TL;DR: If Tesla is no longer priced as a fast growing tech company, the P/E should drop to align with the rest of the automotive industry (10-12). That puts the fair value share price around $25.
Recent data from various sources indicate that the global auto industry P/E ratio typically ranges between 15 and 20 when considering a broad set of companies. However, Tesla's significantly higher P/E ratio—often cited above 100 (161.23 as of March 17, 2025)—skews the industry average upward when included. Excluding Tesla, the average P/E ratio for traditional automakers tends to be much lower, reflecting their more established, slower-growth business models compared to Tesla's growth-oriented valuation.Focusing on major automakers excluding Tesla, here are some representative P/E ratios based on recent data:
* Toyota: Approximately 9.7
* General Motors (GM): Around 9.13
* Ford: About 6.74
* Honda: Around 7.3
* Stellantis: Approximately 6.5
* Volkswagen (VW): Around 4.0
* Hyundai: Approximately 2.9
These figures indicate that traditional automakers have P/E ratios typically in the single digits to low teens. To estimate the average P/E ratio excluding Tesla, we can take a simple average of these representative companies:
* (9.7 + 9.13 + 6.74 + 7.3 + 6.5 + 4.0 + 2.9) / 7 = approximately 6.61
However, broader industry analyses (e.g., from Simply Wall St or Nasdaq) suggest that the U.S. or global auto industry average, when Tesla’s outsized P/E is excluded, typically falls between 8 and 12, depending on the sample of companies and market conditions. The U.S. auto industry's 3-year average P/E is noted at 72.0x, but this is heavily influenced by Tesla; without it, the average drops significantly, aligning closer to the 8-12 range cited. Given the variability and the lack of a single definitive dataset in the provided references, a reasonable estimate based on the data is:
* Average P/E ratio in the automotive industry, excluding Tesla: Approximately 8 to 12, with a midpoint around 10.
This range reflects the lower valuations of traditional automakers, which are less growth-focused than Tesla, and is consistent with current sentiment and comparative financial metrics as of March 20, 2025. For a more precise figure, additional data from a comprehensive set of automakers would be needed, but this range provides a solid approximation based on available information.