Telsa Motors near $50 billion valuation makes sense by viewing them as Porsche and a near future Mercedes

Telsa passed Ford for overall stock valuation with both valuing around $50 billion. Tesla passed Ford even though it delivered fewer than 80,000 vehicles globally last year, compared with 6.7 million from Ford.

Telsa Motors near $50 billion valuation makes some sense by viewing them as Porsche and a near future Mercedes

Porsche delivered 225,121 cars in 2015, up 19% versus 2014.

The values of the brands is based on the “Royalty Relief approach.” This method estimates future sales that are attributable to a brand and calculating a royalty rate that would be charged for the use of the brand. For example, what the owner would have to pay for use of the brand, assuming it wasn’t already owned.

Porsche jumped nine spots from 18th place in 2016 with a current brand value of $12.4 billion.

Mercedes was the third most valuable brand. The brand was valued at $35.5 billion.

BMW was brand valued at $37.1 billion.

The ramp up of the Tesla model 3 indicates that it could displace Mercedes and BMW in the $40,000 model category within about 12 months of full production launch.

The electric five-seat Tesla model 3 could go to 350000 top 500000 sales per year. It would become best-selling luxury sport sedans in America — the BMW 3 Series and the Mercedes C Class. Telsa has 400,000 pre-deposit orders.

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