Tesla leaves behind GM and Ford to become the most valuable carmaker in America

According to stock market standards, Tesla [stock_market_widget type=”inline” symbol=”TSLA” template=”chart” color=”default” refresh_frequency=”30″] is now the most valuable automaker in US. It has passed Ford and General Motors both companies over a century old. This week Tesla’s stock price saw a record hike of 6% thanks to the strong sales of its Model S and Model X cars. At present the company’s shares are showing 42% rise compared to what they were at the beginning of the year.

The current market value of the company is $53 billion whereas Ford and GM are valued at $45 billion and $50.8 billion respectively.

The oddity here is how Tesla shares could be priced so high even though the company lost $675 million in revenue in 2016. The company’s total sales last year was only worth $7 billion. Compared to Tesla which was launched in 2003, Ford and GM are giants. GM’s total revenue was $166.4 billion last year with a profit of $9.43 billion and Ford showed a profit of $4.6 billion on revenue of $151.8 billion.

The fact is Tesla is more than a carmaker, they have diverse operations, and the company’s CEO has been able to persuade investors of the huge potential of the company and how it can change the world. And he isn’t very wrong in his estimations given that the company sales have grown threefold in the past four years. The company is also just about ready to launch its Model 3 electric vehicle which will be priced at $35,000. As of last year, already 373,000 pre orders have been placed for the car and the company seems on track to deliver at least some of these orders this year.

Ford and GM aren’t having as much luck. Their revenue has been mostly flat for last five years, GM is up by 1.6% year over year due to increased sales of Buick and GMC. Ford however suffered a decline of 7.2%.