Tesla Now Worth More Than American Express, Bank of America as Musk Approaches Huge Payday

Wall Street thinks EV stocks are the next big thing. Just ask them.

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Tesla Now Worth More Than American Express, Bank of America as Musk Approaches Huge Payday © Tesla Now Worth More Than American Express, Bank of America as Musk Approaches Huge Payday

Good morning and welcome back to Speed Lines, The Drive's morning roundup of what matters in the world of cars and transportation. On the docket this morning: Tesla's crazy valuation, Hyundai and Kia plan their own EV blitz, and General Motors has to transfer workers over COVID-19 shortages.

This May Not Even Be Elon Musk's Final Form

One of the few bright spots in the coronavirus-beset auto industry in 2020 is Tesla's incomprehensibly skyrocketing stock price. As legacy automakers struggle to get Wall Street to notice them as they dip their toes into the electric vehicle game, Tesla has managed two solid quarters so far—and a valuation that's risen so far it has made the company worth more than Volkswagen, GM, Honda, Fiat Chrysler and Ford combined.

In fact, as The Wall Street Journal reports, Tesla is now, somehow, bigger than several financial titans, retail chains and health care providers:

What's driving this? Several things. Stock prices, obviously, are bets on the future, and investors are going big on electric vehicles. For now and probably for the foreseeable future, Tesla's the clear leader in that world. Investors are also extra bullish over Tesla's earnings report due out next week, three consecutive profitable quarters and possible inclusion in the S&P 500 soon. It's priced at 6,348 times its 2019 earnings. 

And as CNN notes, it could equate to an even bigger payout for CEO Elon Musk:

But I get the cognitive dissonance at work here. How can you not? Tesla is a company that still struggles with production issues and has yet to turn an annual profit. It may have a bigger market capitalization than Toyota or VW now, but it's still a bit player in terms of production. And now it's "bigger" than some established firms amid a truly dismal economy when the only people who seem optimistic about anything are Wall Street investors.

There's been talk of a tech stock bubble for years now. Perhaps the next big bubble is EV stocks, especially if the startups and smaller players can't get it together and become stable, profitable car companies. But electrification is absolutely the way the auto industry is going. And investors have made clear they hope to cash in hard when as that happens. 

Hyundai And Kia's Big EV Push

Of course, Tesla and the startups aren't alone in the EV arena. Every automaker is pushing hard there, even if some strategies are more clear than others. GM and VW are two of the most ambitious to date. 

You may soon be able to count Hyundai Motor Group in that crowd. The conglomerate's executive vice chairman, Euisun Chung, said Tuesday that the goal is now to sell 1 million electric vehicles in 2025—and that's in, and not by—as it seeks 10 percent of global EV market share.

According to Reuters, that comes with a big push of support by the South Korean government as well:

With South Korea increasingly dominating the electronics space, it's going to be a player to watch in the EV sector as well.

GM Has To Transfer Workers As It's 'All Hands On Deck' 

As we covered on Speed Lines yesterday, GM has a big problem with absenteeism at some of its most crucial plants. The automaker needs its trucks built, but workers don't want to come to work because they're terrified of getting infected with COVID-19. 

Today, the Detroit Free Press reports more on the situation, including managers on the line building trucks—"something that should never be" for union reasons—all hands on deck to get the trucks out. Now some plants are transferring in laid-off workers from other plants to get the job done too:

The degree to which this will destabilize car production moving forward can't be overstated. 

On Our Radar

Engine shortage from Mexico could shut down Ford plants in U.S. (The Detroit News)

Porsche's American division recovers from COVID-19 as 911 sales soar by 30% (Autoblog)

EV Stocks are Shooting the Lights Out: Is it Just a Bubble? (Yahoo Finance)

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Your Turn

Tesla stocks! Is this growth sustainable, or is the company in a speculative bubble that's due to burst? What other EV stocks do you see blowing up?

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