Technology
Tesla’s Valuation Surpasses Ford and GM Combined
Chart: Tesla is Worth More than Ford and GM Combined
Tesla has been on a roller coaster ride of market sentiment in recent years, but the electric car company is starting off the new decade on a high note.
The company is not only America’s most valuable automaker, it’s now worth more than Ford and GM combined.
Tesla’s valuation has already surpassed the $100 billion mark – a significant milestone for a company that produces a fraction of the vehicles of its direct competitors.
Here’s a comparison of the top selling models in the U.S. for Ford, GM, and Tesla.
Rank | Model | Unit Sales (Q4 2019) |
---|---|---|
1 | Ford F-Series | 233,952 |
2 | Chevrolet Silverado | 163,311 |
3 | Chevrolet Equinox | 92,092 |
4 | GMC Sierra | 68,722 |
5 | Ford Explorer | 51,284 |
6 | Ford Escape | 47,587 |
7 | Tesla Model 3 | 47,275 |
8 | Ford Edge | 37,621 |
9 | Ford Transit | 36,885 |
10 | Chevrolet Malibu | 34,314 |
A quick glance at this list is revealing. Though Tesla’s Model 3 put up strong sales numbers, it’s still only a small percentage of vehicles sold by U.S. automakers.
So, what’s driving Tesla’s meteoric growth, and is it sustainable? Below, we’ll take a high-level look at the bull and bear cases for the company.
The Bull Case for Tesla Motors
Tesla posted losses of $1.1 billion in the first half of 2019, but since then, the company has turned the situation around in dramatic fashion.
The automaker had a surprising third quarter with not only record deliveries of 97,000 cars, but also a profit of $143 million. Deliveries broke yet another record in Q4 2019, totaling 112,000 vehicles. These announcements helped improve market sentiment, sending the company’s stock back on an upward trajectory heading into 2020.
Here are three reasons some analysts and media are still bullish on Tesla:
1. Tapping into the World’s Largest Electric Car Market
For a long time, foreign companies looking to manufacture products in China couldn’t do so without working through a domestic partner. Recently though, Tesla became the first major benefactor of a policy change, becoming the first wholly foreign-owned automaker in China.
Gigafactory 3 in Shanghai was completed in October, and was built in just 10 months – an impressive feat. Furthermore, cars have already begun rolling off the assembly lines, as Tesla targets an annual production of 150,000 Model 3s.
Perhaps the best part for a company with historically volatile earnings: Tesla claims the facility was 65% cheaper to build than its production plant in the U.S.
2. Still the Range King
2019 saw many of the more established automakers take their first swings at Tesla.
The United States Environmental Protection Agency (EPA) handed out official range ratings for several new electric cars, but none could unseat the king:
3. Musk’s Megaphone
Few CEOs capture the attention of media quite like Elon Musk. While his actions can sometimes have unintended consequences for the company – the infamous “funding secured” tweet, for example – Elon Musk’s massive reach allows the company to sell vehicles without spending a dime on advertising.
By contrast, in 2018, Ford and GM spent $2.3 billion and $3.1 billion respectively on advertising in the U.S. alone.
The Bear Case for Tesla Motors
While the second half of 2019 has given Tesla bulls much to celebrate, many investors are remaining vigilant, if not skeptical.
1. Stiff Competition in China
Tapping into the world’s largest EV market is a double-edged sword for Tesla, as they face an onslaught of domestic and foreign competitors.
The Chinese government has also generously supported its own EV industry, handing out over $60 billion in subsidies to over 400 companies. Tesla will be competing against state-owned enterprises like BAIC, one of the largest players in the Chinese EV market.
Western automakers are also gaining a foothold in China as well. Volkswagen and its Chinese joint-venture partner, SAIC Motor, will begin producing cars at two factories in China in the autumn of 2020.
The German automotive giant has also forged partnerships with Chinese battery manufacturers, including China’s biggest battery company Contemporary Amperex Technology (CATL).
2. Getting Ratio’d
Tesla has an extremely high premium on earnings when compared with its more established counterparts in the auto industry.
