Tesla, Inc became famous for its electric vehicles. Moreover, the company’s CEO Elon Musk is one of the most recognizable chief executives not only in Silicon Valley but in the U.S. as well.
Recently, a company founded by Musk reached a historic result. For the first-time history, Tesla Inc’s stock market capitalization surpassed the combined values of General Motors Co and Ford Motors Co.
On Wednesday, the electric car maker’s stock rose about 4% and reached a record high as the market capitalization jumped to $88 billion. Thus, its market cap became $2 billion larger than General Motors and Ford stock market values. GM’s market value is $49 billion while Ford’s market value is $37 billion as of January 8.
Tesla and its path to record high market cap
Several factors helped to drive the market cap and one of them is the third-quarter profit that topped the market expectations.
Furthermore, the company managed to speed up the process of car deliveries in the fourth quarter. Also, this year Tesla began delivering Tesla 3 electric cars built in Shanghai.
Tesla’s stock nearly doubled in the past three months.
Thanks to the factors mentioned above, Tesla was able to defy short sellers as well as other traders who were not confident in this company. They expected that GM and Ford would overtake Tesla.
Tesla outperformed its U.S. rivals even though they delivered more cars than Silicon Valley-based companies. For instance, GM, as well as Ford, produced more than 2 million automobiles, each only in the United States. Meanwhile, in 2019 Tesla delivered 367,500 vehicles around the world.
In the past 12 months, the shares of General Motors remained at the same level. Meanwhile, the shares of Ford gained 10%. The shares of both companies are underperforming. Furthermore, problems caused by falling car sales in China had a negative impact on investor sentiment.