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Issue link: https://digital.macdirectory.com/i/1339792
This should give pause. One wonders what would happen if Japan followed Europe in providing incentives for EVs in the “JDM” market. Japan and “Other” countries aside, there was growth. But much remains to be done. The overall industry is far larger, as shown in the following graph. Nevertheless, optimism abounds. With an increase in market capitalization of about 648%, Tesla is now the most valuable automaker in the world. Tesla, the champion EV maker has taken 17 years to reach 0.65% market share.Actually, as the graph shows above, Tesla is now almost as valuable as the entire auto industry was a year earlier. But the rest of the industry did not collapse. The top 24 companies (i.e. apart from Tesla) increased their market capitalization from $901 billion to $1266 billion during 2020. That’s a 40% increase during a year when sales fell by 15%. Quite an achievement. Overall the market capitalization of the top 25 automakers more than doubled from $1.0 to $2.1 trillion. This begs many questions, mainly, how would such profits ever be generated. To put a finer point on it, if we divide the market capitalization by units produced we get a figure of value that allows a historic perspective. Historically car companies were valued at $8,000/yr. 2019’s value was about $10,000 which makes sense given some inflation. But the drop in volumes coupled to increase in valuation brought the ex-Tesla cap/unit to an eye-watering $16,400, a 64% increase in one year. Tesla’s valuation is on a different level. It went from $291,361 to over $1.6 million/car sold. Roughly this is 100x rest of industry.