Want to invest in electric cars? GM could be a better bet than Tesla

[TruckElectric]

Link here: CNN By Chris Isidore, CNN Business

Tip: DO NOT take Chris Isodore's advice on anything stock related!

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[alan auerbach]

Link here: CNN By Chris Isidore, CNN Business

Tip: DO NOT take Chris Isodore's advice on anything stock related!

Can anybody guess how much the Texas plant will cost Tesla to open? And how much profit Tesla would make on each CT sold?

I would guess (with no training or credentials to do so) that the costs -- spending over a year on the massive fleet of construction equipment and operators; the stamping, pressing, robotic, and painting machinery that's being prepared offsite; the army of unseen planners and supervisors; and the land itself -- would set Tesla back five million.

I'd similarly guess that the profit (after material and operational costs) per vehicle (CT or Y's) would be a couple thou.

If correct, suppose they make and sell 100 vehicles a day, six days a week. In a decade the $5 mill investment would yield $60 mill.

Do my figures and math look at all realistic?

 

[Crissa]

Can anybody guess how much the Texas plant will cost Tesla to open? And how much profit Tesla would make on each CT sold?

....would set Tesla back five million.

...
Do my figures and math look at all realistic?

Alas, no. You're off by a couple orders of magnitude.

The purchase price for the land in Austin was $97 million itself, not counting additions since.

Their M3 production line aims for 5000 cars a week, or 750 a day. They expect to crank out Cybertrucks faster, because of the simplified build and purpose-built building.

-Crissa

 

[ajdelange]

I think they are way low. 100*6*52= 31,200 vehicles per year. Tesla is hoping for 400,000 units this year. Quarterly revenue for the last quarter was $8.8B

Tesla is in a rapid growth phase. Much of what they net from sales of the CT will go into plant expansion, research... Don't expect a fat dividend checque any time soon.

 

[alan auerbach]

I think they are way low. 100*6*52= 31,200 vehicles per year. Tesla is hoping for 400,000 units this year. Quarterly revenue for the last quarter was $8.8B

Tesla is in a rapid growth phase. Much of what they net from sales of the CT will go into plant expansion, research... Don't expect a fat dividend checque any time soon.

Good thing I never tried to work as a cost estimator!

 

[Luke42]

The argument is obvious.

Tesla is overvalued by any measurement more objective than "I believe they will change the world and make a lot of money doing it."

GM and Ford are not overvalued to the same degree as Tesla, but they make electric cars too. They may even be undervalued.

One could argue, therefore, that GM and Ford are a better investment.

Bring a better investment is not the same thing as being the best team to root for.

I don't know if GM and Ford are good investments (I thought Ford was a good bet for a while, but I've been a little underwhelmed by their EV product announcements so far), but it is an argument worth considering with your calculator out.

 

[ajdelange]

Tesla is overvalued by any measurement more objective than "I believe they will change the world and make a lot of money doing it."

GM and Ford are not overvalued to the same degree as Tesla, but they make electric cars too. They may even be undervalued.

If the companies are evaluated as automobile manufacturers the above is probably correct. But Tesla is not primarily an automobile maker. Many analysts support share prices close to what Telsa is trading at now based on the fact that the automotive part of Tesla's business is only a small part of where its future profit potentials lie. Some think that the value of their AI totally eclipses their value as a car company. I won't argue the wisdom of that assessment but there it is.

One could argue, therefore, that GM and Ford are a better investment.

No investment advisor has ever suggested I buy a single share of any auto manufacturer. Good advice I'd say. Of course none have advised me to buy any TSLA either (but I did anyway).

 

[Zam]

I think they are way low. 100*6*52= 31,200 vehicles per year. Tesla is hoping for 400,000 units this year. Quarterly revenue for the last quarter was $8.8B

Tesla is in a rapid growth phase. Much of what they net from sales of the CT will go into plant expansion, research... Don't expect a fat dividend checque any time soon.

Q1 to Q3 already made 330,000 units, Q4 usually is the stronger quarter, some estimates 530,000 units this year.

A fair comparison would be GigaShenghai, it has only one M3 production line and managed to make 5,700units/week recently, which would be 814 units/day.

 

[FullyGrounded]

Alas, no. You're off by a couple orders of magnitude.

The purchase price for the land in Austin was $97 million itself, not counting additions since.

Their M3 production line aims for 5000 cars a week, or 750 a day. They expect to crank out Cybertrucks faster, because of the simplified build and purpose-built building.

-Crissa

I so want a tour! peace

 

[ajdelange]

I think they are way low. 100*6*52= 31,200 vehicles per year. Tesla is hoping for 400,000 units this year.

Error. They are shooting for 500,000.