From the New York Times, “Tesla would have lost hundreds of millions of dollars had it not earned $400 million in interest on cash and investments and $595 million from selling credits to other carmakers that failed to meet emissions regulations that Mr. Trump has pledged to eliminate.”
The price is irrational but besides the cars they have the charging network which is now open to pretty much everyone and the robot fleet to compete with Waymo allegedly coming out in several months in selected locations. Supposedly, and I highly doubt this, completely unsupervised self driving next year which will be at a higher subscription price than supervised.
Having self driving that exists in the lab and having self driving that can pass government regulations are not the same thing though.
There are 5 levels of self driving cars in the US. The vast majority of self driving cars are a level 2. A few models are level 3, but they are heavily regulated in where and how you can use them.
Tesla’s best models are level 2 so they are already behind various other companies on self driving who actually have level 3 and level 4 cars on the road.
A level 5 car that is legal nationwide is still a long way away.
But if you’re talking about Tesla releasing level 4 taxis, you still run into the issue that Musk and tesla are poison. A lot of people aren’t going to accept rides for a company where the profits help prop up a nazi. I’d rather take an uber or a waymo than give money to tesla and musk. I’m sure endless people feel the same.
Also how is Musk going to get state and city governments in blue states and blue cities to approve of his level 4 robotaxis? There is going to be pushback against that.
I don’t disagree with any of that. I’m just pointing out why casual investors will be interested without digging deeper. A lot of them are Musk fanboys of course so no logic applies.
One big reason that is helping to sustain Tesla’s market cap is that it is an element of the S&P 100 & 500 and Nasdaq-100 stock indices, which means that people invested in mutual funds or ETFs designed to track those indices are investing in TSLA by default, often with every paycheck they receive.
Well, that’s kind of the case with every stock, as indexes are weighted by market cap. Index funds will rebalance their holdings in sync with how each company’s market cap changes in relation to the other stocks in the index.
That still doesnt explain why the market cap is so high.
Im assuming Q2 will be bad for tesla too. Continuing slumps in sales.
About 1/3 of all teslas sold in the US are sold in California. I doubt sales ever recover there.
Msybe after Q2, Q3 and Q4 all give bad news investors will start to realize teslas future is not that great.
Despite all of the insanity, Tesla sold 128k EVs in the US in Q1 which was more than everyone else combined. Ford sold 23k, Chevrolet 19k. The stock is up 6% so far today while the rest of the market is flat.
No one is buying the truck but the cars seem to be doing relatively well. My guess is that most of the buyers are apolitical.
It’s a meme stock. That pretty much explains it all.
Yes, but Ford and Chevy don’t exclusively sell EVs.
PS: Look for a big layoff once Musk gets back to CEOing.
This is the source of much of Tesla’s ostensible profitability and is dependent not only on regulations but automakers not expanding into the BEV (or other low emissions vehicle) space.
In essence, yes. So many people bought into it—including market analysts—because of the supposed ‘genius’ of Elon Musk, and the thesis that Tesla wasn’t an automaker but was a ‘technology company’, which allowed its valuation to inflate like any of a number of other examples of tech startups which deflated once they couldn’t live up to the hype. However, Tesla has been able to sustain itself for longer because it isn’t total vaporware; they build real products that a lot of people like, and even they catch fire or kill a few people who placed too much trust in Musk’s bombast, we’ve been conditioned to expect deaths from automobile defects.
The reliability of Full Self Driving/Autopilot, Robotaxis, promises of automated OTR transport, and an autonomous humanoid robot slave for every (rich) household have been grossly overstated to the point of being fraudulent but until Musk started seriously meddling in politics and making fascist salutes few people really wanted to acknowledge the gap between promotion and reality, but it was persuasive enough to convince investors that the stock wouldn’t downturn even as the valuation grew to more that even grossly optimistic projections of Tesla production could possibly generate in revenue even with emissions credits.
Stranger
Toyota sells about 11 million cars a year, vs Tesla’s 1.8 million global car sales a year. Toyota also has a far higher profit level. Toyota’s Q1 profits in 2024 were 6.5 billion, vs Tesla’s profits of 400 million in Q1 of 2025 (Toyota hasn’t released Q1 profits in 2025, but its probably in the same region of about 7 billion).
Despite that, Toyota’s market cap is about 1/3 of Teslas.
Also tesla sold about 600k EVs in the US in 2024. If they sell ~130k EVs each quarter this year, that is a drop to 520k EVs sold this year.
Global EV sales are up while Tesla sales are going down. Tesla’s share of the EV market is shrinking.
Even with that, Tesla isn’t a frontrunner. Multiple car companies currently build cars capable of level 4 driving while Tesla is still stuck on level 2 self driving. Tesla is basically making empty promises to catch up to other companies that already have products on the market and have for years. Hyundai, Google, GM, etc already produce robotaxis with level 4 self driving.
