Analysis: Tesla is not a car manufacturer

Analysis: Tesla is not a car manufacturer

405 percent. This is how much the Tesla share (WKN: 88160R101, WKN DE: A1CX3T, ISIN: US88160R1014) gained in value in twelve months. Tesla is therefore worth almost 600 billion euros - four times as much as the VW Group, which sold more than ten times as many cars from the core VW brand alone in 2020. Tesla is even worth more than VW, Daimler, BMW, GM, Ford, Stellantis, Honda, Hyundai and Kia combined (see graphic )! 

Observers immediately speak of one  bubble  on the stock market, which will soon burst. Well, it's not that simple. The stock market always trades the future, not the status quo. And the trend speaks for the Americans: Analysts expect an average of $49.5 billion in sales in 2021, and $110.7 billion in 2025, while operating profit is expected to triple to $15 billion. Established car manufacturers cannot boast such dynamics.

But perhaps the comparison is flawed anyway. Tesla Inc. may not be a classic car company at all and is being compared to the wrong peers. If you only evaluate car sales, you ignore the other business areas and core competencies of the company founded by Elon Musk and the long-term value creation that results from them. In the future, the group could develop additional sources of income with high profit margins through services and software offerings in the area of ​​autonomous vehicles, GPS services or performance upgrades. As is well known, Tesla also produces batteries and is also an energy company. CEO Musk wants to build a taxi fleet of autonomous electric cars, which would be a step towards becoming a comprehensive mobility provider. Tesla is ahead in online sales and is shaking up the scene with the cryptocurrency Bitcoin.

Growth fantasy

And then there is the issue of big data. Just as Apple or Amazon have crept into our living rooms, Tesla can take the wheel on the go. Data can be used in a variety of ways: for advertising purposes (which restaurant does the navigation system suggest?), for technical services or even for insurance purposes. This results in significant growth potential. McKinsey experts estimate that the market for in-car data will be worth $750 billion by 2030. And TU professor and Fraunhofer Austria managing director Wilfried Sihn says in one interview the automotive industry that he could certainly imagine that, similar to the case with cell phones, cars might no longer cost anything in the future and money would only be earned through connected services.

In all of these areas, Tesla is years ahead of traditional automakers. They are just trying to modify their outdated business models so that they can build competitive electric cars. Former world cell phone market leader Nokia should serve as a warning example; after Apple invented the smartphone, it quickly left the window.

Amazon sends its regards

Tesla is a tech company. So let's compare it with tech giants. These dominate the list of the most valuable companies in the world. It leads Apple ahead of Microsoft and Amazon. Tesla has already made it into the top ten. In comparison, the share no longer looks quite as expensive, but it is still proudly valued. After all, these tech giants have been in business for a long time and are making billions in profits. Tesla, meanwhile, is just out of the red. Of course, there was a time when a bookseller called Amazon, which had been making losses for years, also seemed hopelessly overpriced. Today it is worth more than any industrial company in the world. And no one would call Amazon a bookseller.

This is the league in which Tesla plays, and not the league with 100-year-old car manufacturers who, in view of high CO₂- Penalties from the EU now have to frantically turn their business model inside out and succeed in new territory. For no reason at all, not that much capital went into the stock. That should give the top dogs in the auto industry something to think about.