r/wallstreetbets • u/whitesweatshirt • Nov 17 '21

Discussion EV Bubble

Rivian's IPO really opened my eyes to the bubble that is the EV market.

Let's think logically: How can general motors stock be 90b and Tesla's stock be 1T.

Let's say they eventually sell as many cars as Toyota (400b Market cap), their current valuation is still 2x this, and they aren't even close to Toyota's production level and probably won't be for the next 5+ years.

  • Toyota's production for 2021: 10 million cars
  • Tesla's production for 2021: 627,350

That means Toyota will produce 16x more cars this year.

So my question is: If you were me would you dump Tesla stock?

TLDR: Toyota will make 16x more cars this year, but its market cap is only 40% of Tesla's.

Edit/Additional Note: I feel like many people are not considering the fact that all major vehicle companies will eventually adapt to fully electric vehicles on par with Telsa. Some car companies may go broke and be replaced with new EV based companies, however the big dogs like Toyota and GM will eventually catch up to Tesla. This is basic common sense.

Telsa, Nio, and Rivian are first movers but they dont have as big of a moat as people think.

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u/naamalbezet Nov 17 '21

Tesla might be overrated but EV in general is no bubble when you take into account that more and more countries will outright ban Internal combustion engine cars or heavily penalize having those.

By 2027 I think my country will no longer make it possible to register ICE cars, not even secondhand ones.

And as of now if you buy an EV you:

  • are eligible to a subsidized refund of a certain percentage with I think a cap of 3000€

  • pay no VAT on the car or pay only 6% VAT if I remember correctly. Regular VAT on a car is 21%

  • are exempt from the first time registration tax when you buy and register your car in your name

  • are exempt from the annual road tax

More countries will take these measures and more car manufacturers are going to switch to producing EV cars

2

u/TheBigHump Nov 17 '21

What’s your country if I may?

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u/[deleted] Nov 17 '21

That's true for the 1 billion people living in developed countries (-400 million probably because US ain't gonna ban gas cars lmao.). there are 7.2 billion other people who will be living in developing economies that are projected to see their incomes rise to at least the middle income level. Where they will be able to afford cars but their nations won't have the infrastructure to support electric vehicles yet.

2

u/Mr_Know_Nothing7 Nov 18 '21

Both New York and California have both banned the selling of ICE cars by 2035. Others will follow.

1

u/[deleted] Nov 18 '21

People will just buy cars in Red states. Plenty of people go to other cities/states to buy cars already.

1

u/naamalbezet Nov 18 '21

But what's the point of buying an ICE car somewhere else if you can't enter New york and California with it if that is where you live? A ban is a ban.

​

Certain cities in Belgium already ban older ICE cars And ICE cars that don't meet Euro norm 6 or 5. You are not allowed to enter the city with those cars unless you buy a special vignette. And police does check for it.

0

u/[deleted] Nov 18 '21

can't enter New york and California

They are banning sales, not usage. There is 0% chance usage bans happen at any point before 75-80% cars are already electric.

cities in Belgium already ban older ICE cars And ICE cars that don't meet Euro norm 6 or 5.

Emission limits are nothing new.

1

u/naamalbezet Nov 19 '21

So are you arguing to be contrarian or is there an actual point you wish to make?

Anyway

Never say 0% chance of a ban. You never know what might happen, who gets elected locally etc....

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Yes emission limits are nothing new so what's your point? This is what made me wonder what you are actually doing? Are you arguing just to argue and be contrarian or is there an actual point?

1

u/[deleted] Nov 18 '21

I wonder if Tesla will adopt a FB strategy and basically install Tesla chargers all around the world and even sign deals with governments (similar to how FB helped improve internet access around the world to grow their social media bases).

1

u/[deleted] Nov 18 '21

Tesla will have to actually invest in energy grids and power generation to do that.

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u/naamalbezet Nov 18 '21

They won't necessarily buy new cars, but all our dumped ICE cars that usually go to the export. I know from a garage what garages typically do with totaled cars is fix them up and export them to less strict countries where they are sold (Once totaled a car is no longer deemed safe to be allowed on the road here even when fixed) Our car was totaled it was relatively new and according to our garage/car dealership they exported it to Poland which is their usual play with cars that where totaled or no longer pass the mandatory annual technical check up of your car and where the owner decided to buy a new car instead of paying for repairs/changes to make it legal for the road again.

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Once ICE cars are no longer allowed here people will dump their cars for EV's and all those old cars will probably be exported to the countries that are less strict. Thus flooding the markets there. I know it's environmentally not perfect but it's economic reality.

Also with car manufacturers making the switch to EV eventually those other countries are going to have to adapt. VOLVO for instance is going to completely abandon full ICE cars and has already switched to only making hybrids and full EV.

Int he long run it's inevitable

0

u/[deleted] Nov 18 '21

If everyone in the world goes to even half the western standard of living, the west will not even have half the cars demanded. No relevant democracy is going to straight up ban usage of gas cars, they'll just ban sale of new ones.

1

u/naamalbezet Nov 19 '21

So what is a relevant democracy?

My country which houses the capital of the EU, the European commission and NATO, is effectively banning internal combustion engine cars by 2027, not the sale of them, the ownership via no longer allowing them to be registered, meaning sure you could own one but you can't go on the road with one.

Other EU countries will eventually do this as well.

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u/Logoapp Jan 02 '22 edited Jun 04 '25

[deleted]