# Why is Tesla's market cap so high? **URL:** \ **Category:** Great Debates\ **Created:** [December 13, 2024, 6:09am UTC](https://boards.straightdope.com/t/why-is-teslas-market-cap-so-high/1011594 "2024-12-13T06:09:38Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [December 14, 2024, 3:02am UTC](https://boards.straightdope.com/t/why-is-teslas-market-cap-so-high/1011594/21 "2024-12-14T03:02:02Z")
> [@Zoobi](#): > > > [@Wesley\_Clark](#): > > > > Also Musk has destroyed the consumer base for his vehicles (progressives with disposable income), which is going to hurt sales in the future. > > This is quite wrong. His customer base has pivoted solidly MAGA. Purchasing and driving a Tesla is an explicitly political statement these days. Hyundai sells more cars in the US each year than Tesla does from what I can tell. 801k vs 654k I don’t see MAGA driving environmentally friendly cars. I don’t know if you know MAGA types in your personal life, but they are very into toxic masculinity and think caring about the environment is faggy. ---
**Author:** ![Dr.Strangelove](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dr.strangelove/32/6613_2.png) [@Dr.Strangelove](https://boards.straightdope.com/u/Dr.Strangelove)\ **Post date:** [December 14, 2024, 3:08am UTC](https://boards.straightdope.com/t/why-is-teslas-market-cap-so-high/1011594/22 "2024-12-14T03:08:06Z")
> [@Wesley\_Clark](#): > > I still don’t get it. I certainly won’t claim that their market cap is directly justified by their auto sales. But they’re treated like a tech company and so a lot of the perceived value is about the future. They’re strongly positioned in a number of areas, but they have to execute well. If–and this is a big if–they can deliver on a version of self-driving that is sufficient for the robotaxi market, they will immediately have a wide-open market in the US. Waymo may be delivering rides but they don’t have the scale. They don’t own any factories and their hardware requirements are extreme. Even if one thinks the probability is not too high, a 25% chance (for example) of totally dominating the robotaxi market is a huge potential upside. > [@Wesley\_Clark](#): > > Ford sells 4.4 million cars globally a year, double what tesla sells. Yes, but their stated EV margins are -100%. Every $1 of EV revenue costs $2. Whereas Tesla is profitable on their own. Not all EV makers are as bad, but none are as comfortably profitable as Tesla. > [@Wesley\_Clark](#): > > Also globally Tesla cannot compete with chinese EV companies. Not quite true. Tesla does fine in China, being produced in their Chinese factory. The competition is much stronger there, but they do adequately. Auto markets don’t seem to trend towards monopoly in general so relatively smaller players can survive. BYD _is_ a strong player, to be sure. But if Subaru can stick around vs. Toyota in the US, Tesla can carve out a niche vs. BYD. ---
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [December 14, 2024, 3:11am UTC](https://boards.straightdope.com/t/why-is-teslas-market-cap-so-high/1011594/23 "2024-12-14T03:11:45Z")
China sold over 8 million EVs in 2023, which was apparently a 37% growth over 2022. Tesla sold 1.8 million EVs in 2023. China’s share of the EV market seems to be growing rapidly. I wouldn’t be surprised if they are selling well over 10 million EVs a year by 2026, which would be 5 times Teslas global sales. ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [December 14, 2024, 3:13am UTC](https://boards.straightdope.com/t/why-is-teslas-market-cap-so-high/1011594/24 "2024-12-14T03:13:27Z")
> [@Zoobi](#): > > > [@Wesley\_Clark](#): > > > > Also Musk has destroyed the consumer base for his vehicles (progressives with disposable income), which is going to hurt sales in the future. > > This is quite wrong. His customer base has pivoted solidly MAGA. Purchasing and driving a Tesla is an explicitly political statement these days. The New York Times ran an [article](https://www.nytimes.com/2024/12/11/style/tesla-bumper-stickers.html) a couple of days ago about the sales of pro- and anti-Musk bumper stickers for people to put on their Tesla vehicles. (For example, one reading, “I Bought This Before We Knew Elon Was Crazy” or another reading, “I bought this after I knew Elon was awesome.”) The article includes this bit about a machine shop owner in Oklahoma. > “I’ve always been against E.V.s. — the oil patch is what puts food on my family’s table,” Mr. Ziese said. “During the Republican National Convention, Trump said that Elon is going to start supporting conservatives. I told my wife, ‘If Elon is going to start supporting conservatives and free speech, I’m going to start supporting Elon, even though I hate E.V.s.’” > > So he bought a Cybertruck and added the “awesome” sticker. It has become his favorite car. ---
