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Tesla’s Valuation Surpasses Ford and GM Combined

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Tesla is Now Worth More than Ford and GM Combined

telsa gm ford valuation

Chart: Tesla is Worth More than Ford and GM Combined

Tesla has been on a roller coaster ride of market sentiment in recent years, but the electric car company is starting off the new decade on a high note.

The company is not only America’s most valuable automaker, it’s now worth more than Ford and GM combined.

tesla ford gm market caps

Tesla’s valuation has already surpassed the $100 billion mark – a significant milestone for a company that produces a fraction of the vehicles of its direct competitors.

Here’s a comparison of the top selling models in the U.S. for Ford, GM, and Tesla.

RankModelUnit Sales (Q4 2019)
1Ford F-Series233,952
2Chevrolet Silverado163,311
3Chevrolet Equinox92,092
4GMC Sierra68,722
5Ford Explorer51,284
6Ford Escape47,587
7Tesla Model 347,275
8Ford Edge37,621
9Ford Transit36,885
10Chevrolet Malibu34,314

A quick glance at this list is revealing. Though Tesla’s Model 3 put up strong sales numbers, it’s still only a small percentage of vehicles sold by U.S. automakers.

So, what’s driving Tesla’s meteoric growth, and is it sustainable? Below, we’ll take a high-level look at the bull and bear cases for the company.

The Bull Case for Tesla Motors

Tesla posted losses of $1.1 billion in the first half of 2019, but since then, the company has turned the situation around in dramatic fashion.

The automaker had a surprising third quarter with not only record deliveries of 97,000 cars, but also a profit of $143 million. Deliveries broke yet another record in Q4 2019, totaling 112,000 vehicles. These announcements helped improve market sentiment, sending the company’s stock back on an upward trajectory heading into 2020.

tesla bull quotes

Here are three reasons some analysts and media are still bullish on Tesla:

1. Tapping into the World’s Largest Electric Car Market

For a long time, foreign companies looking to manufacture products in China couldn’t do so without working through a domestic partner. Recently though, Tesla became the first major benefactor of a policy change, becoming the first wholly foreign-owned automaker in China.

Gigafactory 3 in Shanghai was completed in October, and was built in just 10 months – an impressive feat. Furthermore, cars have already begun rolling off the assembly lines, as Tesla targets an annual production of 150,000 Model 3s.

Perhaps the best part for a company with historically volatile earnings: Tesla claims the facility was 65% cheaper to build than its production plant in the U.S.

2. Still the Range King

2019 saw many of the more established automakers take their first swings at Tesla.

The United States Environmental Protection Agency (EPA) handed out official range ratings for several new electric cars, but none could unseat the king:

ev range ratings

3. Musk’s Megaphone

Few CEOs capture the attention of media quite like Elon Musk. While his actions can sometimes have unintended consequences for the company – the infamous “funding secured” tweet, for example – Elon Musk’s massive reach allows the company to sell vehicles without spending a dime on advertising.

By contrast, in 2018, Ford and GM spent $2.3 billion and $3.1 billion respectively on advertising in the U.S. alone.

The Bear Case for Tesla Motors

While the second half of 2019 has given Tesla bulls much to celebrate, many investors are remaining vigilant, if not skeptical.

tesla bear quotes

1. Stiff Competition in China

Tapping into the world’s largest EV market is a double-edged sword for Tesla, as they face an onslaught of domestic and foreign competitors.

The Chinese government has also generously supported its own EV industry, handing out over $60 billion in subsidies to over 400 companies. Tesla will be competing against state-owned enterprises like BAIC, one of the largest players in the Chinese EV market.

Western automakers are also gaining a foothold in China as well. Volkswagen and its Chinese joint-venture partner, SAIC Motor, will begin producing cars at two factories in China in the autumn of 2020.

The German automotive giant has also forged partnerships with Chinese battery manufacturers, including China’s biggest battery company Contemporary Amperex Technology (CATL).

2. Getting Ratio’d

Tesla has an extremely high premium on earnings when compared with its more established counterparts in the auto industry.

CompanyTickerEnterprise Multiple* (last 12 months)
ToyotaNYSE: TM8.4x
GMNYSE: GM10.0x
FordNYSE: F14.5x
TeslaNASDAQ: TSLA50.2x

The enterprise multiple (EV/EBITDA) measures the dollars in enterprise value for each dollar of earnings. The ratio is commonly used to determine if a company is undervalued or overvalued compared to peers.

The Bottom Line is… the Bottom Line

Of course, Tesla’s future will be dictated by variables more complex than can be summed up in a tidy pro/con list.

Musk has shown a willingness to sacrifice profitability in the name of growth – Tesla has yet to prove it can deliver consistent, quarterly profits.

