$Tesla (TSLA.US)$ It is futile to preach to a crowd that thi...
$Tesla(TSLA.US$ It is futile to preach to a crowd that thinks traditional metrics used to evaluate stocks are fuddy duddy rubbish, examples of long-ago industrial age technology. Today it is all about projections, all about sure-fire disruptive technologies like EV's and FSD.
Some old timers smile when we see startling valuations for $Rivian Automotive(RIVN.US$ , $Lucid Group(LCID.US$ , $Tesla(TSLA.US$ and other EV companies. Does anyone recall Digital Equipment or Data General? They were "disruptive" companies, stock market darlings, growing hyper-fast. Until the market segment became saturated, and it all fell apart. Does anyone recall the beginning of the PC market? I bought a top-of-the-line Xerox PC for I think $3,000 or so, about $8,000 in today's money. Xerox was hot. Then after Xerox disappeared -- the disruptive PC market continued to soar and one of the huge market faves was Gateway computers. You could see their distinctive cartons everywhere, they were on the way to market domination. Uh, anyone buying Gateway computers these days? Wang Labs, the forerunner of the PC was another market darling, a sure-fire new technology called word processors. Then the company went pffft.
What most of the hot-stock crowd piling into Rivian and Lucid don't realize is how quickly a hyper-growth market can slow down. The overall vehicle market l is mature, slow-growth, saturated, cyclical and highly competitive. Not a market that sports generous valuations -- in fact for decades most vehicle manufacturers have traded at less than 1X revenues.
How long will it take for the "disruptive" EV segment to run into this brick wall? How soon will even EV segment become crowded and saturated? According to sky-high market caps for Tesla, Rivian and Lucid, the EV vehicle segment will grow at 50% or better, undisturbed for another decade. Their 20X and 30X revenue valuations will not compress toward the industry 1X average for the foreseeable future, despite a flood of new EV's entering the market over the next several years.
Good luck with that. I foresee ugly saturation reality colliding with the hyper-growth EV story circa 2025, at the latest 2027. And when that happens. lots of EV stocks -- vehicle makers and support companies -- will go south.
I know, I'm too old fashioned to understand the new reality. But I've seen a whole lot of disruptive technologies -- fax machines, cellular phones, PC's, mini-computers, smart phones, cable TV and many others -- become saturated and slow growth much sooner than Wall St. predicted.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment
jake Nho : What is worse than Tesla and Rivian?
gas 1126 : Compared with traditional fuel vehicles, new energy vehicles should invest the most in technology costs, especially core electric engines. Nowadays, most auto manufacturers invest a lot of money in research and development in this area. I think this has become a trend.
THEWIZARD : this too shall pass
where is my money : "How long will it take for the "disruptive" EV segment to run into this brick wall? "
2035. Many regions have outlawed sales of new ICE between 2030-2035, so sometime around then end of that period the market could become saturated. But just remember, even after it is saturated your money is still better in a growing segment. If you owned QQQ, a broad spectrum of tech stocks, in 1998, that would still be one of your best investments to date, despite volatility and crashes. So what your saying is true, but still not a reason to sit on the sidelines.
Anyone to hit : Look at blackberry who owned the smart phone business and now doesn’t make phones at all. The competition caught up and surpassed them making them obsolete with big money. Same thing is happening with Tesla but it will take a much longer time to play out. Big money will force Tesla out eventually
Apple Cat Anyone to hit: "Same thing is happening with Tesla but it will take a much longer time to play out. Big money will force Tesla out eventually"
Not so long as Tesla remains the innovation kings.
And Tesla IS the "big money."
They have everything they need to become the most valuable company in the world. It's happening right before my eyes. History will look back at this and wonder how anyone could have missed it.
BSqueen Apple Cat: big nothing look at the book value of the company omg
Arigato Investor : I have been investing in innovative companies for decades. When you say "look at the book value", that shows you don't have any idea how to value this type of companies.
It's not too late to start with buying 1 share, then look for opportunities to add the 2nd, 3rd shares. Those three shares will turn into a Tesla car down the road.
Though I have to make it clear, all of my posts are just my opinion. Not investment advice.