Lots and lots of companies are working on bipedal robots. Hyundai owns boston dynamics for example.
It is a meme stock. I just hope it fails and it takes Musk with it.
Who is selling Level 4 cars that work outside of relatively small areas like Waymo?
GM, Apollo, Hyundai and I think amazon have level 4 cars.
The issue is that they are geofenced for safety reasons.
Mercedez Benz offers level 3 self driving on some consumers models, but there are regulations about where and how you can use them.
The Benz level 3 cars are the highest level of self driving car that a consumer can buy. Consumers can’t buy level 4 self driving cars yet.
My point is that we have cars capable of level 4 self driving and have for some time now. Multiple companies have them. Tesla is just bragging that it’ll eventually catch up to its competition, whose market caps are a fraction of Teslas despite them already possessing technology Tesla is still trying to figure out.
Tesla doesn’t seem capable of anything beyond level 2. Even if they could get beyond level 2, how are they going to get government approval for level 4 or level 5 self driving?
I have no idea. I just want to buy a Level 3 or 4 car when I get a new one. If my Tesla gets totaled tomorrow, who is even going to sell me a Level 2?
Here is Mercedez benz level 3 self driving car. I think its the only level 3 self driving car available to consumers in the US right now. But you’re only allowed to use it in certain parts of CA and NV.
Very promising obviously but only on highways in CA and NV and also only in fairly good weather. It’s not nearly an equivalent yet.
It was my understanding that Tesla is level 2 also. I have no idea if there is a difference in quality of level 2 self driving between companies, but various US companies sell level 2 cars.
I asked Gemini and it gave me this list:
- Tesla: Offers Autopilot (standard) and Full Self-Driving (FSD) capability (optional upgrade). Despite the name, FSD currently operates as an advanced Level 2 system requiring full driver attention.
- General Motors (GM): Offers Super Cruise (hands-free capable on mapped roads) on many Cadillac, Chevrolet, GMC, and Buick models. Basic Level 2 features are available on other models as well.
- Ford / Lincoln: Offers BlueCruise (Ford) and ActiveGlide (Lincoln), which are hands-free capable Level 2 systems on mapped highways. Many models also feature Co-Pilot360 which includes standard Level 2 features (Adaptive Cruise Control with Lane Centering).
- BMW: Offers Driving Assistant Professional which includes Level 2 capabilities. Highway Assistant allows for hands-free driving up to 85 mph on certain highways.
- Mercedes-Benz: Offers advanced Driver Assistance Packages with Level 2 features. Their Drive Pilot system is technically certified for Level 3 (conditional automation) in limited areas (parts of CA and NV under specific conditions), but outside those constraints, it functions as a Level 2 system.
- Hyundai / Kia / Genesis: Offer systems like Highway Driving Assist (HDA / HDA 2) and Smart Cruise Control with Lane Following Assist across many models.
- Toyota / Lexus: Offers Toyota Safety Sense (TSS) and Lexus Safety System+ (LSS+) suites, with versions (like TSS 2.5/3.0, LSS+ 2.5/3.0/A) including Lane Tracing Assist for Level 2 capability. Teammate / Advanced Drive is their hands-free capable system available on select high-end models.
- Nissan / Infiniti: Offers ProPILOT Assist and the hands-free capable ProPILOT Assist 2.0 on select models like the Ariya and QX80.
- Volkswagen / Audi / Porsche: Offer systems often branded as Travel Assist or Adaptive Cruise Assist that provide Level 2 functions.
- Honda / Acura: Offer Honda Sensing and AcuraWatch suites, which include Level 2 features like Adaptive Cruise Control with Low-Speed Follow and Lane Keeping Assist System (LKAS often enhanced with Traffic Jam Assist for lane centering).
- Subaru: Offers EyeSight driver assist technology, with advanced versions including Lane Centering for Level 2 capability.
- Stellantis (Jeep, Ram, Dodge, Chrysler): Offers Active Driving Assist (hands-on Level 2) and Hands-Free Active Driving Assist (hands-free capable Level 2) on models like the Jeep Grand Cherokee and Ram 1500.
- Volvo: Offers Pilot Assist as part of its driver assistance suite.
- Rivian: Offers Driver+ with Level 2 capabilities.
- Lucid: Offers DreamDrive and DreamDrive Pro with Level 2 features.
Tesla is Level 2. Some argue that it’s 3 but they are full of shit.
No other car company offers Level 2 that works on both city streets and highways at least in the US. Not even close. Many offer 2 or even 3 on highways only which is super fancy cruise control. Waymo is 4 probably in many small geofenced areas and you can’t buy one anyway.
I was mistaken about part of this. I just took a bike ride with a friend who has a fancy Mercedes and it does have limited self driving on city streets but he says that it’s terrible and barely Level 2. He only uses the highway part (in California).