Tesla (TSLA) shares rose from about $ 80 per share at the end of 2019 to nearly $ 700 per share.
The company’s market capitalization was stimulated by its inclusion in the S&P index, and is now more than $ 650 billion – which is possibly the largest major capital bubble in history.
The highlighted competition will include the Audi Q4 e-tron and Q4 e-tron Sportback, BMW iX3 (in Europe and China), Mercedes EQB, Volvo XC40, Volkswagen ID.4 and Nissan Ariya, while cheaper and now available the excellent all-electric Hyundai Kona and Kia Niro, very well-rated small crossovers with an EPA range of 258 miles for the Hyundai and 238 miles for the Kia, at prices of less than $ 30,000, including the $ 7,500 U.S. tax credit. the Model 3 now has a huge direct “sedan competition” from Volvo’s beautiful new Polestar 2 and the premium version of Volkswagen’s ID.3, and next year from the BMW i4. “
– Mark Spiegel
As noted above, faced with an onslaught of competition – by Audi, Volkswagen (VLKAF) and others – and a relatively shallow grag, Tesla’s market capitalization is now more than five times that of Ford (F), General Motors (GM) and Fiat Chrysler. (FCAU), which as a group sells 17 million units a year compared to Tesla’s estimated production of 500,000 cars by 2020.
Tesla’s has little of its own in terms of electric car technology – while its global competitors have more than a century of experience manufacturing and distributing high-quality cars, and subsidizing ongoing operating losses from their efforts at electric cars.
Tesla has been around for 17 years and, adjusted for the sale of emission credits, it was never profitable, even though there was no competition and no need for advertising.
Despite limited global competition, Tesla has increased growth by lowering the price of units. What happens when the well-judged competition is ready for delivery in 2021? Market share will be under pressure and operating margins will decline.
Meanwhile, the unrest in management has increased over the past two years.
Bottom Line
In an era of cultism, Tesla is the stock (and Bitcoin is the currency)!
(Ford is a holding in Jim Cramer’s Action Alerts PLUS member club. Want to be warned before buying or selling Jim Cramer F? Learn more.)
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