It’s hard to be profitable with that level of growth. We could slow it down, but then that would not be good for sustainability and the cause of electric vehicles.

– Elon Musk

After reporting a record number of deliveries in the final quarter of 2019, there’s no doubt that true believers and short sellers alike will be watching the company’s January 29, 2020, earnings call with much anticipation.

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Technology

The World’s Tech Giants, Ranked by Brand Value

Tech giants and e-commerce brands are thriving—and running circles around less pandemic-proof brands.

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The World’s Tech Giants, Ranked by Brand Value

The pandemic has businesses everywhere on the ropes, with many firms filing for bankruptcy since lockdowns began. Despite the uncertainty, tech giants and major digital retail brands are still thriving—and some are running circles around those that are less pandemic-proof.

Using data from Kantar and Bloomberg, a recent brand report released by BrandZ shows which tech companies are proving their worth to consumers during COVID-19 chaos. With data covering almost 4 million consumers, BrandZ also reveals that the tech sector leads the world’s 100 most valued brands in terms of financial power and consumer sentiment.

Here’s how the top 20 tech brands from the report stack up:

RankCompanyBrand Value (2020)Change (%)
#1🇺🇸 Apple$352 billion+14%
#2🇺🇸 Microsoft$327 billion+30%
#3🇺🇸 Google$324 billion+5%
#4🇨🇳 Tencent$151 billion+15%
#5🇺🇸 Facebook$147 billion-7%
#6🇺🇸 IBM$84 billion-3%
#7🇩🇪 SAP$58 billion0%
#8🇺🇸 Instagram$42 billion+47%
#9🇺🇸 Accenture$41 billion+6%
#10🇺🇸 Intel$37 billion+17%
#11🇺🇸 Adobe$36 billion+29%
#12🇰🇷 Samsung$33 billion+7%
#13🇺🇸 Salesforce$30 billion+13%
#14🇺🇸 LinkedIn$30 billion+31%
#15🇨🇳 Huawei$29 billion+9%
#16🇺🇸 Oracle$27 billion+2%
#17🇺🇸 Cisco$26 billion-9%
#18🇺🇸 Dell$18 billion-2%
#19🇨🇳 Xiaomi$17 billion-16%
#20🇨🇳 Baidu$15 billion-29%

Out of the top five tech brands, Microsoft made the biggest moves with 30% brand value growth. Other big movers in the top 20 were Instagram (owned by Facebook), Adobe, and LinkedIn (owned by Microsoft), rising 47%, 29%, and 31%, respectively.

Broken down by nation, U.S. brands are dominating tech’s heavy hitters, claiming 14 of the world’s top 20 tech brands. Chinese brands round out much of the remaining top 20, including tech entertainment and social media giant Tencent, which rose 15% in brand value since 2019.

Big Tech’s Heavyweights

Tech’s top brands are raking in billions of dollars, capturing consumer mindshare, captivating people, and comforting them during volatile months. Apple, Microsoft, Google, Tencent, and Facebook—tech’s leading contingent—have made those moves look easy during what are rough times for many world brands. 

While most tech brands in the upper half of the top 20 saw significant increases in brand value, only Facebook and IBM were in decline from 2019, at -7% and -3% respectively. The biggest loss in tech’s top 20 came from China’s Baidu, which fell by -29% in 2020.

Waning consumer trust, thanks in part to the perceived misuse of personal data, is a gap that tech’s popularity alone won’t fill forever. (Following the Cambridge Analytica scandal, nearly 25% of Facebook account holders reported being “extremely” or “very” concerned about their personal data.)

Pandemic-Proof Applications

Coming in at eighth place, Facebook-owned Instagram gained 47% in brand value—a huge percentage, but less than the whopping 95% growth it had in 2019.

On the whole, digital apps have been faring well during the pandemic, especially those built for entertainment, shopping, social connection, and delivery.

These brands had anticipated, even invented, the online-offline dynamics of modern life that became indispensable for survival during the lockdown homebound weeks of avoiding the contagion. 

— BrandZ 2020 Global Top 100 Report

Top Brands, by Category

While the brand value growth rates of tech giants aren’t entirely immune to the effects of COVID-19, the likes of Apple, Microsoft, and Google are growing steadily, surpassed only by e-commerce leader Amazon. 

With data collected into April 2020, BrandZ’s report on the world’s top 100 brands reflects multiple shifting needs and consumer concerns at a categorical scale. 

While consumer affinity for e-commerce and social media brands has increased, fast food and beer brands took a hit, despite reports of increased alcohol consumption and food delivery during lockdown. It would seem then, that consumers have been valuing their tools and means of consumption.

