The shares of Tesla, Inc. have been one of the great beneficiaries of the market rally since the March 2020 low. Government fiscal stimulus and Fed monetary expansion, along with a new generation of retail investors using commission-free trading platforms, has created a very sharp rise in the stock (see chart below). Is Tesla stock sustainable at current levels longer-term?I am an automobile enthusiast and have no objection to owning an electric vehicle. Electric cars have a long history, going back to the early years of the last century. I am also an investor, who has had a long career as a money manager and have learned to look at potential investments with a pragmatic eye. What I see in the valuation of Tesla shares is concerning.Firstly, the market capitalization of Tesla is greater than the top 9 automakers combined! One inference that could be drawn is that investors expect Tesla to eventually put all the other manufacturers out of business and be the monopoly producer of automobiles. That is very unlikely.Tesla\u2019s enormous market cap suggests that it will retain its current large share in the sale of electric vehicles. This presumes that the major manufacturers will not be introducing competitive electric vehicles. Most, if not all, of the major auto companies, will be introducing all-electric models in the next 2\u20133 years. Tesla will be hard-pressed to retain its market share in the coming environment.As well, investors are likely overestimating the pace of sales of electric cars. Regardless of price or the competitive environment, the pace of adoption will be constrained by the supply of electricity. I have spoken with the presidents of a cross-section of electric utilities, all of whom expressed the view that no major Western country has the excess capacity to accommodate more than 10% of cars\u2026<\/p>","protected":false},"excerpt":{"rendered":"
The shares of Tesla, Inc. have been one of the great beneficiaries of the market rally since the March 2020 low. Government fiscal stimulus and Fed [\u2026]<\/span><\/p>","protected":false},"author":0,"featured_media":2796,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[35],"tags":[],"_links":{"self":[{"href":"https:\/\/afluxcoin.com\/es\/wp-json\/wp\/v2\/posts\/3252"}],"collection":[{"href":"https:\/\/afluxcoin.com\/es\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/afluxcoin.com\/es\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/afluxcoin.com\/es\/wp-json\/wp\/v2\/comments?post=3252"}],"version-history":[{"count":0,"href":"https:\/\/afluxcoin.com\/es\/wp-json\/wp\/v2\/posts\/3252\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/afluxcoin.com\/es\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/afluxcoin.com\/es\/wp-json\/wp\/v2\/media?parent=3252"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/afluxcoin.com\/es\/wp-json\/wp\/v2\/categories?post=3252"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/afluxcoin.com\/es\/wp-json\/wp\/v2\/tags?post=3252"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}