Tesla Inc overtook General Motors yesterday to become the US car maker with the largest market capitalisation
It’s the first time in the era of the modern automobile that the most valuable US car maker is not based in Detroit – the luxury electric car manufacturer is based in Silicon Valley.
Helped by an analyst's recommendation, Tesla rose 3.26 per cent to a record high of $312.39 on Monday. Its market value of $50.887 billion exceeded GM's by about $1 million.
Tesla is rushing to launch its mass-market Model 3 sedan in the second half of 2017 and quickly ramp up its factory to reach a production target of 500,000 cars per year in 2018. Last year it sold 76,230, missing its target of at least 80,000 vehicles. By comparison, GM sold 10 million cars and Ford sold 6.7 million.
Proponents justify Tesla’s stock price on long-term expectations for the company’s growth.
They also point to opportunities from Tesla's acquisition last year of money-losing solar panel installer SolarCity and Tesla's Nevada battery cell plant aimed at driving down manufacturing costs.