You can call it symbolic, and it might not last for too long, but history was made today when after the markets opened, Tesla’s stock market cap overtook General Motors, making it briefly the No 1 car maker in the U.S., according to Market Watch.
Analysts note that at 9:44 am, EST, Tesla’s market cap jumped to about $51 billion, or $1.7 billion more than GM. As the day wore on, GM, founded in 1908, slowly regained its position as No 1, recently worth $51.3 billion to Tesla’s $50.8 billion.
Shares of Palo Alto, Calif.-based Tesla, which opened in 2003, rose as high as $313.73 a share and was poised to notch a new closing record, however at the close of trading, shares in Tesla were $312.39, an increase of 3.26 percent over the previous price of $302.24. GM stock closed at $33.97, an increase of 0.77 percent over its previous $33.71 closing price.
Tesla’s achievement underscores the changes occurring in what has become a volatile global automotive industry. Experts point to the tech community’s pursuit of a new vision for the industry – including electric and self-driving vehicles. And if last week’s disappointing WSJ year-to-date sales reports are any indication, the outlook has a lot of investors worried.
Engadget reports that Tesla’s value is based more on potential than sales, so far. Its existing cars are all luxury models and sales have been sort of modest. Last quarter, Tesla sold 25,000 cars, while GM sold nearly 690,000 vehicles. So you could say that Tesla is small potatoes in the automotive industry. You can also say that Tesla doesn’t really turn a profit very often.
But Tesla has a smoking gun – the Model 3, and the company has already banked hundreds of thousands of dollars worth of deposits for the affordable electric vehicle. And again, the experts are saying Tesla will end up having the edge over the big boys by being the first automotive company to truly sell large numbers of EVs.
