Tesla Now Worth More Than American Express, Bank of America As Musk Approaches Huge Salary
Hello and welcome to Speed Lines, The Drive Morning overview of what matters in the world of cars and transport. On the agenda this morning: Tesla’s insane valuation, Hyundai and Kia are planning their own electric vehicle blitz, and General Motors must transfer workers due to COVID-19 shortages.
This may not even be Elon Musk’s final form
One of the few bright spots in the coronavirus-plagued auto industry in 2020 is the incomprehensible surge in Tesla’s share price. As mainstream automakers struggle to get Wall Street to notice them as they dip their toes into the electric vehicle game, Tesla has had two strong quarters so far – and a valuation that has risen so far. made the company worth more than Volkswagen, GM, Honda, Fiat Chrysler and Ford combined.
In fact, like The Wall Street Journal reports, Tesla is now, in a way, bigger than several financial titans, retail chains, and healthcare providers:
How big is Tesla? Tesla’s recent surge puts its market value about $ 286 billion above that of Home Depot Inc., Intel Corp. and UnitedHealth Group Inc. The electric car maker is also bigger than Bank of America Corp. and American Express Co. combined, according to FactSet Data.
[…] If it were in the S&P 500, it would be the 13th company in the index, slightly behind JPMorgan Chase & Co., which has a market value of approximately $ 298 billion. During the day, it was on track to close in the top 10 US companies by market cap for the first time on record. It ended up losing $ 47.59, or 3.1%, to $ 1,497.06.
What is driving this? Several things. Stock prices, of course, are bets on the future, and investors are betting heavily on electric vehicles. For now and probably for the foreseeable future, Tesla is the clear leader of this world. Investors are also very bullish on Tesla’s earnings report due next week, three consecutive profitable quarters and a possible upcoming inclusion in the S&P 500. That’s priced at 6,348 times its 2019 results.
And as CNN notes, this could amount to an even bigger payout for CEO Elon Musk:
Even more massive pay days may lie ahead. For Musk to access the third block of stock options, Tesla must maintain a market value above $ 200 billion over the six months and meet the next set of operational goals in four consecutive quarters – or sales exceeding $ 30 billion or $ 3 billion in profits, before interest, taxes and depreciation.
But I understand the cognitive dissonance at work here. How can you not? Tesla is a company that still struggling with production issues and has not yet made an annual profit. It might have a bigger market cap than either Toyota or VW now, but it’s still a bit of a player in terms of production. And now it’s “bigger” than some established companies in the midst of a really dismal economy when the only people who seem optimistic about anything are Wall Street investors.
There have been have been talking about a tech market bubble for years now. Perhaps the next big bubble is in electric vehicle stocks, especially if startups and small players cannot unite and become stable, profitable automakers. But electrification is absolutely the way forward for the auto industry. And investors have made it clear that they hope to cash in hard when that happens.
Hyundai and Kia’s Big EV Push
Of course, Tesla and startups aren’t alone when it comes to electric vehicles. All car manufacturers are pushing it hard, even if some strategies are clearer than others. GM and VW are two of the most ambitious to date.
You may soon be able to count Hyundai Motor Group in this crowd. The conglomerate’s executive vice president Euisun Chung said on Tuesday that the goal is now to sell 1 million electric vehicles by 2025 – and that is in, and not through– because it targets 10% of the world market share of electric vehicles.
According to Reuters, which also comes with great support from the South Korean government:
Hyundai Motor plans to release a next-generation electric vehicle with a range of 280 miles per charge and a charge time of 20 minutes or less, Chung said in a televised video message. It aims to export 1,600 hydrogen trucks to Europe by 2025 and develop a new system that doubles battery life at half the price, he said.
Chung’s statement came as South Korea on Tuesday presented a plan to spend 114.1 trillion won ($ 94.6 billion) on a “New Deal” to create jobs and help the economy grow. recover from the fallout from the coronavirus, anchored in part by investments in electric vehicles and hydrogen cars.
The six-year plan will build a digital infrastructure and a stronger safety net for job seekers, but its “Green New Deal” aspects have drawn attention as they aim to reduce heavy reliance on fossil fuels in the fourth. Asian economy.
With South Korea increasingly dominating the electronics space, it will also be a player to watch in the electric vehicle sector.
GM must transfer workers because they are “everyone on the bridge”
As we covered on Speed Lines yesterday, GM has a big absenteeism problem in some of its most crucial factories. The automaker needs its trucks built, but workers don’t want to come to work because they are afraid of being infected with COVID-19.
Today the Detroit Free Press reports more on the situation, including the managers on the line building the trucks – “something that should never be” for union reasons – all on the bridge to get the trucks out. Now some factories are transferring laid-off workers from other factories to do the job as well:
To alleviate the problem, GM told union leaders at Flint Assembly, Fort Wayne Assembly and Arlington Assembly in Texas that it would add hundreds of permanent workers to factories, some from early August. These will not be new hires, but rather laid-off GM workers in other factories who will have the option of being transferred permanently to one of the truck facilities.
“It’s no secret that we have folks laid off from Detroit-Hamtramck and coming to Spring Hill, so it makes sense to beef up our workforce in the major heavy truck and SUV factories,” another familiar person said. with the situation but who asked not to be named as they are not allowed to share this with the media.