With more than $ 200 billion in market capitalization, Toyota leads the automotive sector, far ahead of the German firm VAG which produces slightly more vehicles (10.8 million, compared to 10.7 for Toyota) but whose market value exceeds barely 90 billion. VAG was number 2 until the beginning of December 2019. At that time, Tesla’s share price was $ 336, which represented a capitalization of $ 60 billion. Then, market sentiment exploded with optimism and the price reached $ 770 in early February, an increase of almost 130% in two months … and a market value close to $ 140 billion …

GM and Honda follow (around 50 billion), then a group of firms between 20 and 30 billion.

It is striking to compare market value and industrial production by equating the latter with the number of vehicles sold. We see, then, that Toyota “is worth” nearly $ 20,000 per vehicle sold, closely followed by GM (17) and Ford (13), the other manufacturers remaining below $ 10,000.

Except Tesla, of course!

If we report $ 140 billion and a 2019 production of 367,500 vehicles, this represents $ 380,000 per vehicle sold! … There are clearly growth options in Tesla’s share price … The activity “energy” could partially explain, but this still generates a negative gross margin.

Obviously, Ferrari does better with a market capitalization of 40 billion for 10,131 units sold, or $ 4 million per vehicle, but, obviously, we cannot compare a 488 Pista and a Model 3!

To justify a capitalization of 140 billion with a value per vehicle of $ 20,000 (Toyota level), we must consider a production of 7 million vehicles, 20 times more than in 2019. This requires some investments, but Tesla’s Free Cash-Flow (cash-flow after deducting industrial investments) reached $ 1 billion in the last quarter of 2019.

Tesla has been listed on the stock exchange for 9 years (2011). After 9 years of listing, Amazon generated $ 10.7 billion in turnover and multiplied the figure by 26 in 13 years. The company was worth $ 16 billion and exceeds $ 1,000 billion today.

Will Tesla be the next Amazon?