Tesla Is Now Worth More Than Ford, If You Believe The Market
"Stormy weather in Shortsville..." CEO Elon Musk tweets as Tesla market cap hits $48.7 billion.
Fresh off reporting a first-quarter record for overall delivery and production numbers, Tesla's stock soared over 5% in trading on Monday to $298.56, setting its overall valuation at around $48.7 billion—in other words, the electric car maker is now worth more money than Ford and just a little bit less than GM, at least according to the stock market. Yes, that Ford and that GM, with their global footprints and hundreds of thousands of employees. CEO Elon Musk was clearly feeling good about the news, tweeting "Stormy weather in Shortsville..." to all the armchair analysts who still think the stock is overvalued.
But while the country's youngest car manufacturer is poised to become its most valuable in an astonishingly short amount of time, its greatest challenges are still to come in the mega-hyped launch of Model 3 and meeting the 500,000-car production goal Musk set for next year. Still, Tesla remains one of the only car companies to handily smash its sales forecasts amid an industry-wide decline, which likely boosted its stock even more.
These are certainly heady times at Tesla - all this news comes after a $1.8 billion investment from Chinese tech giant Tencent, which should provide a decent amount of runway for the Model 3 launch to get off the ground smoothly. As analyst Ben Kallo told Bloomberg, "people that would normally buy a Porsche are buying Teslas right now." They've got just the right mix of luxury, prestige, and sustainability locked down.
Of course, now it remains to be seen if they've got the engineering capacity to back it up. Forbes reports analysts aren't sure whether Tesla can deliver on the promise of an affordable electric car for all, with production still ramping up to satisfy the 400,000 people on the waiting list for the Model 3. Additionally, the huge Gigafactory that's supposed to be pumping out all those batteries is still under construction.
Then there's the numbers that underlie the $48.7 billion valuation. Bloomberg points out that Tesla sold a little less than 41,000 vehicles in the U.S. last year - that's about the number of F-Series trucks that Ford moves in three weeks. Tesla's "record" first quarter saw over 25,000 cars built, add another zero on the end of that figure and you're still below the number of vehicles Ford sold last month alone.
All this to say, stock market valuations are a game of perceptions. And right now, the prevailing view is the future is electric.