Tesla stock soars past GM and Ford combined

Tesla’s share price shot up above the combined value of GM and Ford.

Noel Randewich had the news for Reuters:

For the first time, Tesla Inc’s (TSLA.O) stock market value has eclipsed the combined values of General Motors Co (GM.N) and Ford Motor Co (F.N).

The Silicon Valley electric car maker’s stock jumped nearly 5% on Wednesday, closing at a record $492.14 per share and elevating its market capitalization to almost $89 billion, or $2 billion larger than the sum of General Motors’ and Ford’s respective market caps of $50 billion and $37 billion.

Fueled by a surprise third-quarter profit, progress at a new factory in China and better-than-expected car deliveries in the fourth quarter, Tesla’s stock has more than doubled in the past three months.

Business Insider’s Carmen Reinicke reported:

The company had already surpassed the market values of two other US auto giants: General Motors, which had a value of roughly $50 billion at Tuesday’s close, and Fiat Chrysler, which had a value of about $22 billion. Tesla has previously been the top US automaker by market value, but it had not beaten Ford’s 1999 record until this week.

While Tesla has overtaken US auto companies in market value, it is still dwarfed by non-US automakers. At the end of trading on Tuesday, Japan’s Toyota had a market value of roughly $232 billion, and Germany’s Volkswagen had a value of about $98 billion.

The latest surge in Tesla’s stock price began on Friday, when the company said it exceeded the low end of its guidance by delivering 367,500 vehicles in 2019, a record number and 50% more than in 2018.

“We believe this new solid quarter of deliveries could further put to rest investor concerns around softening demand for Tesla’s product,” Emmanuel Rosner, an analyst at Deutsche Bank, wrote in a note on Tuesday.

Vijay Govindan wrote for CleanTechnica that:

As Frugal Moogal and I have speculated over the last few weeks, there are many reasons for Tesla’s surge. One reason that’s rarely discussed is the expected surge in Tesla auto sales over the coming two years. The below chart excludes the growth of Tesla Energy in the next two years, but it attempts to forecast Tesla’s coming auto sales.

Noted Tesla bear and Credit Suisse analyst Dan Levy states, “The framework contextualizes the lofty assumptions embedded in the stock – to justify the current stock price one arguably must assume that by 2025 Tesla will grow annual volume to 1.2mn units.” The same analyst raised his 12-month Tesla price target from $200 to $350 in an attempt to move from totally absurd to semi-reasonable.

I expect Tesla to produce 150,000 units in China and produce another 150,000 Model Y this year. As the ramp continues, I expect both to double production next year, joined by production of the CyberTruck and the Berlin factory coming online. Sometime during 2021, Tesla will have produced more than a million vehicles within a year. This is remarkable. I am hesitant to estimate beyond 2021 because Tesla is growing so fast. I don’t consider these super bull numbers, rather numbers based on what is genuinely possible.