Shares of Tesla (TSLA) are up from about $ 80 / share in late 2019 to nearly $ 700 / share.
Backed by its inclusion in the S&P Index, the company’s market cap now exceeds $ 650 billion – possibly the largest major bubble in history.
Well-known competition include the Audi Q4 e-tron and Q4 e-tron Sportback, BMW iX3 (in Europe and China), Mercedes EQB, Volvo XC40, Volkswagen ID.4 and Nissan Ariya, although cheaper and available now are the excellent all-electric Hyundai Kona and Kia Niro, extremely well-rated small crossovers with EPA range of 258 miles for the Hyundai and 238 miles for the Kia, at prices under $ 30,000 including the $ 7,500 tax credit. Model 3 now has great direct “sedan competition” from Volvo’s beautiful new Polestar 2 and the premium version of Volkswagen’s ID.3, and next year from the BMW i4. “
– Mark Spiegel
As noted above, faced with an onslaught of competition – from Audi, Volkswagen (VLKAF) and others – and a relatively shallow ditch, Tesla’s market capitalization is now more than 5x that of Ford (F), General Motors (GM) and Fiat Chrysler. (FCAU), which as a group sells 17 million units / year versus Tesla’s estimated production of 500,000 cars in 2020.
Tesla’s has few ownership rights in electric vehicle technology – while its global competitors have more than a century of experience in consistently manufacturing and distributing high-quality cars, subsidizing the continued operational losses of their electric vehicle efforts.
Tesla has been in existence for 17 years and, after adjusting for the sale of emission credits, has never been profitable, despite no competition and no advertising.
Despite limited global competition, Tesla has fueled growth by lowering unit prices. What happens when the well-judged competition gets ready for delivery in 2021? Market share will come under pressure and operating margins will decline.
Meanwhile, unrest in management has intensified over the past two years.
Bottom Line
In an age of cultism, Tesla is the supply (and Bitcoin is the currency)!
(Ford is a holding company in Jim Cramer’s Action Alerts PLUS club. Want to be informed before Jim Cramer F buys or sells? Read more now.)
Every time I write a real money article I get an email alert. Click on “+ Follow” next to my byline for this article.