Tesla becomes most valuable US carmaker

FRENCH PRESS AGENCY - AFP
NEW YORK
Published 10.04.2017 20:05
Updated 10.04.2017 23:16
A Tesla logo adorns a 'Model S' car in the dealership in Berlin, Germany, November 18, 2015. (Reuters Photo)
A Tesla logo adorns a 'Model S' car in the dealership in Berlin, Germany, November 18, 2015. (Reuters Photo)

Tesla Motors overtook top US automaker General Motors in market capitalization, securing first place Monday following an upbeat report by an investment analyst citing the electric carmaker's "captivating" ability to stir investor and consumer enthusiasm.

Near 1430 GMT, Tesla shares were up 3.1 percent at $311.93 for a market capitalization of $51.53 billion, more than $1 billion above GM.

"More so than any stock we've covered, Tesla engenders optimism, freedom, defiance, and a host of other emotions that, in our view, other companies cannot replicate," Piper Jaffray said in a report moving Tesla to "overweight" in their recommendation.

"As they scramble to catch up, we think Tesla's competitors only make themselves appear more desperate," the report said.

Tesla's share price surge came on the heels of that positive analyst comment, but the landmark crossed Monday only concerns stock valuation.

The story for revenue and real-world auto footprint is very different. Tesla last year sold 84,000 cars, generatnig $7 billion in revenue.

General Motors, in contrast, sold 10 million cars and took in $166 billion in revenues.

But Tesla is benefiting from the increasingly widely-held view on Wall Street that it has a better grip on a future in which Silicon Valley could be at least as big a player as Detroit in the US auto market, as electric cars and autonomous driving play a growing role.

Tesla, which last week overtook Ford in market capitalization, is on track to begin production in July of the Model 3, which is aimed at the middle market, making the car accessible to a broader swath of consumers.

Tesla already has orders for more than 400,000 of the Model 3, priced at $35,000, and has said it will reach production of 500,000 by 2018, a pace many analysts are skeptical it will reach.

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