As it stands today (02/08/2020) the market capitalisation of Tesla is $266bn. This Market cap shadows the likes of Ford ($26.9bn), GM ($35.6bn), Fiat (13.35bn), VW ($64.34bn), Mercedes-Benz ($39.26bn), and BMW ($34.73bn). In fact, not only is it the biggest yacht in the Marina, its market cap is higher than all of them if they were all ready to stand on top of each other. This has drawn attention amongst some analysts, that the current valuation of Tesla is inflated and hard to justify as it stands. Needless to say, some hedge fund managers have also contested the valuation and have placed short positions against the company — I hasten to add with many a casualty.
As the likes of Amazon, Microsoft and Apple sunset into the $2tn ballpark, it wouldn’t be a quixotic opinion to speculate Tesla to be in the realm of $1tn valuation in the next 3 years. After all, Tesla has all the hallmarks of a 1 trillion contender. even if we were to take from the low hanging fruits of Tesla’s goodwill and IP we could draw from the Level 5 Autopilot features and its potential to be licenced, it’s powertrains that have by now a good pedigree and it’s battery packs which have pushed the envelope of range and tenure. Rather, Tesla’s repute for a $1tn valuation stems from its ability and strategy to embed itself permanently into the future of world mining, securing reserves and stockpiling. Tesla’s R&D early on allowed them to recognise with scientists the limited supplies of materials needed to produce Electric vehicles.
Tesla has also become a main fixture in the American corporate apparatus. Tesla has become what General motors was to America in the 60s, however, Tesla is much more than what GM is now. In a data-driven world, Tesla allows not only Americana to translate to other countries and cultures but also provides a data conduit similar to Android and iOS. Politics in the next 10 years will be about the position of the top tech giants and their ability to operate within countries; they will be Amazon, Microsoft, Apple, and in my view Tesla. America will champion Tesla and will ensure it’s a can’t fail business.
One of the inconceivable notions about this future valuation is Tesla and its market fit in regards to the price point of vehicles, which in order to secure a more dominant foothold would need to accommodate a more inexpensive price point for new vehicle ranges. This would spur a faster adoption in the likes of China and India which would become major adopters. America once found it hard to…