Tesla passes GM

Elon Musk’s Tesla has surpassed General Motors to become America’s most valuable carmaker.

A week after topping the Ford Motor company, Tesla climbed 3.3%, lifting its market capitalisation to $50.9 billion, Bloomberg reports.

The electric-car maker is valued at about $64 million more than GM. Musk’s company is now within $1 billion of the Honda Motor company and cracking the top-five automakers worldwide.
The turnabout shows the extent to which investors have bought into Musk’s vision that electric vehicles will eventually rule the road.

GM beat Tesla to the market with a plug-in Chevrolet Bolt with a price and range similar to what Musk has promised for his Model 3 sedan coming later this year. But the more than 100-year-old GM has failed to match the enthusiasm drummed up by its much smaller and rarely profitable US peer.
“Tesla engenders optimism, freedom, defiance, and a host of other emotions that, in our view, other companies cannot replicate,” Piper Jaffray analyst Alexander Potter says.

Tesla’s usurping of GM and Ford will undoubtedly spur debate over the relative value of Musk’s company compared with some of the world’s top-selling automakers, Bloomberg says.

GM expects to earn more than $9 billion this year, and analysts predict Ford will generate adjusted profit of about $6.3b. On that basis, Tesla is expected to lose more than $950 million.

For now, Tesla ranks the sixth-biggest carmaker by market cap, behind Toyota Motor Corp., Daimler AG, Volkswagen AG, BMW AG and Honda. Although Musk, Tesla’s chief executive officer, has a long way to go to match Toyota’s $172 billion market cap, Honda is barely ahead at about $52 billion.
Tesla delivered fewer than 80,000 vehicles globally last year to GM’s more than 10 million. Musk’s more-affordable Model 3 sedan, scheduled to roll out later this year, will be critical to his ambitions for Tesla to transform from niche carmaker into a mass-market manufacturer.

The Model 3 is expected to sell for about $US35,000 ($NZ50,360) and has at least 350 kilometres of battery range per charge, marks GM achieved with the Bolt that began selling in California earlier this year.