How Long Until Tesla Overtakes GM As The Most Valued US Automaker?

Tesla Inc. doesn’t yet make a profit peddling its electric cars, and its sales are a tiny fraction of those tallied by its Detroit rivals. But that’s not the point to investors keen to divine the future of the auto industry and bet on it.

Their belief in Chairman Elon Musk’s vision for an electrified automotive future is powering Tesla’s market capitalization past much-larger Ford Motor Co. to make the Silicon Valley start-up the second most valued American automaker.

At the market close Wednesday, investors valued Tesla’s outstanding shares at $49.53 billion, slightly behind General Motors Co.’s $51.34 billion. The market capitalization of Ford totals $45.19 billion — a harsh reminder that investors believe profitability today is no guarantee of growth in the future.

Truthy - 4/6/2017 10:32:45 AM

+11 Boost

Yes, and Porsche was once the most valuable car company too based on market capitalization. If they stumble on the Model 3 launch or other automakers join the electric car trend, then it will come down. There is a certain amount of "irrational exuberance" in the market value of Tesla.

TheSteve - 4/6/2017 12:28:13 PM

+1 Boost

Gotta agree with Truthy.

Currently, Apple (AKA "The iPhone Company", as the majority of their earnings come from iPhone sales) is the most valued company (regardless of sector). What does that tell us, other than the people willing to buy the stock at a premium, believing they can still turn a handsome profit when they sell it. Does anyone believe Apple creates the best products, or that they're unbeatable, or that they'll always have the highest market capitalization, or that they'll never have a crash? Similar story with Tesla Motors and their currently high stock price.

TomM - 4/6/2017 5:28:36 PM

+8 Boost

Also agree with Truth - but also must add that so far - not only had TEsla not made a profit on their cars - but virtually ALL EVs are sold without profit according to their makers. We still do not know if there is enough market for these cars - and if Trump were to eliminate the Tax advantage - I suspect they would not be able to sell enough at a REAL price to exist.

vdiv - 4/6/2017 6:18:38 PM

-3 Boost

Having used others, yes I do believe that Apple and Tesla create the best products, and apparently am not the only one.

MDarringer - 4/6/2017 8:00:50 PM

+1 Boost

Then again, a Chromebook does 90% of what a MacBook can do for 1/10th the cost.

vdiv - 4/7/2017 2:40:16 PM

-1 Boost

Sure, if 90% of what you do is to troll AutoSpies ;)

nguyenvuminh - 4/6/2017 10:49:48 AM

0 Boost

Well put Truthy. Market valuation changes by the month and reflects changing criteria of of different mkt analysts, each with their own purpose (and not entirely to the benefit of their individual investing clientele either).

MDarringer - 4/6/2017 8:05:41 PM

+3 Boost

What are the objective parameters of "most valued" an entirely subjective term?

TheSteve - 4/6/2017 8:52:04 PM

+2 Boost

Most valued = Highest market capitalization, which is calculated by Number_of_outstanding_shares x Current_share_price.

Both parameters in the calculation are objectively determined. In other words, the number of outstanding shares is a fact, as proven by accounting and public record. So is the last trading price of the stock. Both 100% objective numbers.

However, people trading in these shares often have subjective thinking when concluding that the stock is worth the current asking price, or more.

MDarringer - 4/6/2017 10:17:08 PM

+1 Boost

@TheSteve:

"Most valued" by its vagueness could mean anything. It's 100% ambiguous.

If people want to speak of a financial context then it makes sense to use a precise--and more correct--term like "highest market capitalization" which is how people in business would speak of such a calculation.

SanJoseDriver - 4/7/2017 8:03:59 PM

-3 Boost

How long? It happened for one day earlier this week (Tuesday). Whether it will happen again depends on how the well the Model 3, solar roof, and grid storage production scale this year.

The latest Model 3 release candidates look good fit & finish wise and since they are being tuned/benchmarked with BMW 3-series, hopefully they will perform well. In July we'll have more clarity on what people will actually be getting and for how much and will see if orders increase or there are cancellations. My wife is getting the Model 3 right away, I'm going to hold out for the dual motor version.