The drop in sales in 2024 did not take away the record capitalization of Elon Musk’s house, unapproachable by all the others. That’s why it’s still priced so highly
There’s a joke that the Wall Street Journal he recalled, ironically, when commenting on the latest data on the capitalization of car manufacturers: “Tesla won’t burn petrol, but it consumes a lot of money”. This is what market analysts said in 2017 when, according to Elon Musk’s admission, the US company was a month away from bankruptcy and was struggling (in his words) “in a production and logistical hell”. In the effort to launch its Model 3 on a large scale, Tesla was losing around $7,000 a minute and its stock market capitalization was around $40 billion. Eight years later, today Tesla is worth almost 1,200 billion on Wall Street, about four times more than the sum of all European companies. And it is a sensational result because for the first time since 2011, it saw its annual deliveries fall by 1.1%: the stock was affected, losing more than 8% on Wall Street. Not a little but Tesla continues to compete in another championship on the stock market: despite capturing only 2.4% of global sales. And it is worth, just to understand the abyss even better, 32 times the Stellantis group – which in one year lost 40% on Piazza Affari. Ironically: the president of Stellantis, John Elkann, was among the architects of the Tesla rescue.
A SUPER EXCLUSIVE CLUB
—
Tesla is part of the Trillion dollar club like big tech companies like GoogleAlphabet, whose operating margin is 32%. Why does Elon Musk’s house travel so fast? The bet is that, thanks to the supremacy in software, Tesla models will be the first to become an iPhone with wheels which is the dream behind the project of the visionary of South African origin. The market is convinced that in this undertaking it will be helped by Donald Trump, president-elect of the United States, given that he is now something more than a member of his think tank. It is no coincidence that after the re-election of the Republican magnate to the White House, Tesla shares gained around 40% on the stock market, driven by the hope that Trump will relax the rules on self-driving cars and other experiments in which Tesla excels. In October Musk anticipated that his robotaxis will be on American roads by 2026 and that their mass adoption could bring Tesla’s capitalization to $5 trillion. It may seem like an incredible gamble but in any case, Musk has a large number of individual investors who hold 38% of the company’s capital, ready to give him almost unlimited credit. After all, they are right: those who invested 1,000 dollars in the listing of Tesla in 2010 today have, incredibly, over 250 thousand dollars in their pocket while with the same sum invested in General Motors, today they only have 22 dollars more in their wallet.
so do the others
—
It was said of the European houses that at the end of 2024 they were worth a total of 337 billion euros, divided as follows: Ferrari 76, Porsche 54, Mercedes-Benz 53, BMW 50, Volkswagen 46, Stellantis 37, Renault 24 and the other 7. It is clear that the ratio between capitalization and sales is not proportional. The year ended with Volkswagen selling more or less double that of Stellantis and Renault combined. We need to look to the East to see more important numbers. BYD, which seems destined to overtake Tesla in sales numbers, thanks to notable growth in 2024, has a capitalization of 756 billion but refers to the group as a whole and not just to the automotive division. Toyota, number 1 in the world in terms of sales, does not go beyond 262 billion. Once again we understand how much Tesla is more of an electric car manufacturer. And that Musk makes ease one of his main weapons. The phrase in August 2018, in the midst of the crisis due to the aforementioned problems related to the Model 3, is memorable: “I’m thinking of transforming Tesla into a private company by buying all the shares at a price of $420” he wrote on the then Twitter . Moral: the stock first rose by 11%, then fell by an even greater percentage in a few days when it was realized that the move was impracticable. Musk was fined $20 million for disrupting the market and was removed as Tesla president for three years. It’s still there.
© ALL RIGHTS RESERVED