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [December 14, 2024, 3:17am UTC](https://boards.straightdope.com/t/why-is-teslas-market-cap-so-high/1011594/25 "2024-12-14T03:17:11Z")
But again, the cybertruck sells maybe 70k units in the US each year. The ford F-series sells 700k units in the US each year. I have no idea what % of those are the F-150, but thats the most popular model. Safe to say the F-150 sells many times more than the tesla cybertruck does in the US. ---
**Author:** ![hajario](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hajario/32/171_2.png) [@hajario](https://boards.straightdope.com/u/hajario)\ **Post date:** [December 14, 2024, 3:25am UTC](https://boards.straightdope.com/t/why-is-teslas-market-cap-so-high/1011594/26 "2024-12-14T03:25:59Z")
And a lot of the F-150s are actually used as trucks. ---
**Author:** ![Dr.Strangelove](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dr.strangelove/32/6613_2.png) [@Dr.Strangelove](https://boards.straightdope.com/u/Dr.Strangelove)\ **Post date:** [December 14, 2024, 3:34am UTC](https://boards.straightdope.com/t/why-is-teslas-market-cap-so-high/1011594/27 "2024-12-14T03:34:22Z")
> [@Wesley\_Clark](#): > > Safe to say the F-150 sells many times more than the tesla cybertruck does in the US. Yeah, but this is like saying that Kodak sold way more film cameras at the beginning of the digital camera age, or that Blockbuster rented out way more DVDs. People are looking toward the future. It’s concerning that so few traditional automakers aren’t handling the EV transition well. Historically, traditional industries don’t have a great track record here. Tesla needs to do a lot more than be a successful automaker to justify their price, but they’re doing at least reasonably well on all of their projects at the moment. ---
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [December 14, 2024, 3:53am UTC](https://boards.straightdope.com/t/why-is-teslas-market-cap-so-high/1011594/28 "2024-12-14T03:53:41Z")
I feel like I understand your argument, I just don’t think it is persuasive. Tesla is not, IMO, the future of EVs. Chinese EVs are vastly outselling Teslas all over the world. If it weren’t for tariffs, Chinese EVs would be outselling Tesla domestically I’m sure. If Trump agrees to let Chinese EVs be manufactured domestically and they agree not to send video images to China, I could see Chinese EVs being manufactured domestically in the US and undercutting Tesla. Chinese EV sales grew 37% in 2023 compared to 2022. Tesla sales also grew, but are still a fraction of Chinese sales. But people will say ‘Tesla isn’t just a car company, its a technology company’. Yes, but what technologies? - Self driving cars - bipedal robotics - renewable energy - artificial intelligence Well and good, but lots of companies are working on these things. Bipedal robotics for example. Tesla has the Optimus, but a dozen other companies in the US alone are working on bipedal robots. Its the same with self driving cars or AI. Tesla is just one in a field of competitors. ---
**Author:** ![Dr.Strangelove](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dr.strangelove/32/6613_2.png) [@Dr.Strangelove](https://boards.straightdope.com/u/Dr.Strangelove)\ **Post date:** [December 14, 2024, 4:11am UTC](https://boards.straightdope.com/t/why-is-teslas-market-cap-so-high/1011594/29 "2024-12-14T04:11:34Z")
Can’t tell you except that the _perception_ is that Tesla has a more credible claim to succeeding in these categories than most of their competition. Until very recently, Cruise was thought to be not too far behind Waymo in the self-driving area… but GM pulled the plug just recently: [https://www.reuters.com/business/autos-transportation/gms-cruise-exit-turns-focus-challenges-scaling-robotaxis-2024-12-11/](https://www.reuters.com/business/autos-transportation/gms-cruise-exit-turns-focus-challenges-scaling-robotaxis-2024-12-11/) Very few other companies even have that level of credibility. Tesla on the other hand is quite visibly still pumping billions into their program _and_ making significant progress. There have been a zillion EV startups over the years and Tesla outlasted almost all of them. Most of them you haven’t heard of, or if you have only due to some embarrassment. If Tesla can succeed against a wide field like that, then (perhaps) they can succeed in these new categories as well. ---
