TESLA DEPARTURE FROM REALITY, IN ONE CHART / THE FINANCIAL TIMES

Tesla’s departure from reality, in one chart

Earnings don’t matter when Trump is your friend

Dan McCrum

© AP

Strange as it may seem for a car company expected to change the world, again, the Tesla share price used to have a passing relationship with the profits it was forecast to produce.

Yes, it was valued on an earnings multiple other carmakers can only dream about, but see if you can spot the point when Elon Musk’s company became untethered from the humdrum reality of financial expectations:

Promises of robots and robotaxis may have been at the forefront of Musk’s commentary around the poor results released on Wednesday, but recall that the pundit and market reaction to October’s “We, Robot” event was underwhelming: the stock dropped 9 per cent, a fall of $69bn.

That plunge was equivalent to two Hyundais, to put it in “carmaker with highly regarded electronic vehicles and robots” terms.

Tesla’s market capitalisation has dropped four Hyundais since its Technoking’s Nazi salute, but at $1.2tn it is still valued at about 100 times estimates for profits in 2026, or 35 Hyundais.

So, the Trump effect remains in full swing — and few appear keen to interrogate the quality of those earnings while Musk is a prominent colleague of the famously loyal and level-headed President.