Is Tesla more valuable than Toyota?

This blog post is not about the &quot;inherent value&quot; of Tesla, but more a summary of &quot;Enterprise Value&quot; as defined by:<p>&quot;enterprise value = market cap + borrowings - cash&quot;<p>It&#x27;s neat and not too long.

Isn&#x27;t this a strange way to put Toyota to be &quot;closer&quot; to Tesla by &quot;enterprise value&quot;? I mean, if toyota had 1T USD debt, it&#x27;s enterprise value would have been 1.25T, and it would have been more &quot;valuable&quot; than Tesla. But, how is that &quot;better&quot;, if you want to invest in a company?<p>I&#x27;m surprised TSLA is in such a good shape, debt-wise.

If we&#x27;re really digging into it, the actual value of a company should be the amount of money you need in total to buy it. Including the parts that are not for sale (so not just the public shares)<p>That also means for instance convincing the US gov to let you have Tesla, and vice versa convincing the Japanese government and all Toyota&#x27;s debt holders to not intervene in case of a Toyota buyout.<p>And that becomes a completely different story with undefinable numbers and so much more politics.

One of those companies has been sinking money into the &quot;Uncompetitive&quot; section of the hydrogen ladder. The other hasn&#x27;t.<p><a href="https:&#x2F;&#x2F;www.linkedin.com&#x2F;pulse&#x2F;hydrogen-ladder-version-50-michael-liebreich" rel="nofollow">https:&#x2F;&#x2F;www.linkedin.com&#x2F;pulse&#x2F;hydrogen-ladder-version-50-mi...</a>

I see that a lot of people struggle with the term enterprise value. It might make sense to think about this in terms of housing and mortgages.<p>You can say that the total value of a house is the mortgage + equity.<p>When you take out a loan on a house, the value of the house does not change. Just the proportion of mortgage vs. equity.

What a lovely blog post.<p>It’s more about market cap and equity than forward-looking statements about hydrogen and self-driving.

Buying the debt is different than paying off the debt. I see so many comments here assuming that to buy the company totally (or to have total control over a company), one should pay off all debts of the company. It is simply not true. I feel this whole concept of &quot;Enterprise Value&quot; does not really correlate any meaningful value.

Simplistic valuation is not particularly useful. Take even just 1 more factor into account, Japan&#x27;s tremendous debt and multiple lost decades and inevitable nightmare situation. Toyota basically doesnt exist until they built their bzx4 factor in the usa. <a href="https:&#x2F;&#x2F;www.bloomberg.com&#x2F;news&#x2F;articles&#x2F;2023-03-27&#x2F;fears-of-societal-collapse-prompt-new-push-for-babies-in-japan" rel="nofollow">https:&#x2F;&#x2F;www.bloomberg.com&#x2F;news&#x2F;articles&#x2F;2023-03-27&#x2F;fears-of-...</a><p>From the public information I know about Toyota, they are about 15 years behind Tesla.<p>Comparatively VW is probably only about 5 years behind now. GM&#x2F;Ford are about 7 years.<p>So is tesla more valuable? It&#x27;s practically infinite money more valuable. GM could spend $100 billion to try to catch up and could not. Its not about money, it&#x27;s about the people who work for them.

This is a very bad term.<p>When I think about value and price, price is what I pay, value is what I get.<p>Enterprise value is not what you get - it&#x27;s what you pay...

Could depend on how many planned ICE bans are postponed and by how long?

Only one (dismissive) side note about self-driving in the article.<p>I have yet to hear a solid argument against Tesla achieving full self-driving within the next ten years.<p>Self-driving will automate billions of daily man hours.<p>Capturing even just a very small fraction of that value results in enough earnings to justify Tesla&#x27;s current market cap. Even if you have to discount the earnings for another ten years, in case it takes so long to start selling FSD software.<p>Talking rationally about FSD always results in reflexive downvoting here on HN. Which I take as a sign, that the thinking about Tesla&#x27;s future is muddied by emotions among many people. Maybe because people can&#x27;t imagine fundamental change and also fear change.