Apple builds cars, Tesla bubble is about to burst?

Its first electric car, AppleCar, has reportedly completed the prototype car assembly and will be released in September 2021. The new generation of Apple cars will be equipped with self-developed battery technology, which is smaller, safer, and disruptive “just like the iPhone of the year.”

Two days after the news came out, Apple’s market value increased by 88.8 billion U.S. dollars. And Tesla, known as the “iPhone on Wheels”, lost 7.86% of its share price in two days, evaporating $51.8 billion in market value. Apple’s entry into the auto market, did it happen that Tesla burst the “biggest bubble in 100 years”?

Tesla’s “blow bubbles” signs have been around for a long time.

2020 can be described as the “year of the gods” that Tesla Capital dreams of. At the beginning of the year, Tesla’s Shanghai Gigafactory delivered its domestic Model 3 to the public for the first time. With Musk’s devil dance steps, the Chinese market is fully opened. During the year, Tesla’s sales in China increased to more than 100, which is nearly three times the number of previous stores.

Driven by the “China boom”, Tesla’s market value went from 100 billion U.S. dollars at the beginning of the year to 600 billion U.S. dollars for the first time on December 7, surpassing Toyota, Volkswagen, Nissan, Hyundai, GM, Ford, Honda, and Fiat. The combined market value of the world’s nine largest automakers, including Chrysler and Peugeot.

Under the light of prosperity, Tesla’s “ordinary” financial data and difficult to continue to broaden its sales prospects.

In the third quarter of 2020, Tesla’s total revenue was US$8.771 billion, a year-on-year increase of 39%, and its net profit was US$143 million. It has achieved 5 consecutive quarters of profitability. With major valuation indicators significantly higher than the industry average, Tesla’s profit margin is basically the same as that of other companies in the industry, which means that its profit growth rate is far from supporting the current valuation, and the market seems to be over-excited. .

In addition, Musk said in an email to employees earlier that Tesla is promoting year-end delivery, and the goal is to deliver 500,000 vehicles in 2020. This figure only accounts for less than 1% of total global car sales, and even a fraction of Toyota’s 10.74 million sales in 2019. However, Tesla’s market value is far behind Toyota, reaching twice as much as Toyota’s. In the long run, it is not easy for Tesla to expand its market share.

U.S. investment research firm Research Affiliates partner Vitaly Kalesnik said that taking into account Tesla’s production and sales data and other fundamental factors, Tesla’s current stock price is already in the bubble zone. After the news of Apple building a car, some analysts even said that this may be the most terrifying pessimistic situation for Tesla’s stock price.

Although Apple has not yet confirmed the rumors of successful car manufacturing, with Apple’s ecosystem, industry chain voice and hardware design expertise, once Apple cars enter the market, it will definitely bring revolutionary changes to the automotive industry.

In addition to Apple, Waymo, Google’s self-driving project, as the king of unicorns, has also brought a catfish effect to the industry, but has not directly touched Tesla’s cheese. Now that Apple wants to build another iPhone, and Tesla wants to be an “Apple in the automotive industry,” it is only a matter of time before the two are facing each other.