On January 10, 2020, Tesla Inc. achieved a new milestone when its market capitalization exceeded the combined worth of Ford Motor Company and General Motors. The electric vehicle maker’s shares climbed 7% to a record $492.14, pushing its total market value to nearly $89 billion—approximately $2 billion more than the two Detroit-based automakers together.
The surge capped a remarkable three-month period for Tesla. During the final quarter of 2019, the company’s stock more than doubled. This rally followed Tesla’s announcement that it had delivered 367,500 vehicles worldwide in 2019, a figure that fueled investor confidence and drove the company’s valuation upward.
Ben Kallo, an energy technology analyst at Robert W Baird, commented on Tesla’s rapid ascent. “Five years ago no one knew what a Tesla was.
It has usurped BMW as an aspirational car,” Kallo said. He added that “Tesla has more going on in those four walls than we know about,” suggesting the company’s potential extends beyond its current public achievements. Despite the stock’s strong performance, some analysts remain cautious.
David Kudla, chief investment strategist at MainStay Capital Management, described Tesla as “back to being a story stock.” He pointed to unresolved questions about the company’s long-term profitability. “There are still some problematic issues out there, chief among them is what will its sustained profitability look like, and when will it start to be valued like a car company and not a tech company,” Kudla said.
Skepticism among analysts is not uncommon. Refinitiv data showed that more analysts recommended selling Tesla shares than buying them, with fewer than ten rating the stock as neutral. Many investors have questioned Tesla’s ability to consistently generate profit and revenue, particularly given its history of missing targets in earlier years. However, Chief Executive Elon Musk has expressed optimism about the company’s future.
One key initiative is Tesla’s investment in battery production at its Nevada facility. Once completed, the plant is expected to become the largest building in the world.
Kallo attributed some of Tesla’s success to what he called Musk’s “magic dust,” which he said helps attract talented employees and loyal customers. The milestone has broader implications for the automotive industry. As a pioneer in electric vehicles, Tesla has pushed other manufacturers to accelerate innovation and competition.
Its success underscores the growing importance of emerging technologies such as battery production and autonomous driving systems. With its market value now exceeding that of Ford and General Motors combined, Tesla has solidified its position as a leading force in the automotive sector.
