Sunday, August 13, 2017

Tesla and the death of the internal combustion engine


Recently The Economist published an article on the future of electric cars and internal combustion engine: Click here

Although Tesla has only had two profitable quarters in its history as a public company, while GM earned a profit of more than $9 billion last year; in April 2017 Tesla's market capitalization exceeded that of Ford and General Motors and it became the largest automaker in the US. 

In June 2017 Tesla followed another surge and its market capitalization is now worth more than BMW’s, making it the 4th most valuable car company in the world. 

This is the situation as of August 9, 2017:


In terms of operating numbers Tesla is not quite there though. While Tesla's market cap has caught up with larger and more established auto makers, its production and revenues are a fraction of theirs, leading some to use metrics like enterprise value per car sold to conclude that Tesla is massively over valued. Nevertheless the investors clearly buy the story that Elon Musk is telling.