**Author:** ![Dr.Strangelove](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dr.strangelove/32/6613_2.png) [@Dr.Strangelove](https://boards.straightdope.com/u/Dr.Strangelove)\ **Post date:** [December 14, 2024, 4:19am UTC](https://boards.straightdope.com/t/why-is-teslas-market-cap-so-high/1011594/30 "2024-12-14T04:19:15Z")
> [@Wesley\_Clark](#): > > Chinese EVs are vastly outselling Teslas all over the world. Also, this isn’t true on an individual basis. It’s a little unfair to compare _all_ of China vs. Tesla. The 2023 numbers: > **[Largest EV Companies in 2025 | The Motley Fool](https://www.fool.com/research/largest-ev-companies/)** > > The electrical vehicle (EV) market is growing rapidly. Find out which manufacturers are leading the way with the latest data on the largest EV companies. [![Imgur](https://i.imgur.com/HNUE1hq.png "imgur.com") ](https://imgur.com/HNUE1hq) PHEVs don’t count, IMO. Tesla is actually selling more pure EVs than any other manufacturer. China is higher in total, but there are a bunch of fairly small players that are themselves not especially competitive. Plus, Teslas are undoubtedly a bit higher end on average than BYD and I expect they have a higher ASP. ---
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [December 14, 2024, 4:47am UTC](https://boards.straightdope.com/t/why-is-teslas-market-cap-so-high/1011594/31 "2024-12-14T04:47:25Z")
Even with that, BYDs market cap is 107 billion USD. A tiny fraction of Tesla despite their sales of pure EVs being nearly the same. ---
**Author:** ![Zoobi](https://avatars.discourse-cdn.com/v4/letter/z/13edae/32.png) [@Zoobi](https://boards.straightdope.com/u/Zoobi)\ **Post date:** [December 14, 2024, 4:55am UTC](https://boards.straightdope.com/t/why-is-teslas-market-cap-so-high/1011594/32 "2024-12-14T04:55:16Z")
> [@Wesley\_Clark](#): > > I don’t know if you know MAGA types in your personal life, but they are very into toxic masculinity and think caring about the environment is faggy. Of course I do, and I’d water a lot more than you do. Musk fans are now MAGA and the counterflow is also happening. They aren’t buying Teslas to save the environment, they’re doing it to support Musk (and by essentially direct proxy MAGA) and tweak the noses of libs. Tesla is very much an “image” brand, you buy one to be seen in one. ---
**Author:** ![hajario](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hajario/32/171_2.png) [@hajario](https://boards.straightdope.com/u/hajario)\ **Post date:** [December 14, 2024, 4:58am UTC](https://boards.straightdope.com/t/why-is-teslas-market-cap-so-high/1011594/33 "2024-12-14T04:58:10Z")
> [@Zoobi](#): > > Tesla is very much an “image” brand, you buy one to be seen in one. The truck sure, but not the regular cars. This is complete ignorant bullshit. You literally can’t go a minute without seeing a Tesla driving around here. It’s a common everyday car. It’s no more an image car than a Honda. ---
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [December 14, 2024, 5:29am UTC](https://boards.straightdope.com/t/why-is-teslas-market-cap-so-high/1011594/34 "2024-12-14T05:29:25Z")
> [@Zoobi](#): > > > [@Wesley\_Clark](#): > > > > I don’t know if you know MAGA types in your personal life, but they are very into toxic masculinity and think caring about the environment is faggy. > > Of course I do, and I’d water a lot more than you do. > > Musk fans are now MAGA and the counterflow is also happening. They aren’t buying Teslas to save the environment, they’re doing it to support Musk (and by essentially direct proxy MAGA) and tweak the noses of libs. > > Tesla is very much an “image” brand, you buy one to be seen in one. MAGA diehards tend to prefer trucks because they tend to subscribe to very strict definitions of masculinity. The Tesla cybertruck sells about 70k units a year. The Hyundai elantra sells about 125k units a year. There is no massive market for the cybertruck. [‘Few Democrats willing to buy a Tesla’ after Elon Musk backs Trump, investor warns](https://finance.yahoo.com/news/few-democrats-willing-to-buy-a-tesla-after-elon-musk-backs-trump-investor-warns-170050119.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cucmVkZGl0LmNvbS8&guce_referrer_sig=AQAAAJtFilpKaDq0yabb_ssTNorZiK9bUZUtJRBa2MlpQqlt2zdPUL479uxt0YCNjwFH2WsGSFeeVD8JwFQK-knWZtB6a_G8O3rWeMNEuRh0WcoZzU9Vr0QKA4Kkx2VKuc3_0x5oxEwusR73l5JDU-PTINcYpRcCgz2QrsmlsW6vL1bw) > New data from analytics firm CivicScience shows Tesla’s favorability among Democrats has dropped to 16% as of July 16, compared to 39% in January. Among Republicans, the data shows favorability decreased to 23% from 36% in the same time period. ---
