Tesla’s market value zooms past Ford’s

While Ford sold 6.7 million cars in 2016 to get its net worth, Tesla sold less than 80,000 cars in the same period.

In a landmark development for Tesla, Bloomberg has reported that the luxury carmaker’s value has surpassed Ford’s.

While Ford Motors is currently valued at about $45.1 billion, Tesla is valued at $47.8 billion.

This gains even more significance given the fact that Ford, the second largest carmaker in the U.S, has sold 6.7 million vehicles in 2016, Tesla’s sales were less than 80,000 cars.

After the news reached the market, Tesla’s stock shot up by more than 5%.

Incidentally, Tesla also reported that it has delivered 25,000 vehicles, nearly half of which were Model X, in the first quarter of 2017.

Investors take it as a sign that Tesla can meet its growth targets ahead of the launch of its Model 3.

This is huge for Tesla, especially since Ford has been manufacturing cars since more than hundred years. Tesla is a new kid on the block.

Dave Sullivan, an analyst with AutoPacific states that with Tesla overtaking Ford “does not compute”.

He went on to add, “It’s mind-boggling that a company that has the global breadth and depth that Ford has is suddenly valued at less than or equal to Tesla,” said Sullivan.

According to Elon Musk, in 2018, after the launch of the Model 3, Tesla could produce up to 500,000 vehicles a year.

Although it is to be seen whether Tesla will reach that particular milestone, what this development denotes is that people are now seeing the Tesla brand as something lined with excitement and optimism. Good news typically translate to market action.

The fact that Tesla and Ford, have the ability to create a buzz-worthy brand in which investors have confidence to invest their money, only goes to underscore the dynamics of the similarities and the differences in the value system of the car industry.

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