Barely a day goes without some analyst company or bank throwing out evaluation numbers for automotive companies. But not the traditional OEMs, but the new news ones like Waymo, Uber, or Tesla.
Multiple analyst groups were not sure how much worth is Google-sister Waymo, but even the lower end estimate by investment bank Morgan Stanley of 75 billion dollars seems mind blowing. Even more unbelievable is the latest evaluation that Morgan Stanley now published, after Waymo released more details.
Morgan Stanley’s evaluation model expects that Waymo’s taxi business alone is worth 80 billion dollars, logistics 90 billion, and software license 7 billion. And all that without Waymo even selling a product yet. But it is expected that Waymo in 2020 will have revenues of one billion dollars, and two years later already 10 billion. At least 60 percent of the global market for autonomous driving in 2030 is expected to be owned by Waymo, according to UBS.
Other analyst come to similar conclusions. Evercore for instance sets Waymo’s value at 100 billion dollars, right between the two Morgan Stanley evaluations.
Also transportation network provider Uber has been evaluated at up to 72 billion dollars. And now Toyota invested 500 million dollars, as reported by Wall Street Journal. Uber has been under scrutiny after a fatal crash earlier this year with one of its autonomous cars. All tests were suspended and the truck division closed for good.
Tesla’s share price right now is pretty volatile, not least because good and bad news follow each other, and then Tesla-CEO Elon Musk is confusing everyone with his tweets. He publicly pondered in one of his tweets of taking Tesla private. After a few days of back and forth, Tesla will stay at the stock exchange. And multiple reasons are mentioned for the pros and cons of remaining a public company.
Saui Arabia and Volkswagen are rumored to be willing to lift the largest amounts of money. Alone Volkswagen is said to have committed to 30 billion dollars for the 72 billion dollar evaluation. To compare that: today Volkswagen and Daimler are traded for the same amount. In the end, Tesla refused to go private, not least to avoid handing over too much control dependent on a oil-exporting country and a traditional car maker.
Cruise Automation, which was bought by General Motors, received this spring investments of 2.25 billion dollars – including from Softbank – which brought its evaluation to 11,5 billion dollars.
With all the news around evaluations other startups just don’t get the right amount of attention. Zoox for instance just raised 500 million at an evaluation of 3.2 billion dollars. Kodiak, a newly founded startup, raised 40 million dollars. Ghost Locomotion 15 million dollars.
Despite all those evaluations, not all companies are eager to sell out too quickly. Volkswagen is rumored to have been interested in acquiring Aurora, which was co-founded by former Waymo chief developer Chris Urmson. The founders refused, Volkswagen instead became a partner. Another partner is Chinese electric vehicle startup Byton, that itself raised just raised 500 million dollars, and is shipping its first 10 prototypes to Aurora for equipping them with self-driving technology and testing it.
But how do we get to those seemingly crazy evaluations? The share price or the evaluation have nothing to do with actual company revenue and results, but are reflecting the expectation and hope – some would say: bet – on the company creating and occupying new business areas. Companies able to position their chess figures in time – i.e. develop technologies and business models – can then conquer a dominant position on the field. Future revenue can surpass current expectations by factors of x.
The economic term for the premium on the share price is called innovation premium. And this explains the evaluations that resemble a gold rush. Traditional automakers are caught in a quandary. If they, measured with traditional metrics and lead by managers, not entrepreneuers, spend too much money too early on new technologies and change the business model, then they will be punished by investors. If they are too late, then they lose the market and ultimately, the company.
Dieser Beitrag ist auch auf Englisch erschienen.