Grantham Is Against Tesla, and the ECB Is Not Against Inflation

16 Nov 2021

We already wrote last week that the analysis of basic investment multiples shows that Tesla shares are overvalued by an average of 40 times relative to competitors. The other day, one of the legends of the investment world, Jeremy Grantham, warned that a bubble was inflated from Tesla shares. Tesla's current stock prices are a projection of investor expectations that the company will be super successful in a super successful market. The reality is that there is practically no chance of meeting expectations. The competition is intensifying: today every major car company is introducing electric vehicles into its lineup. As a result, Tesla's share in the global electric vehicle market is now not 90%, or even 50%, but about 15%.

Volkswagen alone has already sold under 300K electric vehicles in the first three quarters. And this is already close to the volumes of Tesla. But at the same time, the same Volkswagen sells about 10 million more cars from above. And the growth rate of sales of electric vehicles from Volkswagen is almost 2 times higher than that of Tesla. Another 1-2 years at such a pace and a new king may appear on the electric vehicle market. But for some reason, none of those who foaming at the mouth speaks about the bright future of the electric car market are running to buy Volkswagen shares. But the company is not much less the leader in the electric vehicle market in Europe, which in turn, after China, is the largest in the world 4 times ahead of the US market.

In general, the selectivity of perception of reality is not only a problem for Tesla fans. At the start of the week, the head of the ECB Christine Lagarde confirmed that a rate hike by the Central Bank in 2022 is very unlikely. On the one hand, the ECB does not want to harm the economic recovery. By the way, data on the Eurozone GDP will be published today. On the other hand, the ECB is convinced that inflation is a temporary phenomenon and will resolve itself. That is, the Central Bank will not even have time to do anything, as it will be gone.