Why Tesla is currently not a buy !

Normal brokers and investors react to recent history without forecasting for possible different future. Actually TSLA founded on 2003 and not known for the majority except recently. Do you know TSLA was trading at $12 on 2013 and the same price on 2019. That mean for 6 years, investor saw the same price without any change ! Those who bought TSLA end of 2020 are losers till now. Actually, if we want to select the correct period of owning Tesla from those 20 years age, it will be only 3 years. The year 2013 itself and the period from end of 2019 till end of 2021. It was wrong to own the stock for all other 17 years. Apple at one time was doing to bad to a level of bankruptcy. So, we should not always stick ourselves to a name or news.

We believe that EV “Electric Vehicle” business’ is a golden opportunity and it will be highly expanding, but the competition will also be extreme and dominancy is a question. The EV business’ is huge and not only restricted to cars. It could be batteries. It could be components and like semiconductions and we saw how cars production got limited for this component. It could be also raw material like Lithium for batteries or copper for motors. Again, not to focus on the known raised name and miss the full party.

At one time, EV was a small business and Tesla took too long awaiting the market size to be profitable. We feel, it went up during the transition of the market size to be profitable and the other competitors to get attracted and fully entered. Now competition is too high and Tesla forced to reduce its car’s prices to compete. Ford signed a deal to invest $11.4 billion in EV. Hyundai set $5.5 billion for EV plant in Georgia, US. Toyota to spend $3.8 billion for EV battery plant, BMW to spend $1.7 billion on EV plant and batteries in US.

The auto-drive that Tesla is famous for is also taken. Mercedes-Benz was the first to be authorized for the highest level in auto drive [Reference]. The promised $25,000 car by Tesla that never came, already on sale by Volkswagen. Mercedes has electric car for almost all production classes. Tesla to compete, it started to cut safety measures and minimizing the auto equipment raising slightly accident rates [Reference].

As passengers vehicles industry, Tesla is in above average PE and high valuation. Tesla current PE is 24 times. Can you believe that if you have $600 billion, either you can only Tesla or get all those makers “Toyota, Mercedes, Volkswagen, BMW, Ferrari, Ford, GM, Honda & Hyundai”. Which offer you will select for your $600 billion investments ?!

We don’t mean Tesla is bad or it will not raise. But for us, currently there are better places to put our money on. Who gained from Tesla had gained and what care is our gain in future. For us, Tesla currently is not a buy !

Bellow charts show different comparisons of auto-makers. Below based on Market Cap. Tesla has the highest value of Market cap compared to any other auto maker.

Below based on number of employees. Tesla ranked 12th with 127,000 employees.

Below based on PE ratio. Tesla ranked 21st. Theoretically, there is 20 automaker cheaper than Tesla based on current operations.

Below based on dividends as cash given from company to its investors. Tesla ranking 29th.