Tesla vs VW, BMW and Daimler – competition of auto stocks


With its factory plans in Germany, Tesla puts the local car industry in the shade – just like last on the stock market. But investors take a risky bet on the e-car pioneer from the USA.

The coup was successful: Tesla boss Elon Musk emerged completely unexpectedly this week in Berlin and announced that he wanted to build the long-awaited European production facility of his company in Germany, more precisely in Brandenburg near the capital. In one fell swoop, the electric car maker from California was again in the spotlight. The domestic automaker Volkswagen Show stock market chart, Daimler Show stock market chart and BMW Show stock market chart on the other hand, reporting on the event usually did not go very well.

The same thing recently happened on the stock market: the stock of Tesla Show stock market chart put down a months-long descent until the summer. Since then, however, it is up, and with the gratifying business figures, the CEO Musk announced in late October, the paper began to a veritable high. The shares of the local automakers also left Tesla clearly behind: on the one-month horizon, the American gained more than 30 percent, while Volkswagen, BMW and Daimler posted price gains of less than 10 percent in the generally favorable stock market environment.

As far as the snapshot. But what about it? Did Tesla really make the turn for the better with the recent quarterly profit? Will the Americans outnumber the rest of the industry in terms of modern mobility, as it seemed this week? And what does the situation look like from the point of view of the shareholders of the electric car pioneer?

360,000 cars in 2019: Tesla's goals remain very ambitious

Skepticism is appropriate. One year ago, Tesla boss Musk presented his shareholders a quarterly profit – but the joy did not last long. Since then, the company has again accumulated heavy losses. Although recent business figures show that Tesla has significantly reduced its production costs. Not least in connection with the beginning of car production in the new factory in Shanghai and the construction of the announced plant in Brandenburg, however, high expenditures on the company. And whether Tesla will reach the target of 360,000 deliveries this year, according to analysts, despite the good figures from the third quarter is far from settled.

On the other hand, the situation of the local carmaker, however, is also rather mau. Although both Volkswagen and BMW and Daimler were able to present quite pleasing business results for the third quarter. However, year-on-year comparisons are somewhat biased across all three manufacturers, as businesses across the industry in the second half of 2018 were weighed down by the problems with the new emissions test WLTP.

Looking ahead, there is also little reason for exuberant optimism: The US-Chinese trade conflict is still smoldering, Britain's exit from the EU is still unclear, and economic concerns are far from out of the question. All this burdens the business of global carmakers, whose production has been going down for more than a year.

Competition of unequal opponents

That being said, the much-discussed struggle between Tesla and the rest of the auto industry is already a battle between unequal adversaries. On the one hand, there is the young, growth-oriented, but at the same time still altogether unprofitable company from California, and on the other the pandemonium of long-established large corporations, each of which sells many times more cars than the Americans, correspondingly much larger sales makes and, of course, regularly billions in profits.

A look at the numbers makes this discrepancy clear: The much acclaimed profit that Tesla achieved in the third quarter of 2019 was $ 143 million (€ 128 million). In contrast, the Wolfsburg Volkswagen Group achieved an operating profit of 4.5 billion euros in the same period. At BMW and Daimler, too, the profit for the three months was in the 10-digit range.

Tesla worth much more than Daimler or BMW

It seems all the more remarkable that Tesla seems to be in league with the big names in the auto industry. Time and again, the stock market value of the company is cited, which is currently about 63 billion dollars (57 billion euros). For comparison: Daimler currently comes to a market value of around 54 billion euros, at BMW, it is even less than 50 billion euros. Even the huge Volkswagen Group is worth in the eyes of investors with around 90 billion euros, not twice as much as Tesla.

Automanager among themselves: BMW CEO Oliver Zipse, Tesla CEO Elon Musk and Volkswagen CEO Herbert Diess this week in Berlin (from left to right).


Automanager among themselves: BMW CEO Oliver Zipse, Tesla CEO Elon Musk and Volkswagen CEO Herbert Diess this week in Berlin (from left to right).

The reason for this apparent imbalance lies in the well-known fact that not facts are traded on the stock market, but expectations. Or hopes. In other words, Tesla may seem overvalued in terms of his current business situation. However, investors appear to expect that the Group will justify this price in the coming months and years with success.

Tesla's stock price reflects a bet on the future, a high-stakes bet with a correspondingly high risk. How much investors play with the electric car maker with the fire, for example, shows the KPV, the ratio of the share price to the profit of a company. The higher this P / E ratio, the higher the stock price in relation to the company's profit – the more investors expect from the company in the future.

The P / E ratio of BMW and Volkswagen is currently less than ten, which puts it in a relatively moderate range. At Daimler, however, the value is already considerably higher at around 20, so investors are apparently now more in the mood for the Stuttgart companies.

Christoph Rottwilm on Twitter

For Tesla can hardly calculate a P / E in the current year, because a profit for the year seems not currently foreseeable. In the coming year, for example, the analysts of DZ Bank estimate the possible P / E ratio of Tesla at more than 47. The research company Refinitv even comes to a value of around 65. This is more than three times the current Daimler P / E.

The price-to-book ratio (KBV), another measure that compares business valuations, is currently about ten times higher than other auto companies. Investors should pay close attention to these numbers. Because they are clear evidence of the high investment risk associated with the Tesla share at the current price level.

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