Of the report’s 14 brand categories, only six increased in value, mostly by less than 5%. Of the top risers, six were tech brands and six were mainly e-commerce. 

Other upwardly mobile brands were those in the apparel and personal care categories. Much like retail, those categories had an increasing reliance on technology to deliver their products. 

The above chart shows overall categorical changes for 2020 led by retail, tech, and insurance. In the opposite corner, energy, and bank brands took the biggest hits.

Rolling with the Punches

The economic impacts of COVID-19 are undeniable. Even still, BrandZ’s top 100 brands marked a steady increase of 6% in value in 2020, compared to 7% the previous year.

This pandemic has offered up era-defining change, with tech and e-commerce seizing the day. But in a climate where nothing can be taken for granted, brands large and small are still taking their knocks.

For now, the brands that are embraced by consumers will be those that can apply a salve to the blows that 2020 keeps delivering. 

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Connected Workers: How Digital Transformation is Shaping Industry’s Future

This graphic explores the role connected workers play in achieving successful digital transformation and identifying new growth opportnities.

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Connected Workers: Shaping the Future of Industry

Digital transformation has upended businesses on a global scale, and no industry is immune from its powerful effects.

New technologies and enhancing customer experience are key drivers for companies investing in digital transformation, but the most important reason for prioritizing this shift is that it will allow them to leverage entirely new opportunities for growth.

However, with the speed of digital transformation accelerating at a furious pace, companies need to quickly adapt their working environment to keep up. This graphic from mCloud unearths the origins of the connected worker, and explores the potential applications of connected devices across industries.

The Rise of the Connected Worker

The mass adoption of smart devices has sparked a new wave of remote work. This type of working arrangement is estimated to inject $441 billion into the global economy every year, and save 2.5 million metric tonnes of CO2 by 2029—the equivalent of 1,280 flights between New York and London.

However, flexible or remote working looks different depending on the industry. For example, in the context of business services such as engineering or manufacturing, employees who carry out different tasks remotely using digital technologies are known as connected workers.

The term is not a one-size-fits-all, as there are many different types of connected workers with different roles, such as operators, field workers, engineers, and even executives. But regardless of an individual’s title, every connected worker plays a crucial role in achieving digital transformation.

Real Time Data, Real Time Benefits

When workers are connected to assets in real time, they can make better, more informed decisions—ultimately becoming a more efficient workforce overall. As a result, industries could unlock a wealth of benefits, such as:

  • Reducing human error
  • Increasing productivity
  • Reducing dangerous incidents
  • Saving time and money
  • Monitoring assets 24/7

While connected workers can enhance the potential of industries, the tools they use to achieve these benefits are crucial to their success.

Connected Worker Technologies

A connected device has the ability to connect with other devices and systems through the internet. The connected worker device market is set for rapid growth over the next two decades, reaching $4.3 billion by 2039. Industries such as oil and gas, chemical production, and construction lead the way in the adoption of connected worker technologies, which include:

  • Platforms: Hardware or software that uses artificial intelligence and data to allow engineers to create bespoke applications and control manufacturing processes remotely.
  • Interfaces: Technologies such as 3D digital twins enable peer-to-peer information sharing. They also create an immersive reflection of surroundings that would have otherwise been inaccessible by workers, such as wind turbine blades.
  • Smart sensors and IoT devices: Sensors that monitor assets provide a more holistic overview of industrial processes in real time and prevent dangerous incidents.
  • Cloud and edge computing: Using the cloud allows workers to communicate with each other and manage shared data more efficiently.

Over time, connected devices are getting smarter and expanding their capabilities. Moreover, devices such as wearables are becoming more discreet than ever, and can even be embedded into personal protective equipment to gather data while remaining unobtrusive.

Real World Applications

With seemingly endless potential, these devices have the ability to provide game changing solutions to ongoing challenges across dozens of industries.

  • Building Maintenance and Management
    Facility managers can access real time information and connect with maintenance workers on site to resolve issues quickly. Building personnel can also access documentation and remote help through connected technologies.
  • Task Management
    Operators in industrial settings such as mining can control activities in remote locations. They can also enable field personnel to connect with experts in other locations.
  • Communications Platform
    Cloud-based communication platforms can provide healthcare practitioners with a tool to connect with the patient, the patient’s family and emergency care personnel.

By harnessing the power of artificial intelligence, the Internet of Things, and analytics, connected workers can continue to revolutionize businesses and industries across the globe.

Towards a More Connected Future

As companies navigate the challenges of COVID-19, implementing connected worker technologies and creating a data-driven work environment may quickly become an increasingly important priority.

Not only is digital transformation important for leveraging new growth opportunities to scale, it may be crucial for determining the future of certain businesses and industries.

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