. Ford already owns 12% of Rivian, Tesla's had some dealings with Toyota in the past. And we all know that the two surviving legacy domestic luxury brands, Lincoln and Cadillac, haven't been taken seriously as proper luxury cars since before most current luxury car buyers were even born, whereas Tesla has been enormously effective in reaching that demographic, and Rivian is showing a lot of early promise. Ford can't afford to buy Rivian, but Ford + the Ford family's outside wealth possibly could, or Rivian could acquire Ford in a reverse merger with a combined cash/stock transaction that results in Rivian displacing Lincoln as the luxury make of the combined group. Or, Tesla, needing more manufacturing capacity beyond what even its new Texan and German plants can handle, goes shopping for an automaker with an established production base, and maybe a well regarded downmarket brand to use on entry level EVs so as not to dilute the Tesla name.

Or, it could be as much fantastical nonsense as that editorial awhile back suggesting that Amazon buy Sears, which very quickly went from laughable to delusional as events changed.

[HammerheadFistpunch]

@john-norris

[NKato]

@ranwhenparked I feel like the Rivian bit is spot on. Lincoln hasn't been able to maintain its branding as a luxury name. Nowadays it just feels like they're stuck somewhere between Boomerville, and Economy.

Rivian would definitely supersede Lincoln as a lux brand.

[SilentbutnotreallyDeadly]

@john-norris
Or they could all go and get a case of reality bites circa 2008...all of them...

[іди на хуй Влад - formerly known as Distraxi]

@john-norris Once upon a time people thought Amazon would have to sell more books than existed in the world to justify their share price. That was when selling books was what they did and they were worth about 1% of what they are now. There are crazier things to do than bet on a company that’s already set an industry on its head to do some more impossible things.

Of course back when Amazon looked overvalued, so did 99 other dotcoms that have since imploded, so it’s maybe not a wise bet. Just not a crazy one.

Disclaimer: I also think Tesla and Rivian are vastly overvalued, but I thought that about Amazon, Apple, Facebook and Google too, so clearly what do I know?

[Krusty Walnut]

@john-norris Right now, EV adoption is mostly on the premium car side. A lot of these company's future value depends on how trucks and suvs sales will go. The other aspect of the EV market that will determine their success is style and range. A lot of people are put off by Tesla's styling but they are designed for range and efficiency. Most manufacturers have better styling but their efficiency and range are low compared to Tesla. I like Rivian's, Ford's, and Porsche's styling but their range isn't as good as Tesla's and you can't really get one in the near future due to demand or manufacturing constraints.

Rivian and Ford have the most potential if they can start producing units faster/sooner in the truck and commercial markets. Tesla might hit a sales plateau due to older styling and increase in their used cars as they sell more units. Tesla will probably see gains from other products such as their electricity storage business, financing, insurance etc. Lastly, stock prices are now a popularity contest and Tesla has made a very strong brand. Everyone knows who they are and many people want to own their stock just to say they do.

[john norris]

@distraxi said in Either the EV companies have to put the existing auto manufacturers out of business ...:

Of course back when Amazon looked overvalued, so did 99 other dotcoms that have since imploded, so it’s maybe not a wise bet. Just not a crazy one.

I think you have explained it as well as one can. If Tesla, or other startups for that matter, can do the Amazon Books to Amazon Everything swing, then the current stock values can be legit. But an Automotive Industry that was valued at $1.8 trillion or so, that is suddenly valued at $3 trillion with the addition of several EV manufacturers doesn't add up. Us Earthlings are only going to buy so many cars and trucks, whether they are ICE, or EV or something else. The automotive market is only going to be so many cars per year, and therefore only allow so much manufacturing value. Someone is going to win and some are going to lose. The losing, whether that's EV or ICE, certainly isn't priced in to the stocks yet.

Of course Tesla had big plans for solar and that has yet to become anything but a downer for them. They also have the power wall that may yet dominate the world, given a few more steps of battery technology. And it's hard to know what's cooking in Elon's brain that hasn't been consumed by Space X and Boring, but I'm sure it's big. So I agree there may be quite a bit of non-automotive manufacturing value in there.

I recall a comment from Bezo's maybe in the 90's after a Barnes and Noble (or Border's) comment about Amazon and competition. Bezo's said something like they aren't our competition. Which non of us small thinkers understood at the time. He was looking way ahead, as I'm sure Elon and the others are now trying to.

Here's an interesting table on Automotive Manufacturers Stock Value:
https://companiesmarketcap.com/automakers/largest-automakers-by-market-cap/

[john norris]

@silentbutnotreallydeadly said in Either the EV companies have to put the existing auto manufacturers out of business ...:

Or they could all go and get a case of reality bites circa 2008...all of them...

Certainly that is my expectation. But there is $1.3 trillion or so betting against the failure of EV startup's, and there is $1.6 trillion or so betting against the failure of existing auto manufacturing.

If we could just figure out where this is really going to go, and when, we might be able to make us a few hundred million in the process.

[facw]

@john-norris Even if they put the existing automakers out of business, it seems hard to justify those valuations. Tesla could become a Toyota or a VAG and they would still be overvalued by an order of magnitude. No problem with buying growth stocks (though I prefer value investing) but you have to consider the level of growth the market is already expecting (or just treat it like a pyramid scheme and hope to get out before the other shoe drops).

[john norris]

@facw said in Either the EV companies have to put the existing auto manufacturers out of business ...:

Even if they put the existing automakers out of business, it seems hard to justify those valuations.

I agree. Tesla pretty much needs to grab up most of the automotive market share, and then grab up most of the market share for providing residential and commercial real estate energy to justify their current value. That must be what investors are betting on.

Either that or people believe Elon has some other genius Tesla plans he is cooking up.

Or, Tesla investors are just the 2021 edition of 2000 and 2007 investor sheep.

Of course a lot of those damn sheep are far richer than I right now, at least on paper.

[іди на хуй Влад - formerly known as Distraxi]

@john-norris said in Either the EV companies have to put the existing auto manufacturers out of business ...:

Or, Tesla investors are just the 2021 edition of 2000 and 2007 investor sheep.

Has anyone else noticed that with Facebook’s change in name, the FAANG stocks have become the MAA-iNG stocks? Coincidence? I think not…

<adjusts tinfoil hat>