Company | Ticker | Enterprise Multiple* (last 12 months) |
---|---|---|
Toyota | NYSE: TM | 8.4x |
GM | NYSE: GM | 10.0x |
Ford | NYSE: F | 14.5x |
Tesla | NASDAQ: TSLA | 50.2x |
The enterprise multiple (EV/EBITDA) measures the dollars in enterprise value for each dollar of earnings. The ratio is commonly used to determine if a company is undervalued or overvalued compared to peers.
The Bottom Line is… the Bottom Line
Of course, Tesla’s future will be dictated by variables more complex than can be summed up in a tidy pro/con list.
Musk has shown a willingness to sacrifice profitability in the name of growth – Tesla has yet to prove it can deliver consistent, quarterly profits.
It’s hard to be profitable with that level of growth. We could slow it down, but then that would not be good for sustainability and the cause of electric vehicles.
– Elon Musk
After reporting a record number of deliveries in the final quarter of 2019, there’s no doubt that true believers and short sellers alike will be watching the company’s January 29, 2020, earnings call with much anticipation.
Technology
Countries With the Highest Rates of Crypto Ownership
While the U.S. is a major market for cryptocurrencies, two countries surpass it in terms of their rates of crypto ownership.
Countries With the Highest Rates of Crypto Ownership
This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.
This graphic ranks the top 10 countries by their rate of cryptocurrency ownership, which is the percentage of the population that owns crypto. These figures come from crypto payment gateway, Triple-A, and are as of 2023.
Data and Highlights
The table below lists the rates of crypto ownership in the top 10 countries, as well as the number of people this amounts to.
Country | % of Population Who Own Crypto | # of Crypto Owners |
---|---|---|
🇦🇪 United Arab Emirates | 30.4 | 3M |
🇻🇳 Vietnam | 21.2 | 21M |
🇺🇸 U.S. | 15.6 | 53M |
🇮🇷 Iran | 13.5 | 12M |
🇵🇠Philippines | 13.4 | 16M |
🇧🇷 Brazil | 12 | 26M |
🇸🇦 Saudi Arabia | 11.4 | 4M |
🇸🇬 Singapore | 11.1 | 665K |
🇺🇦 Ukraine | 10.6 | 4M |
🇻🇪 Venezuela | 10.3 | 3M |
Note that if we were to rank countries based on their actual number of crypto owners, India would rank first at 93 million people, China would rank second at 59 million people, and the U.S. would rank third at 52 million people.
The UAE Takes the Top Spot
The United Arab Emirates (UAE) boasts the highest rates of crypto ownership globally. The country’s government is considered to be very crypto friendly, as described in Henley & Partners’ Crypto Wealth Report 2023:
In the UAE, the Financial Services Regulatory Authority (FSRA-ADGM) was the first to provide rules and regulations regarding cryptocurrency purchasing and selling. The Emirates are generally very open to new technologies and have proposed zero taxes for crypto owners and businesses.
Vietnam leads Southeast Asia
According to the Crypto Council for Innovation, cryptocurrency holdings in Vietnam are also untaxed, making them an attractive asset.
Another reason for Vietnam’s high rates of ownership could be its large unbanked population (people without access to financial services). Cryptocurrencies may provide an alternative means of accessing these services without relying on traditional banks.
Learn More About Crypto From Visual Capitalist
If you enjoyed this post, be sure to check out The World’s Largest Corporate Holders of Bitcoin, which ranks the top 12 publicly traded companies by their Bitcoin holdings.
-
Markets5 days ago
Visualizing Global Inflation Forecasts (2024-2026)
-
Green2 weeks ago
The Carbon Footprint of Major Travel Methods
-
United States2 weeks ago
Visualizing the Most Common Pets in the U.S.
-
Culture2 weeks ago
The World’s Top Media Franchises by All-Time Revenue
-
voronoi1 week ago
Best Visualizations of April on the Voronoi App
-
Wealth1 week ago
Charted: Which Country Has the Most Billionaires in 2024?
-
Business1 week ago
The Top Private Equity Firms by Country
-
Markets1 week ago
The Best U.S. Companies to Work for According to LinkedIn