Tesla now more valuable than GM and Ford, closing in on BMW

April 10th, 2017 marks the day Tesla reached another milestone. Its market capitalization surpassed those of GM and Ford and made Tesla the most valuable American car company. Considering the numbers, this is remarkable.

Manufacturer Car Sales 2016 Revenue [Billion $] Profi/Loss [Million $] Market Capitalization [Billion $]
Tesla 80,000 7.0 -773 51.44
GM 10,000,000 166.3 9,430 50.15
Ford 6,651,000 151.8 4,600 44.70

With 51,44 billion dollar Tesla surpassed in its market capitalization those of Ford and GM. Ford, a manufacturer that sold in 2016 over 6.65 million cars, had a revenue of $151.8bn and a profit of $10.4bn, reached only a market capitalization of $44.70bn. GM with a revenue of $166.3bn and 10 million cars sold had a market capitalization of $50.15bn. Tesla on the other hand lost $773mio in 2016 and sold fewer than 80,000 cars. In comparison, Daimler stands at a market capitalization of $71.60bn, BMW at $53.72bn, and VW at $67.85bn.

Manufacturer Car Sales 2016 Revenue [Billion $] Profit/Loss [Million $] Market Capitalization [Billion $]
Toyota 10,200,000 158.0 14,600 151.34
Daimler 2,198,000 89.3 8,800 71.60
Volkswagen 10,300,000 229.5 5,400 67.85
BMW 2,000,000 94.2 6,900 53.72
Tesla 80,000 7.0 -773 51.44
GM 10,000,000 166.3 9,430 50.15
Ford 6,651,000 151.8 4,600 44.70

Investor James Montier called those shares story stocks. They are narrating a story, with a vision of the future. Not the past and present results are important, but the potential for future revenue. Uber, Snap, Amazon, or Airbnb have similar skyrocketing market capitalizations which are in no relation to their actual revenue and profits.

We call this an innovation premium, whit share holders anticipating that those companies will dominate the markets in the future and make profit. Tesla is considered to be better prepared for and shaping the future, while traditional car manufacturers are stuck in their old business models and technologies.

With the good news about the status of the scheduled production being of the Tesla Model 3 the market reacted enthusiastically. That is already leading to a panic among traditional manufacturers who haven been ignoring electric cars for too long and considered autonomous driving as technically too complex. Now manufacturers and suppliers are hastily trying to stitch development partnerships together in order counter the looming threat and close the gap.

This article was also published in German.


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