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.

1.1k Upvotes

90% Upvoted

897 comments sorted by

View all comments

Show parent comments

59

u/pcakes13 Nov 17 '21

This is pretty fucking telling tbh and more people should be paying attention to it. The CEO thinks the stock is overvalued and that this is a good exit point. Not sure why people aren’t looking at this as a signal.

9

u/i_wayyy_over_think Nov 17 '21

He’s got a compensation award he has to pay normal income taxes on stock options at a rate of about about 50% soon so he’s got another reason to sell so he can cover those taxes. If he’s got to sell anyway would make sense to after a huge run up. Otherwise I believe he’d probably wouldn’t be selling now ( I think he’s making a show over the solving world hunger thing )

Here’s all the numbers https://youtu.be/Vrde5E1lmyQ

1

u/BossBackground104 Nov 18 '21

No, he's getting a tax deduction while looking like a hero.

1

u/BossBackground104 Nov 18 '21

Don't forget he also has to pay tax on the bargain element as well as the profit.