wifeisafurd said:I agree that BYD takes a hit from the political environment, as does Tesla. But BYD's market valuation is just crap for the largest seller of EVs in the world, and from everything I hear they make a decent car for the price. Just so we are clear, BYD has a market capitalization of $16 Billion and Tesla is at $790 Billion currently, BYD has has a meager run-up in valuation lately, after falling down when Buffet left. BYD is never gong to compete in the luxury EV market, but why should investors care? The EV luxury market already is saturated with competition. For whatever reason, investors are just down on EV companies, and I'm not sure why, but it is not just Tesla (and based on Tesla's profits, you would think Tesla still is overvalued without some other factors at play).Cal88 said:wifeisafurd said:concordtom said:
BYD Tang hybrid
$24,500
700 mile range.
In the world of stupid off-topic posts, this post may be a winner.
Gee Tom, BTD stock, and stocks of Tesla's stick should be sky rocketing. Right? Taking advantage of the Tessal "collapse" in stock price that has you calling for Musk to be fired.
Well major investor Warren Buffett dumped BYD stock and its market valuation tanked. Nice post. Tesla stock may have been overvalued as it is losing post-election gains after Musk backed Trump (not sure why rational investors did this), but still is in positive ground for the year, and Musk also is creating brand hostility, which is a long term problem. But it looks like the market is pretty bearish on electric car makers and a lot of this may be investors taking a closer look at electric car makers that seem to only survive by being propped up by government support. Tom, for a couple dollars you can buy a share of Lucid stock if you want to lose some money. Tesla seems more a technology company than a car company (just try the unique service experience), but Tesla's continuing high value is based on robotaxis and robots it hasn't yet produced, not the sales of EV cars. The market seems to backing away from investing in EV car makers.
This view is outdated, I used to believe that too. The EV and related battery product cycle is still in its early phases, constant technological improvements and intense competition are propelling the EV market ahead of the ICE market.
Here are the main reasons EVs are starting to replace ICE cars in open markets like Australia, Brazil, Mexico etc:
- Lower price for the equivalent auto/truck
- Better performance
- Comparable ranges in new models, potentially longer ranges in future ones
- Lower energy costs (zero variable costs if you have solar panels)
- Lower maintenance costs (fewer moving parts)
- Silent, smoother operation
- No pollution
I think part of the reason Buffet sold off his BYD stake is due to the current political climate of decoupling with China, and his assessment of future further deterioration in Sino-American relations, rather than a pure business decision.
Others' arguments here that I'm repeating:
Chinese population doesn't invest in stocks the way the West do.
Westerners can't buy direct A shares, so there is not a direct line from investors to Chinese companies, while an overabundance of dollars go to USA based shares.
I come from the index profession where I was trained to believe in EMM. But lately I'm understanding differently. David Swenson puts forth rationale and historical examples for how EMM is utter nonsense. Animal Spirits, and in Irrational Exuberance he explains structural reasons for it, too (as given above -My first paragraph above talks to that - too few, too many, dollars chasing/setting valuations, they do not equate), so it's wrong for you to base your analysis of which product is more competitive based on mcap.
You think investors are down on EV's. Is that because of… what exactly? I'll guess:
Charge times.
Charge locations.
Batteries lifespan.
What if I told you that all 3 of those would be addressed and resolved, soon. Then would ICE cars be dead?
It's coming, my friend. And we've covered it here before.
