Elon Musk had a dig at doubters as Tesla's value tops that of Ford
And the electric car maker is closing in on US market leader GM.
TESLA HAS BECOME the second-largest US car maker by market capitalisation, displacing Ford as the 114-year-old auto giant’s sales lagged amid concerns about the ability of the market to keep growing.
Many major auto makers reported US sales declines in March compared to a year ago, but Tesla over the weekend said it saw a huge jump in vehicles delivered to consumers in the first three months of the year.
That was enough to send the electric car maker’s stock soaring, even as investors punished major car brands for reporting lower-than-expected March sales.
Tesla said it delivered 25,000 of its high-tech vehicles in the January-March period – a 69% surge compared to the first three months of 2016 – indicating it was on its way to meeting its goal of 50,000 vehicle deliveries by mid-2017.
Late last year, the company reported its first quarterly profit in more than three years, but then slipped back into the red in the following quarter.
Investors still rewarded the company, with stock movements reshuffling the hierarchy among US carmakers. Tesla Motors overtook Ford for the number-two spot and closed the gap with GM, the biggest US automaker by market capitalization.
At market close, Tesla was valued at $48.63 billion, while Ford was priced at $45.47 billion. GM’s market capitalisation remained just above $50 billion.
Tesla founder and CEO Elon Musk marked the occasion on Twitter with a dig at short sellers, investors who bet that a company’s stock will decline.
“Stormy weather in Shortville,” Musk wrote.
Major brands struggle
Tesla has been building its first Irish showroom in Dublin as part of its international expansion, while it is also likely to install so-called ‘supercharging’ points to service its electric cars in the largest cities across the Ireland.
The car-maker had been struggling to keep pace with demand for its more-affordable vehicle, the Model S, for which prices start at a still very hefty €84,900 locally. The cheaper Model 3 is due to go into production mid-this year.
Elon Musk with a Tesla Model X
In an earlier forecast note, Edmunds analyst Jessica Caldwell struck a cautionary tone for the US car industry as a whole, saying there were several areas of concern.
“Inventories have reached levels not seen in more than a decade, and incentives are rising,” Caldwell said, referring to discounts and other enticements offered to consumers.
“We’re also seeing an increase in loan terms and indications of a rise in subprime lending, which demonstrate sales aren’t coming as easily as they used to,” she said.
But while Toyota echoed that cautionary tone, pointing to a declining selling rate, GM remained optimistic.
“More people are working, consumer confidence is at a 16-year high, fuel prices are low,” Kurt McNeil, head of GM’s US sales, said in a statement.
“We see more growth ahead for our brands,” McNeil said.
Additional reporting Peter Bodkin
