Tesla Is Now the Most Valuable US Automaker

Overtaking GM to become the sixth most valuable carmaker in the world behind Toyota, Germany’s Big 3, and Honda.

byChris Tsui|
Electric Vehicles photo

Last week, we reported Tesla surpassing Ford in overall valuation. This week, Elon and the boys in Palo Alto can break out the champagne once again as the American electric automaker topples the final domestic giant: GM. That's gotta take a little wind out of Mary's sails, doesn't it? In a report by Bloomberg Markets, Tesla rose by 3.7 percent as a result of early Monday trading, bringing its market capitalization to $51 billion—eking out General Motors who sits at a little over $50 billion as of this writing. This makes Tesla, financially and empirically, the most valuable American automaker. 

If you think the valuation is ridiculous, no one would blame you—especially considering GM's expectations to earn over $9 billion this year while Tesla is projected to lose almost $1 billion on top of reported ongoing woes with quality control. But, as our own Kyle Cheromcha put it last week, "stock market valuations are a game of perceptions." Regarding public perception and appearances, Alexander Potter, analyst at Piper Jaffray Cos.—and noted Tesla owner—had this to say: "Tesla engenders optimism, freedom, defiance, and a host of other emotions that, in our view, other companies cannot replicate. As they scramble to catch up, we think Tesla’s competitors only make themselves appear more desperate." 

Today's news makes Musk's car firm the sixth-largest in the world behind Toyota, Daimler, Volkswagen, BMW, and Honda. Tesla is slated to release their mass-market, $35,000 Model 3 sometime later this year, hoping to shed their status as a niche car manufacturer. "Even if the Model 3 production launch goes badly, we think customers (and more importantly shareholders) will withhold judgment", Potter writes. 

At this rate, headlines like "Tesla market cap surpasses Honda" should be written by the beginning of next week and ze Germans will be seeing a certain grille-less EV in their financial rear view mirrors sooner than expected.