Nina's Blog - Thursday 29th January 2026

@22Michelle You may well be right though I think Elon Musk is more likely to fail over his space ventures; but AI might yet prove another "bubble".

If his car-making slides too much he might simply sell it to another manufacturer.

@ArishMell My question is can Musk / Tesla actually make a profit or is it one investment / billionaire parking space after another?

@22Michelle I am not a stock-market analyst but I think you are right that it is too much a billionaire's gamble for its own good.

@22Michelle Tesla was doing fine until Musk decided that actually running a mature company was no fun. But there is another way of looking at it: Musk at or near the beginning of Tesla's time as a make of mass market cars said that the purpose was to accelerate the adoption of EVs and that this was his specific goal ahead of actually making money.

In this sense I think it is reasonable to say that he has succeeded and that Tesla made sense. It is also reasonable to say that now that the goal has been achieved that Tesla as a car company is no longer necessary because, at least outside the US, pretty much every other car make is now making EVs a large part, or the largest part, of their production. Toyota is the odd one out of the big car makers but even BMW has embraced EVs now (although they seem to be having trouble selling them).

As for the stock market valuation of the company, well that's just what stock markets do. the company is in fact still profitable it just isn't as profitable as it was and stock markets react to change not stability.

Tesla sold 1.6 million cars with 3.8 billion USD profit last year, VW sold 2.1 million vehicles with a sales revenue of 78 billion Euro, and a 2.9 billion Euro operating result.

So I think it is still a viable car maker for the moment but it's product range is too small to compete with VW and Toyota in the very long run. Still there are plenty of car manufacturers that are much smaller than those two that keep going for decades, BMW for instance.

@ArishMell The gamble is will billionaires continue to park their money in the Tesla company. As long as they do Tesla remains worth hundreds of billions, but is there any real value (like Gold) that equals those hundreds of billions?

@22Michelle That question surely applies to any other car manufacturing company. The physical assets of BMW for instance are simply the production lines and the land they sit on, the technology is worth very little now that ICE vehicles are outmoded and electric drive trains are commodities.

All the European and Japanese car makers are at risk of being outcompeted by more agile Korean and Chinese makers. General Motors and Ford will survive longer in their home markets simply because of their size and its insularity.

The stock market valuation of a company has very little to do with its actual value and very little of that money is actually an investment in the company.

@ninalanyon My question is if you look at what would a company be worth if sold, and the traditional estimate was about 10-12 times annual profit. Anything above that was based on a guess, a gamble that the company profits will increase. If they don't your investment should be a loser. However, this no longer seems to hold true. Tesla is supposed to value at $1.4 trillion, so are their profits in the region of $140-150 billion?

@ninalanyon Yes, of course it applies to all other car companies. VW is valued at around EU57.5 billion with profits around EU3. Billion. Now even that is around 20 times annual profit. These company values seem to resemble South Sea Bubbles.

@22Michelle Tesla's stock market valuation has been absurd almost from the beginning. Personally I think it has less to do with Tesla itself than the times we live in. It's much easier to talk up the value of a company that is dealing in something that has not been done before than in one that has been doing essentially the same thing for a hundred years. And as you mentioned perhaps it just functions as a place to park the billionaires' ill gotten gains; so long as they can convince others to join in then perhaps when it all goes south they might be able to divest themselves of the stocks fast enough to even make a slight profit. And while continues going up the big players can simply slowly sell off shares at a profit and at the expense of the smaller latecomers.

I wonder if the early railway companies in the US experienced anything similar?

@ninalanyon Yes, whatever the car, rocket, robot, etc being produced just don't invest in it, unless you can accept losses in hundreds of millions, possibly billions.