Tesla’s Worth More Than Ford and GM… Combined

The stock of automaker Tesla continued to soar on Wednesday, ending the trading session just under $500 per share.  The skyrocketing stock price pushed the market capitalization of Tesla to $88 billion, which makes the company more valuable than General Motors and Ford combined.

Tesla’s stock has been moving higher since the company met third quarter production estimates last fall, and got further boosts when the company announced it had produced 367,000 cars in 2019, and was able to start delivering cars from its new Chinese factory in the last week of December.

But there are several things worth remembering about Tesla.  The firm doesn’t earn a profit, it lost the last of its tax credits for new owners at the end of last year, it produces about 4% of the number of cars that GM (6 million) and Ford (3 million) produce around the world, and it will face increasing competition from very large companies such as Volkswagen, BMW, Mercedes, Audi, and others in the electric vehicle space in the years ahead.

Founder Elon Musk has created quite a bit of hype for the moment, but there’s a question about how long it can continue.

 

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