Tesla overtakes both Ford and GM in market valuation

Tue 04 April 2017 View all news

Tesla, the luxury American electric car maker is the most valuable car company in the United States, its stock valuation having overtaken that of General Motors and Ford. Tesla stock has risen by about 35% in the past month as investors have bet that Tesla - founded by entrepreneur Elon Musk - is set to revolutionise the motor and energy industries.

While shares in Tesla have surged, those of GM and Ford have declined in recent years.

Tesla 's market capitalization is now equivalent to $102,000 for every car it plans to make in 2018, or $667,000 per car sold last year. By comparison, GM's market capitalization is equivalent to $5,000 per car it sold in 2016. Moreover, Tesla is still not making a profit; market analysts argue that its stock valuation is justified based on long-term expectations for the company's growth.

Tesla is reported to be working flat-out to launch its mass-market Model 3 sedan in the second half of 2017 for which it received more than 400,000 advance orders last year. (See news link.)

Japan's Toyota still remains the world's most valuable car maker by market capitalization with a value of about $173bn compared with Tesla's $50bn.

Tesla delivered 76,230 cars in 2016 – a fraction of Ford’s 6.65m - making sales worth $7bn but a loss of $746m. Ford, meanwhile, recorded a $10.4bn profit on sales of $152bn.

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