3rd ICAI 2024

International Conference on Automotive Industry 2024

Mladá Boleslav, Czech Republic

Figure 6: Price to earnings of selected companies in the last ten years

Source: Authors’ calculations based on Macrotrends (2024a, 2024b, 2024c) and Companiesmarketcap (2023)

In connection with the findings presented above regarding P/BV, it is possible to hypothesize that the problem, especially for Volkswagen Group (but also for Toyota Motor Corporation), is not so much the profitability of operations (profit margin) as the huge volume of investments made in the past. Given the enormous scale of these investments and their original purpose (already obsolete technologies and investment projects not in sync with current environmental regulation and sustainability), these investments are not able to generate sufficient return. 4. Conclusion The findings of this research underscore a notable trend in the financial performance of Tesla, Toyota Motor Corporation, and Volkswagen Group, suggesting a convergence of key metrics over time. Particularly noteworthy is the observation that Tesla’s business model appears to stabilize, with its financial performance metrics converging towards the levels exhibited by industry stalwarts such as Toyota Motor Corporation and Volkswagen Group. This trend aligns closely with the narrative of performance convergence, where active competition within the automotive sector mitigates the ability of any single company to consistently outperform its peers over the long term. The evidence presented here suggests that Tesla, despite its initial disruptive impact on the industry, is gradually assimilating into the broader automotive landscape, with its financial performance metrics aligning more closely with established industry norms. This convergence underscores the competitive dynamics within the automotive sector and highlights the challenges inherent in maintaining a distinct competitive advantage amidst intense competition. Disclosure statement: No potential conflict of interest was reported by the authors.

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