**Author:** ![Dr.Strangelove](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dr.strangelove/32/6613_2.png) [@Dr.Strangelove](https://boards.straightdope.com/u/Dr.Strangelove)\ **Post date:** [December 14, 2024, 7:30am UTC](https://boards.straightdope.com/t/why-is-teslas-market-cap-so-high/1011594/35 "2024-12-14T07:30:24Z")
> [@Wesley\_Clark](#): > > ‘Few Democrats willing to buy a Tesla’ after Elon Musk backs Trump, investor warns Since that was dated July 16 and we actually have the Q3 sales numbers from July-Sept, we can actually check if the investor was full of shit or not. Answer: the investor was full of shit. 3Q24 was up quarter-to-quarter and year-to-year: [![](https://cleantechnica.com/wp-content/uploads/2024/10/Tesla-quarterly-sales-Q3-2024-800x445.png) ](https://cleantechnica.com/wp-content/uploads/2024/10/Tesla-quarterly-sales-Q3-2024-800x445.png) Wasn’t a _stellar_ quarter but the narrative that “few Democrats are willing to buy a Tesla” appears to be nonsense. I guess we’ll see next quarter if Musk’s more full-throated support for Trump has had any negative effect. My prediction: it won’t. > [@Wesley\_Clark](#): > > There is no massive market for the cybertruck. Probably not massive. But it’s nearly outselling every other EV truck combined and is already profitable. Won’t ever be Tesla’s top seller in the way the F-150 is Ford’s, but it’s a nice little profit center for them. ---
**Author:** ![Alessan](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/alessan/32/465_2.png) [@Alessan](https://boards.straightdope.com/u/Alessan)\ **Post date:** [December 14, 2024, 11:51am UTC](https://boards.straightdope.com/t/why-is-teslas-market-cap-so-high/1011594/36 "2024-12-14T11:51:59Z")
I think EVs, and Teslas in particular, have passed an economic event horizon, and people are now buying them not because they’re cool or to save the planet, but because they’re a sensible purchase. ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [December 14, 2024, 4:00pm UTC](https://boards.straightdope.com/t/why-is-teslas-market-cap-so-high/1011594/37 "2024-12-14T16:00:19Z")
> [@Dr.Strangelove](#): > > > [@Wesley\_Clark](#): > > > > ‘Few Democrats willing to buy a Tesla’ after Elon Musk backs Trump, investor warns > > Since that was dated July 16 and we actually have the Q3 sales numbers from July-Sept, we can actually check if the investor was full of shit or not. Answer: the investor was full of shit. What do those sales figures reveal about whether Democrats are willing to buy Teslas? ---
**Author:** ![Zoobi](https://avatars.discourse-cdn.com/v4/letter/z/13edae/32.png) [@Zoobi](https://boards.straightdope.com/u/Zoobi)\ **Post date:** [December 14, 2024, 4:08pm UTC](https://boards.straightdope.com/t/why-is-teslas-market-cap-so-high/1011594/38 "2024-12-14T16:08:01Z")
> [@Wesley\_Clark](#): > > MAGA diehards tend to prefer trucks because they tend to subscribe to very strict definitions of masculinity. This is of course true (see below), but Teslas are seen as masculine almost by definition because of Musk’s performances. > [@Tesla Cybertruck](https://boards.straightdope.com/t/tesla-cybertruck/843866/1375): > > I think it may be a pretty good product fit for certain locales that aren’t fans of EV sissymobiles… ---
**Author:** ![The\_Librarian](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/the_librarian/32/402_2.png) [@The\_Librarian](https://boards.straightdope.com/u/The_Librarian)\ **Post date:** [December 14, 2024, 7:34pm UTC](https://boards.straightdope.com/t/why-is-teslas-market-cap-so-high/1011594/39 "2024-12-14T19:34:52Z")
Can we please stop talking as if the sales numbers of Tesla have any influence on the stock price? The two aren’t even vaguely correlated. ---
**Author:** ![bump](https://avatars.discourse-cdn.com/v4/letter/b/7c8e57/32.png) [@bump](https://boards.straightdope.com/u/bump)\ **Post date:** [December 14, 2024, 7:47pm UTC](https://boards.straightdope.com/t/why-is-teslas-market-cap-so-high/1011594/40 "2024-12-14T19:47:35Z")
> [@We\_re\_wolves\_not\_werewolves](#): > > some have argued that Tesla is primarily a technology company, rather than a car company, I think the only person doing that is Musk himself. But you’re right- they’re definitely trying to position themselves that way in the market, because once GM, Ford, Stellantis, Fiat, Toyota, Nissan, Honda, etc. all get into the EV game full-time, Tesla’s market share is going to drop precipitously because they’ll all do it better and/or cheaper than Tesla for most of what people _want a car for._ Tesla’s real hope is to position themselves as a maker of rolling technology or some such nonsense like that, because they’re not going to be able to out-manufacture the big boys. I mean, Ford alone has twice the revenue that Tesla does, and Toyota has almost twice Ford’s. That means a lot more money to plow into R&D and optimizing manufacturing. > [@Wesley\_Clark](#): > > Is there a reason Tesla is valued so highly? The P/E ratio is over 200 now. I just want to point out that on November 4, the price was $242 a share. It’s now $436 a share. Coincidence? I suspect not. [Previous page](https://boards.straightdope.com/t/why-is-teslas-market-cap-so-high/1011594.md?page=1) [Next page](https://boards.straightdope.com/t/why-is-teslas-market-cap-so-high/1011594.md?page=3)