Tesla overtakes GM as number 1

Date: 10 APR 2017posted by Car Rentaledited by WinX

As of 9:35 am in New York, April 10th 2017, Tesla has overtaken General Motors as the most valuable car manufacturing company in the United States and was worth more than $1.7 billion than the company whose well-being was once viewed as intertwined with the nation's success. Tesla climbed 3.4 percent in the early Monday morning and reached a market capitalization to about $51 billion. This follows their trend last week Monday when the company saw a 7.1 percent climb following a quarterly report that the company's deliveries had exceeded experts' original forecast and giving off signs that the Model 3 will be on schedule for deliveries for the second half of this year.

Tesla's position at the top spot in the United States came just a week after the electric car manufacturing company overtook Ford last week at second place on Tuesday. The recent gains has analysts debating over the relative value of Musk's company to some of the world's leading auto manufacturers. While GM is expected to earn more than $9 billion this year and experts predict an adjusted profit of about $6.3 billion for Ford, Tesla is expected to lose almost $1 billion on the same basis. In the same line of thought, Tesla only delivered 80,000 vehicles in 2016, while Ford delivered 6.7 million units and GM delivered over a staggering 10 million units. So what makes Tesla stock so valuable?

The recent gains show the extent of trust investors has bought into Musk's vision of electric cars eventually dominating the roads. Tesla is not only in the vehicle manufacturing business, but is also a technology player with the ability to dominate the market with their battery technology and energy storage capabilities. To the those same investors, GM and Ford are both ancient and headed for a slowdown in car sales that will erode profits. While GM's Chevrolet Bolt EV with a similar price tag and travel range as what was promised for the Tesla Model 3 has already hit the markets, the plug-in has failed to reach the level of enthusiasm as the latter. The Model 3 already has over 400,000 reservations while the Bolt EV is considered successful, it lacks in volume in comparison to the Model 3. The Model 3 will the make or break point for the electric car company. If it is successful, it will transform the luxury niche car maker into a mass market manufacturer. The electric car is expected to start at $35,000 and has a travel range of at least 215 miles on a single charge.

Leave a comment

Please enter your full name

Please enter your question