This week, we have been paying attention to some market surprises in 2021: various charts, relative performance, returns, and other unexpected issues.
Today’s surprise: Ford and Tesla.
Everyone knows that Tesla has been in tears and has become the 10 largest company by market value, making Elon Musk the richest person in the world. TSLA’s stock performed very well, rising 49.8% in 2021.
Regrettably, how seriously TSLA lags behind F, which grew by 137.5 percent in 2021—almost three times the market performance of the pioneer electric vehicle company.
This is where things get interesting:
Ford’s market value is 95 billion U.S. dollars, revenue is 135 billion U.S. dollars, and profits are about 3B U.S. dollars.
Tesla has a market value of more than US$1 trillion, revenue of US$46.8B, and profit of approximately US$3B.
Tesla’s narrative is very exciting: its technology is ahead of everyone else by a few years, especially its in-vehicle software and wireless updates; its design is better, battery technology is outstanding, the endurance is world-class, and the driving experience is comparable to others on the market. No product is the same.Stock prices will rise because S&P 500 index managers will must Add the company to the index.
Ford’s narrative is little known, but it is also very interesting: the only American automaker that did not need bailout during the global financial crisis, its quality and design have been greatly improved. The company’s Mustang Mach E is a hot spot for electric vehicles, and Lightning is a new electric version of Ford’s 150 pickup (the best-selling car in the United States). 200,000 units have been pre-sold. The new Bronco has also achieved great success, and the EV version will definitely follow.
What is the Tesla story today? This is more challenging than the 2010s: their success has attracted competitors from all over the world, from well-funded start-ups to world-class traditional car manufacturers.Their future product lines let us call them work in progress, especially network trucks and Ford lightning and Chevrolet Silverado. That’s when we get endless new updates from Porsche, Audi, Lucid, Rivian, Polestar, Mercedes, Volkswagen, Hyundai, GMC, Mazda, BMW, Volvo, the rest of Ford and anyone else I’ve forgotten Before choosing.
Ford is currently trading at 1/10day Tesla’s market value. Can you imagine any scenario where they are at (or close to) parity ten years from now? Are Ford and Tesla both worth $500B? I think there is at least a 25% chance that it will become a reality.
Put another way, would you think that Tesla will still be bigger than Ford in 2032?
I don’t know which side of the bet I want to be on. ..
What does the S&P 500 Index think of the top 5 stocks by market capitalization? (January 3, 2022)
2021: returns on small, medium and large-cap stocks (January 4, 2022)
Surprising Laggards in 2021: Amazon (January 5, 2022)
You can also take a look:
7 major trends in the automotive market (December 23, 2021)