Tesla's Stock Remains Insane

Matt Posky
by Matt Posky
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tesla s stock remains insane

Despite it only being a little over a month into 2020, Tesla’s stock has already doubled since New Year’s. Share prices surged to over $900 before Tuesday’s trading, leaving many scratching their heads as to how one of the smallest global manufacturers manages to clean up so well on Wall Street.

Seeking answers, Bloomberg looked to industry analysts and executives from rival car manufacturers to better understand Tesla’s mojo — and determine whether all the stock heat is warranted. The gist appears to be that Elon Musk and company are simply running away with battery technology, something that’s difficult to refute. However, some claims that Tesla has surpassed what constitutes an automaker feel overblown and not entirely consistent with reality.

“There’s a recognition that Tesla is in a preeminent position in terms of EV technology,” Peter Rawlinson, the chief executive officer of Lucid Motors and former Tesla employee, told the outlet at Monday’s BloombergNEF Summit in San Francisco. “They’re even further ahead than has been reported, and I think the gap is widening, not closing.”

While customers often have to pay more, the maximum range of Tesla vehicles consistently trumps whatever mainstream manufacturers can produce. Porsche’s Taycan was clearly designed as performance alternative to the Model S and is quite expensive at $103,800 (to start). Yet its maximum range barely exceeds 200 miles. Tesla’s sedan starts about $30,000 lower and will poop out closer to 370 miles.

That’s a cherry-picked example to highlight disparities. There are certainly smaller EVs with more reasonable MSRPs that can break the 250-mile barrier. But Tesla remains king in the premium market. Other brands can’t seem to touch its battery range, and it’s the only car business with a comprehensive network of EV charging stations.

“I’m not being critical of the Germans — it’s wonderful they’re creating these cars and coming in,” explained Adam Jonas, analyst at Morgan Stanley. “But it just shows much of this technological gulf remains.”

“We think they are pretty far ahead in battery and EV technology,” Jonas also said. “Tesla has moved from being seen as an auto stock to be seeing as a tech stock mentioned in the same breath as Amazon, Apple and Google.”

Tesla is absolutely an automaker; endlessly favoring anything that can be considered a tech company seems like a rather short-sighted way of trading. However, it is true that the business isn’t viewed the same way legacy automakers are. Plenty of people see Tesla as more than a car brand. They’re wrong, of course, but that matters little on the trading floor.

Waves of criticism don’t appear to have changed many opinions, either. We’ve often complained about CEO Elon Musk making unkept promises, and the whole world seems to be gradually turning on Autopilot, but it doesn’t appear to be hurting the company. In fact, Tesla’s ability to market itself has undoubtedly helped it get to where it is today. Major delays that would have embarrassed an established automaker were little more than hiccups for the American EV brand. We’re always one press conference or mysterious tweet away from Tesla being back in the headlines, usually underpinning some important change or new product. Combine that with an early lead in developing electric vehicles and you’ve won yourself a prize.

“The thesis for Tesla’s business miracle is rooted in the handful of years that the company operated with effectively no competition,” Gene Munster, managing partner of the venture capital firm Loup Ventures and long-time Apple analyst, wrote Monday in a research note. “Tesla has nearly a decade head start in EVs as other automakers under-invested in the space.”

Munster said Tesla’s valuation is as valid as investors choose it to be, predicting its market cap surpassing $140 billion over the next five years if traders continue prioritizing tech companies. He also said the latest surge was probably the result of short sellers — the bane of Elon Musk’s existence.

[Image: JL IMAGES/Shutterstock]

Matt Posky
Matt Posky

Consumer advocate tracking industry trends, regulation, and the bitter-sweet nature of modern automotive tech. Research focused and gut driven.

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  • ToolGuy ToolGuy on Feb 04, 2020

    GM and/or Ford will crush this upstart like a bug... ...just as soon as they get their plans together.

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    • JimZ JimZ on Feb 05, 2020

      @Inside Looking Out just as likely personal car ownership will become rare as Uber becomes profitable because everyone's using them.

  • Randyinrocklin Randyinrocklin on Feb 04, 2020

    I have not checked on pricing on put options for tesla stock. But I would be loading up a couple of in the money puts.

  • ToolGuy I appreciate the thoughtful comments from the little people here, and I would like to remind everyone that Ford Motor Company offers a full range of vehicles which are ideal for any driving environment including New York City. The size and weight our of product portfolio has been fully and completely optimized to be friendly to the planet and friendly to pedestrians while consuming the bare minimum of resources from our precious planet (I am of course a lifelong environmentalist). Plus, our performance models will help you move forward and upward by conquering obstacles and limits such as congestion and your fellow humans more quickly at a higher rate of speed. I invite you to learn more at our website.Signed, William Clay Ford Jr.
  • George Hughes What ever happened to the American can-do attitude. I know what, it was coopted by the fossil fuel industry in their effort to protect their racket.
  • 28-Cars-Later "But Assemblyman Phil Ting, the San Franciscan Democrat who wrote the electric school bus legislation, says this is all about the health and wellbeing of Golden State residents. In addition to the normal air pollution stemming from exhaust gasses, he believes children are being exposed to additional carcinogens by just being on a diesel bus."Phil is into real estate, he doesn't know jack sh!t about science or medicine and if media were real it would politely remind him his opinions are not qualified... if it were real. Another question if media were real is why is a very experienced real estate advisor and former tax assessor writing legislation on school busses? If you read the rest of his bio after 2014, his expertise seems to be applied but he gets into more and more things he's not qualified to speak to or legislate on - this isn't to say he isn't capable of doing more but just two years ago Communism™ kept reminding me Dr. Fauxi knew more about medicine than I did and I should die or something. So Uncle Phil just gets a pass with his unqualified opinions?Ting began his career as a real estate  financial adviser at  Arthur Andersen and  CBRE. He also previously served as the executive director of the  Asian Law Caucus, as the president of the Bay Area Assessors Association, and on the board of  Equality California. [url=https://en.wikipedia.org/wiki/Phil_Ting#cite_note-auto-1][1][/url][h3][/h3]In 2005, Ting was appointed San Francisco Assessor-Recorder in 2005 by Mayor  Gavin Newsom, becoming San Francisco’s highest-ranking  Chinese-American official at the time. He was then elected to the post in November 2005, garnering 58 percent of the vote.Ting was re-elected Assessor-Recorder in 2006 and 2010During his first term in the Assembly, Ting authored a law that helped set into motion the transformation of Piers 30-32 into what would become  Chase Center the home of the  Golden State Warriorshttps://en.wikipedia.org/wiki/Phil_Ting
  • RHD This looks like a lead balloon. You could buy a fantastic classic car for a hundred grand, or a Mercedes depreciationmobile. There isn't much reason to consider this over many other excellent vehicles that cost less. It's probably fast, but nothing else about it is in the least bit outstanding, except for the balance owed on the financing.
  • Jeff A bread van worthy of praise by Tassos.