BUSINESS REFLECTION: After the Bell: The big Ts of the car world circle each other uneasily

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Tesla, with its small, five-car range of electric vehicles could not be more different from Toyota, which accounts for one in 10 cars sold around the world. After two potentially industry-shifting announcements this week, one must ask: which of these ...

Two important events have taken place in the car industry recently: one really dramatic and one seemingly routine.

That decline — just the decline — is equivalent to three times the value of Toyota. But the results were spectacular, beating analysts’ estimates in both profit and turnover. The company is run by a group of very old Japanese men who earn very little compared with other motor company execs. The founding family has enormous influence, although it only holds about 2% of the company’s shares.

Toyota also offers, at least in Japan, a huge number of models. At one point, it was building 90 different models, three times as many as its main Japanese rivals, although that has been cut back recently. It has 370,000 employees and operates in 70 countries.If you had to look for an almost-precise opposite in the car industry, it would be Tesla.

First, Toyota, as noted above, has sold around eight million cars each year for the past 15 years. The number of cars it sold last year was almost exactly the same number it sold in 2007. The company is exemplary, huge, enormously profitable — and kinda moribund. Tesla’s stated goal is to increase production by 50% a year, which it has more or less achieved.

And, third, the fact that Tesla’s model range is small suggests a promising future, because it means the company is competing in relatively few segments. That will likely increase, notably with the much-delayed Tesla truck coming out next year. But in a model-to-model battle, Tesla is generally winning, so if you assume this is replicable in other segments, the valuation differential doesn’t seem so bad.

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