ColdFusion - Tesla Now the Most Valuable Car Company in the US - Why?

Starting point is 00:00:00 You are watching Cold Fusion TV. And welcome to another Cold Fusion video. Earlier this month, Tesla overtook Ford and General Motors in market capitalization. This makes them the most valuable car company in the United States. But for some eye-popping news in the automotive world, the market value of Tesla, the manufacturer of high-end electric cars, has actually surpassed that of Ford and General Motors. motors. Amazingly, Tesla has risen 42% since the start of 2017. At about $300 per share, the company

Starting point is 00:00:46 is now valued at $53 billion at the time of creating this video. Just in case you're wondering, other car companies such as Toyota are still valued higher. Now, many of you out there will be scratching your heads and thinking, how is it possible for a company that lost $675 million last year able to be worth more than Ford and GM? These companies made $9.4 and $4.6 billion last year respectively. Well, maybe Tesla somehow sold more cars. Not even close. Ford sold 17.5 million cars and GM 10 million cars in 2016.

Starting point is 00:01:24 And Tesla? Just over 76,000. So what's going on here? There must be something more. Are all of these investors just really stupid? No, not really. The short end of the story is that investors see a great deal of potential in Tesla. They're in love with the brand and the idea of a person like Elon Musk.

Starting point is 00:01:46 From solar energy to the gigafactory to the Model S and Model X, there's disruption written all over this company and with that comes a great expectation for the future. The hard figures are starting to come in as well and it's looking positive in terms of growth. Tesla's sales have gone up 300% in four years while GM and Ford have hardly budged. Investors see this as the start of something and they're forecasting much larger growth in the future. So where will this growth come from? Mainly the Tesla Model 3, which is set for a 2018 release. When this car hits the market, it's set to unleash the electric car into the hands of the masses.

Starting point is 00:02:25 The base model of the Model 3 will cost $35,000 before incentives. Now that doesn't sound cheap, but keep in mind that the standard Tesla Model X goes for around $75,000. The model 3's proposed specs are as follows. 0 to 100 km an hour and 4 seconds for the premium model and 6 seconds for the base model. The range is 300 miles for the premium model and 215 miles for the base model. The car has over 400,000 pre-orders. In addition to this, the Tesla Gigafactory is up and running, supplying new generation batteries to cars, homes, companies, parts of cities and even whole islands like one of Hawaii's. one of Hawaiians.

Starting point is 00:03:06 I've talked about the Gigafactory in previous videos. It's the largest building on Earth in terms of physical footprint and according to Musk, 100 factories could power the entire planet. In terms of the future, there's an upcoming electric semi-trailer to be made by Tesla and it's going to be announced in September. So some people out there are just waiting for something to go catastrophically wrong. Though many of those same people were waiting for the same thing to happen to Amazon when and they weren't turning a profit for many years.

Starting point is 00:03:38 In fact, it was almost 10 years after its founding until Amazon made its full first year of profit. Sometimes disruptive technology on a global scale takes a lot of capital to get the momentum needed to change the world. The fuel price could also be a factor in Tesla's long-term survival. I've heard some analysts say that OPEC has failed and there's actually a complete glut of oil around the world and prices are only artificially high for geopolitical reasons. These analysts say that the price could fall to almost zero when all of this supply meets a falling global demand. If petrol was super cheap like this scenario, it would put Tesla in a harder place. Other analysts have suggested that geopolitical tensions in the Middle East, coupled with an unwinding of the US dollar as the world's reserve currency, could cause oil to spike and stay high.

Starting point is 00:04:27 Really, it's too hard to say right now which way this is going to go, so we'll just leave this on the shelf. So here's one of the big questions. Is Tesla overvalued? The answer is yes, but technically almost everything on the stock market is overvalued. Price to earnings ratios are lofty, but moreover for the United States, if we take the measure of the Wilshire 5000 index, which is a broader measure than just the SMP 500, and divide it by the nation's GDP, we get a chart like this. This chart is a great way to see how fairly valued a stock market is in comparison to a nation's

Starting point is 00:05:03 production. A quick shout out to Mike Maloney for this little. analyst trick. Notice how after a steep rise in the gradient, there's always a market sell-off and recession. This is because the market was overvalued and investors began to realize. Right now, we're in risky territory and a mass market sell-off will drag Tesla with it. So another question, are Tesla stocks a bubble? Technically, yes, but again, everything is in a bubble right now. Stocks, bonds, real estate, student loans, car loans, and debt in general. And of course, we have central banks and their money printing to thank for this situation. But then again, with

Starting point is 00:05:41 Tesla, there's a bit of difference to just blind hype investment. The difference is their track record. When Tesla started, everyone laughed at them. People exclaimed that electric cars were slow and have a short range. Who on earth would want that? It's just not going to work, they said. Time and time again, Tesla has come out and shocked people. Now they're one of the most recognized new brands of this century. There's just not another company out there like them at the moment. But this is a stock that has defied everything that Wall Street has thrown at it and it just doesn't fit any conventional models.

Starting point is 00:06:18 It's clear that Tesla has had an impact on the auto industry. Remember, before them, there was no mainstream electric car, but now many other established companies like Mercedes, BMW, Porsche and even GM are starting to build their own fully electric cars. Eventually, they'll catch up, but right now Tesla has a head-stop. start and an underdog story that people just seem to love. When you look at the things that Tesla Energy is doing at the same time, it goes even wider than that.

Starting point is 00:06:46 It turns into one company taking a brand new approach to old century problems. How many times during your life do you get to see things like this happen right in front of your eyes? So what do you guys think? Do you reckon Tesla has a future? Or do you think they're just going to crash and burn? Let me know your thoughts below. Thanks for watching this video guys.

Starting point is 00:07:06 Hope you got something out of it. If you just stumbled across this channel, feel free to subscribe. This has been to go-go. You've been watching Cold Fusion and I'll catch you again soon for the next video. Cheers guys, have a good one. Cold Fusion, it's me thinking.

ColdFusion - Tesla Now the Most Valuable Car Company in the US - Why?

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