Tesla briefly most valuable US car maker

Tesla briefly surpassed General Motors overnight to become America’s most valuable car maker, based on market capitalisation. This comes after Tesla eclipsed Ford last week to take the number-two spot.

Shares in Tesla jumped 3.7 per cent this morning following a stock upgrade by analysts and predictors.  At its highest point of (US)$313.73, the company was worth $73.45 billion, fractionally higher than General Motors’ capitalisation of $73.43 billion. Tesla’s high stock price, considering its production numbers and past profits, has ignited debate that the electric car maker is overvalued. GM is expected to earn $12.9 billion in profit this year, and according to Reuters, Ford is predicted to turn over $9.05 billion in profit. Comparatively, Tesla is expected to lose over $1.37 billion. GM also sold over 10 million cars to customers around the world last year, while Tesla delivered just under 80,000 vehicles, with the order books full and the entry-level Model 3 scheduled to roll out in late 2017. “Tesla engenders optimism, freedom, defiance, and a host of other emotions that, in our view, other companies cannot replicate,” Piper Jaffray analyst Alexander Potter said in a statement after his firm upgraded their stock forecast. Ford president Joe Hinrichs seemed less convinced of the value of optimism when speaking to reporters overnight. “Cashflow should determine what the value of a company is and our cash flow has been pretty good lately,” he said. At the end of the day, we run the business to serve our customers.”