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Tesla is now the most valuable US car maker and is worth more than Ford or GM

By Koh Wanzi - on 11 Apr 2017, 4:24pm

Tesla is now the most valuable US car maker and is worth more than Ford or GM

The Tesla Model 3 is slated to arrive later this year. (Image Source: Tesla)

Tesla has passed General Motors to become the most valuable US car maker, a feat not to be dismissed, even if it proves only temporary.

This comes a week after Tesla overtook Ford’s US$45 billion valuation, and the company is now within US$1 billion of Honda and close to making it into the top five automakers worldwide. Elon Musk’s electric car darling is worth over US$51 billion at the time of writing, just slightly more than GM.

GM is not without a foothold in the electric vehicle market, having launched the Chevrolet Bolt ahead of Tesla’s own Model 3, which is promised for later this year. However, the century-old automaker – once an entity whose success was synonymous with that of the nation’s economy – has failed to generate the same enthusiasm as Tesla.

The young upstart has not even begun to turn out consistent profits. It is expected to lose over US$950 million this year, while GM and Ford are projected to earn around US$9 billion and US$6.3 billion respectively.

Investors are clearly buying into Tesla’s potential, rather than what it has shown so far, and they are betting that Musk’s company will be able to dominate the market for electric cars and energy storage when those technologies fully mature.

Having said that, pre-orders for the Model 3 have been brisk, and competition is scarce. GM is the only traditional car maker to also build a battery-powered electric vehicle with a range of over 200 miles (~321km), so the US$35,000 Model 3 stands to have a lot of the market to itself.

Source: Bloomberg

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