Tesla’s market capitalization skyrockets to more than Ford and GM combined

Tesla
Inc is reaching new heights in the stock market. It has surpassed the market
values of Ford Motor Co and General Motors Co combined for the very first time.

On
Wednesday, the car manufacturer saw its stock
gain around 5% to $492.14 per share that recorded its market capitalization
at $89 billion, marking $2 billion more than the combined worth of Ford and GM.

Owing
to Tesla’s timely deliveries of the vehicles in the fourth quarter; a figure
that largely exceeded the expectations along with the Shanghai GigaFactory 3
contributing to an increase in production, share prices for Tesla have more
than doubled in a short period of three months.

Mainstay
Capital Management Says That Investors Still See Tesla As A Tech Giant

Mainstay Capital Management’s chief investment strategist, David Kudla, commented on the recent hike in Tesla’s stock and highlighted that the company has always been taken as a giant of the tech industry. In order for it to maintain the current value, it will have to be recognized as an electric car manufacturer.

The
Silicon Valley carmaker’s success under Elon Musk, the Chief Executive, has
surpassed many doubts that skeptics previously had. He has defied many
assumptions of being overtaken by other automakers such as Ford and GM. A few
of the investors and analysts, however, are still skeptical about the company’s
ability to be consistent in delivering cash flow and profit.

The
restored confidence of the Tesla investors, according to the experts, stems
from the company reaching a market value of more than its U.S rivals, Ford and
GM, combined, while it only delivered 367,500 vehicles last year against over 2
million deliveries for each of its competitors.

Daimler,
Volkswagen, BMW, GM To Challenge Tesla In The League Of Electric Cars

On
the other hand, other car manufacturers are currently trying to develop their
electric cars of the same caliber as Tesla
in terms of technology, style, and performance. Amongst these, Daimler,
Volkswagen, and BMW take the lead while GM plans to introduce electric SUVs
that are likely to step up the competition for Tesla in the upcoming months.

Audi,
Porsche, and Jaguar have all tried but failed to emulate the success achieved
by Tesla Inc. Contrary to Tesla, GM and Ford have had a turbulent last year in
terms of sales. While Ford still managed to print a 10% rise in the stock
market in 2019, GM remained flat on average. As per the car manufacturers, the
U.S – China trade war weighed on the investors’ sentiment that translated into
reduced sales for the two auto giants.