Tesla overtakes General Motors in market value
NEW YORK - Agence France-Presse
Tesla shares were up 3 percent to $311.74 near 17:20 GMT, for a market capitalization of $51.43 billion, more than $1 billion above GM, a 109-year-old company that sold almost 120 times as many cars as Tesla last year.
Tesla’s latest share price surge followed an upgrade by Piper Jaffray, which set a $368 target on shares and described the electric carmaker’s messianic-like captivation of Wall Street.
“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 rise reflects a broader conviction in the market that the Silicon Valley company embodies the future the industry and has a firmer grip than traditional players on technologies that will inject more autonomous features into driving.
That is in spite of awareness that Tesla is still a bit-player as far as the number of vehicles on America’s roads, and skepticism about the California company’s ability to meet the ambitious timetable it has laid out for taking electric cars mainstream.
Tesla last year sold 84,000 cars, generating $7 billion in revenue.
General Motors, in contrast, sold 10 million cars and took in $166 billion in revenues.
“We’ve built a track record of strong financial performance,” a GM spokesman told AFP.
“We’ll stay focused on delivering outstanding results and making decisions to deploy capital where it will generate the strongest returns, to enhance shareholder value.”
GM’s strategy has included raising investment in autonomous vehicle technology and a commitment to profitable growth embodied by the March decision to sell its European brand Opel to French automaker PSA.
Tesla declined to comment on the rise in its valuation.