Tesla worth more than GM and Ford together
The electric car maker is now the most valuable US car company of all time
Electric vehicle maker Tesla is now the most valuable US car company of all time.
The value of its stock saw its market capitalisation vault ahead of General Motors and Ford Motor Co combined.
Tesla shares rallied by nearly 5 per cent to post a record-high close of $492.14 on Wall Street. This brought its value to $88.7 billion, more than GM's at $49.5 billion and Ford's at $36.8 billion.
Tesla stock has doubled in value in the last three months alone, thanks to the company turning a surprise profit in the third quarter. It also recorded an improvement in deliveries and opened its Shanghai factory.
Last week the company said it had delivered a record 112,000 vehicles in the fourth quarter of 2019. This beat market expectations, as buyers rushed to take advantage of subsidies and sales overseas bounced.
California-based Tesla, run by billionaire chief executive and founder Elon Musk, said it delivered 367,500 vehicles during 2019, or 50 per cent more than in 2018.
Tesla is a minnow in terms of vehicle sales compared with Ford and GM. But the value of the company shows that investors are betting on the future of the auto sector being electric.
According to the most recent figures from AutoData, Ford auto sales declined 3 per cent in 2019 to 2.42 million vehicles, while GM deliveries dropped 2.3 per cent to around 2.89 million units.
Former GM executive Bob Lutz, a long-time critic of Tesla, said that the electric vehicle maker was “finally being run like a normal business”.
″[Musk] finally reined in his costs,” Lutz said. “He’s reduced personnel and reduced unnecessary expenditures and has basically done what any other businessman would do in a situation where you’re selling a bunch of stuff but you’re not profitable” on a sustained basis.
Tesla said separately that it has cut the starting price of its China-built Model 3 car by 9 per cent in an effort to lure customers in the world’s biggest EV market after it opened its factory in Shanghai.
FURTHER READING: Tesla unveils record deliveries in Q4
FURTHER READING: Tesla stocks hit record high