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Why Tesla is Worth 2 x Apple – $5tn

Last updated on November 16, 2021

There is a lot of people who think Tesla’s market cap at $2tn is excessive. Let me show you why we contend that just is not so.

Let’s look at the mobile phone market and AAPL in particular

Apple and the Mobile phone Industry

Total global sales$522 bn
Apple Gross Margin 202143%
Gross potential AAPL margin of Global Market in Multiplying the above$224bn
Apple Share of Market (2021) 15%
TechnologyMature
AAPL unit sales growthFlat
Market Share % growthDecreasing
CompetitionXiomi, and Generic

Now lets look at Tesla and the Auto market

Total global sales$2,500 bn
Tesla Gross Margin 202130%
Gross margin of Global Market in Multiplying the above$750bn
Assume Potential TSLA Share of Market 15%
Technologyearly
TSLA unit sale growthexplosive / manufacturing limited
CompetitionSlow sluggish encumbents

Other key differentiators

  • Tesla is still building new products
  • Solar
  • Tesla is innovating faster
    • Casting large parts of vehicles
  • Evolution into new areas
    • Car insurance
    • Robo Taxis
    • Trucks, vans and utilities

So I would suggest that Tesla should at least equal AAPL in market Cap and should easily be valued at Apples $2.5tn.

But the markets are much bigger in auto. Auto $market (margin) is 3 x Mobiles

I believe that customer loyalty is similar between AAPL and TSLA (both idolize their vendor with a religious zeal).

Some would contend that Elon Musk is a game changer, whereas Apple has not really innovated for 15 years since the first iPhone.

So – I see easy valuation for Tesla at 2 x APPL market cap and therefore $5tn.

These are only my personal views and not for trading advice see here

Disclosure : I do own TSLA shares and plan to buy more

Comments anyone?


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