Volkswagen CEO Dares To Say What Others Won't, "Tesla Is Not Niche"

There appears to be a budding friendship between the CEOs of Volkswagen Group and Tesla, the electric-car company suddenly back on the ascent.

At an event where VW was presenting the new Golf hatchback Thursday, CEO Herbert Diess quibbled with reporters who suggested Tesla is in trouble because it's too small.

"Tesla is not niche," Diess said in Wolfsburg, Germany, where VW is based. "The Model 3 is a large-series model and they are one of the biggest manufacturers of electric-car batteries."

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SanJoseDriver - 10/25/2019 5:37:19 PM

-4 Boost

By market cap, Tesla is again the most valuable US auto company.

MDarringer - 10/25/2019 6:35:53 PM

+4 Boost

Market cap is also a massive crapshoot/gamble rather than a real value.

SanJoseDriver - 10/27/2019 2:49:05 AM

-1 Boost

Perhaps, still a notable accomplishment.

MDarringer - 10/25/2019 6:27:29 PM

+1 Boost

VW will probably buy Tesla. Tesla is niche because EV technology is far from perfected, hence its limited sales.

mre30 - 10/25/2019 7:49:34 PM

+9 Boost

Over time, companies are valued based on their EBITDA and profit multiples.

Tesla is still (10+ years!!!!) in the honeymoon phase where markets price in "future opportunity". I'm glad for all the Tesla "atta-boys" and backslapping but the fact of the matter is...

"On Oct. 23, Tesla reported a surprise profit for the third quarter of 2019.
The profit was largely attributed to efficiency gains and cost reductions, but the scale of the sequential change looks improbable. A deeper dive into the financials shows that the profit came thanks to a mix of deferred revenue recognition, elevated regulatory credit sales, throttled-back capex, and stretched payables. Tesla showed year-over-year declines to auto margins, revenues, and net income; that is not a healthy trend for a company priced for growth. It appears that Tesla pulled out all the stops to engineer a profitable quarter, but the underlying problems facing the business remain; sustainable profitability remains very much in doubt." Seeking Alpha.

Spend some time reading the earnings report (not many people do these days) rather than simply being self-congratulatory.

SanJoseDriver - 10/25/2019 9:28:29 PM

-6 Boost

Deferred revenue was like $30M from FSD sales. Cash increased to over $5B, they're in pretty good shape to continue their rampage.

Section_31_JTK - 10/25/2019 8:53:36 PM

+8 Boost

Tesla's P&L looks like crap when you dive into it. If it were not for the accounting trickery noted above, the company would still be losing money.

SanJoseDriver - 10/25/2019 9:29:26 PM

-5 Boost

The "trickery" mostly involved massive cuts in spending and COGS, think that was a smart thing to do.

runninglogan1 - 10/25/2019 11:23:51 PM

-4 Boost

Diess knows what he's talking about. Time to play nice with Tesla.

valhallakey - 10/26/2019 2:16:44 AM

-3 Boost

I guess I will believe VW over the experts here.

carloslassiter - 10/26/2019 8:19:21 AM

-4 Boost

I remember about 12 months ago when people here were fawning over the Kia Stinger and predicting Tesla's imminent bankruptcy.

CANADIANCOMMENTS - 10/27/2019 1:41:26 PM

+1 Boost

Interestingly enough the most common new BEV in my area is now the e-Golf. I have seen at least 5 in the last week.

SanJoseDriver - 10/28/2019 4:39:33 AM

-1 Boost

There are two in the parking lot at the office, it's one of the cheapest EVs you can get... not a bad beater car. At one point you could get a lease for $40/mo with only a couple grand down.

SanJoseDriver - 10/28/2019 9:13:06 PM

+1 Boost

The interior on the 3 is far better than the Golf or the Bolt (also have a few of those in the parking lot). I don't think there is a single sane person that would say otherwise after sitting in all 3.