$Tesla Motors(TSLA)$At some point, there will be meeting point between the PE ratios of Tesla and other automakers. Let’s be frank - we are in the transportation/mobility business, no matter how we look at it. And the reason people purchase the vehicle to fulfill that purpose in their lives remains. They look at a car, they want it to be able to take them from point A to B, and they have a certain price range. They want reliability, comfort, and have certain trade-offs in mind to be able to meet their budgets. Traditional automakerswill make EVs because the costs of doing so are much smaller than the ICEs, so from a business standpoint, that works perfectly for them to invest in the infrastructure and scaleup very quickly. Now, we read that Volkswagen will beat Tesla's production capacity by 2023 - the BusinessWeek report highlights. What does this tell you?

PE Volkswagen (TTM) - 7.5x.

PE Tesla (TTM) - 300x. 

This valuation is becoming more and more unlikely to be sustained just on pure narratives and catalysts of new gigafactories alone. To sustain this PE ratio, Tesla needs to somehow build 30 to 50 more gigafactories to match the COLLECTIVE output of ALL THE traditional automakers by 2023. As an investor, you will also have to assume the traditional automakers are idiots, their management are dumbos, and their R&D will NOT be able to produce a decent vehicle. That is a very big leap of faith to take. 

Between Tesla growing into that 300x valuation and it cratering to meet Volkswagen 7.5x PE valuation. Which do you think will be a more likely scenario?