Good morning and welcome back to Speed Lines, The Drive’s morning roundup of what matters in the world of cars and transportation. Today we’re discussing Ford’s play for the future, Volkswagen’s electric delays and Tesla’s skyrocketing valuation. You should be sensing a common theme here.

Tesla Hits It Really Big

Today’s roundup is kind of all about the same thing, so let’s start with Tesla. 

Startup EV and hydrogen semi-truck company Nikola Corp. made headlines this week for a $34 billion valuation—higher than the Ford Motor Company—that made its CEO and founder one of the world’s richest people, despite no products to sell and no revenue planned for 2020. Investors are betting on its future, not its present, but it still proves how baffling and nonsensical valuations really are.

It’s Tesla, however, that is now the world’s most valuable car company. Yesterday Tesla’s share price hit $1,000 for the first time, making it worth more than Ford, General Motors, Honda and Fiat Chrysler put together.

It is here where you may now pause to consider that Tesla, while successful, is nowhere near as large or as stable as Toyota, or Ford, or any of those other companies. Investors do not care. It’s the future that matters to them. Here’s a dispatch from Bloomberg (which unlike most outlets I’ve read still ranks Toyota’s market cap technically higher on paper):

With a market capitalization of more than $190 billion, Tesla still has some distance to close to reach Toyota’s $210.5 billion valuation, which includes treasury shares, according to data compiled by Bloomberg. A rally of about another 11% in Tesla shares could see it claim the crown if Toyota holds steady, with Tesla already up 23% since the beginning of June.

Tesla’s valuation comes despite a gulf in the scale of the two automakers. The Palo Alto, California-based maker of electric cars produced 103,000 vehicles in the first quarter, or about 4% of the almost 2.4 million made by Toyota. Tesla climbed another 9% Wednesday to close above $1,000 for the first time as Musk, the chief executive officer, told employees it was “time to go all out” and put its Semi truck into volume production.

We covered the last item yesterday when news of CEO Elon Musk’s email first leaked. But today we know it was a very, very short email, akin to me telling the staff of The Drive that we are going to space in a spaceship soon and offering no other details as to how, when or why. Was it a play to juice Tesla’s stock price? You can’t put that past Musk. It certainly worked.

The point is that despite the same coronavirus setbacks as every company, Tesla’s on track to have a great year, and Toyota—as huge and profitable as it is—will also be seen by some analysts as a lumbering giant slow to transform into a company centered around electrification and mobility. As that Bloomberg story notes, Toyota has been less aggressive than rivals on moving into full EVs, so maybe some of that criticism is warranted. 

Still, Wall Street loves Tesla. And it makes the other car companies jealous.

VW’s Future Faces Delays

Both to please investors and for regulatory reasons, nearly every automaker is making a huge push into electricity. But no automaker is doing it as massively as Volkswagen, which is planning a large-scale onslaught of EVs across all its many brands. The vehicle that will lead the charge is the Volkswagen ID.3, kind of like a long-range electric Golf that’s meant to be a true EV people’s car. 

But it’s having some teething issues. The Wall Street Journal reports that deliveries have been bumped to September over software problems, and the version with all the features won’t be available until the end of the year now. It is the second such delay for the ID.3, and coronavirus-related production halts certainly have not helped matters. 

From that story:

The ID.3 delays were among the factors that prompted Volkswagen’s board to strip Chief Executive Herbert Diess of some of his responsibilities this week. Volkswagen has been struggling with other issues too, including labor tensions, an earlier botched model launch this year, falling global demand for cars and dislocations in its markets and supply chains caused by the coronavirus pandemic.

Persistent problems with the vehicle’s complex software show how difficult it is for even the biggest, best-funded automotive companies to replicate the success that Silicon Valley upstart Tesla Inc. has had producing and selling attractive electric cars.

The ID.3 is supposed to be Volkswagen’s electric icon, the car that the company hopes will become as popular with the masses as its legendary Beetle and bestselling Golf models. But preparation for a summer launch has been plagued by software failures and restrictions on maintaining production in the midst of the pandemic.

The ID.3 will be sold as a larger crossover here in America (of course) but globally, it is a very big deal for VW. Delays and labor issues have already taken a toll on executive management, and you can bet the company’s board won’t tolerate more delays. 

Ford Details Its Own Future

Regular Speed Lines customers know that Ford was in bad shape coming into a coronavirus-plagued year, and now it’s scrambling to deploy future-facing products and convince Wall Street of its own viability. Yesterday Ford gave us its strongest window into that future yet, with details on its electrification plans, tie-ups with VW and autonomy startup Argo AI and more. 

Here’s more: an electric Transit EV van for the 2022 model year, the eagerly anticipated electric F-150 in “the next couple years,” the Mustang Mach-E electric crossover and more conventional trucks and SUVs like the new Bronco to drop in the next two months.

But when asked what Ford thinks of Nikola’s blow-them-out-of-the-water valuation based on, you know, nothing, here’s what Ford COO Jim Farley had to say, according to Automotive News:

“With our knowledge and know-how, I like our chances against all comers as we go all-electric,” Farley said at the Deutsche Bank 2020 Global Auto Industry Conference.

Farley and Ford CEO Jim Hackett used their conference presentation to highlight Ford’s business strategy and update wary investors as it emerges from the COVID-19 pandemic.

Wall Street in recent days has continued to place high value on EV makers. Tesla Inc. stock has continued to soar, despite CEO Elon Musk recently signaling trouble ramping up Model Y production. And Nikola Corp., an aspiring EV commercial truckmaker, now has a higher market cap than Ford despite producing no revenue.

“I see opportunity for Ford,” Farley said Wednesday on CNBC when asked about Nikola’s market cap.

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