Elon’s The Captain Now

via Unsplash

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“Bah God, that’s Elon’s music…”

Yesterday Tesla became the world’s most valuable automaker surpassing Toyota. Shares rose 5% midday to $1,135, which gave the company a market valuation of $206.5B, eclipsing Toyota’s $202B… and prompted CNBC to run an article titled “Here’s how rich you’d be if you bought TSLA stock in 2010.”

King of the castle

It should be mentioned that Toyota can still pull rank given a few crucial details…

Tesla, for one, has yet to turn an annual profit. Toyota, on the other hand, had the highest profit of any car company last year, with a net income of $17.5B.

And if we’re looking at an enterprise valuation, Toyota still holds the crown, as it’s $290B value with debt bests Tesla’s $252B.

Lastly, and I’m sure this doesn’t matter much, Toyota’s production numbers put Tesla’s in a bodybag. Tesla rolled 103k vehicles off the assembly line, er, out of that big f*cking circus tent, in Q1 of this year, while Toyota produced 2.4M

Cooler Commentary

$TSLA has risen 170% YTD, while every other car company on the planet has been having a worse time than VW during diesel-gate. Toyota’s stock is down nearly 12% during 2020… which isn’t bad considering Ford’s fall from grace (-36% this year).

So, what gives?

Well, we already know that TSLA’s stock price is driven largely by perceived upside (we see you, Robinhood traders). Hell, even Elon thinks it’s overpriced.

And just yesterday Elon sent out a congratulatory email to his employees, leading everyone to believe that Tesla hit its Q2 delivery target of 72k vehicles. Earnings for the Model Y maker will be announced at the close of markets today.

Plus big auto is taking its lumps during the year of our Lord 2020. Unit sales of GM (-34%), Toyota (-34.6%), and Fiat (-38.6%) in the US fell by more than 30% in Q2 compared to the same period last year. Which isn’t entirely surprising considering nobody is f*cking driving. Just ask oil companies…

 

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