Tesla has claimed the throne as the most valuable carmaker in the United States, marking the first time in the modern automobile era that the top company in the country is not based in Detroit.
Tesla's ascension to the top spot over General Motors comes just a week after it surpassed Ford in the market value rankings of American automobile manufacturers.
Tesla Overtakes General Motors In Market Cap
Tesla, based in Silicon Valley, overtook General Motors as the American carmaker with the highest market capitalization.
The shares of Tesla closed at $312.39 after trading on April 10, giving the company a value of $51.5 billion. The shares of General Motors, meanwhile, closed at $33.97, giving it a value of $50.2 billion and a spot in second place behind Tesla. In third place at a value of $44.6 billion is Ford, which Tesla recently surpassed.
Over the previous month, the stocks of Tesla have increased by 35 percent, backed by the belief that the company, led by founder and CEO Elon Musk, will be able to revolutionize not just the industry of automobile but also of energy. Late last month, Chinese social media company Tencent acquired a 5 percent stake in Tesla for $1.78 billion, opening up a path for Tesla into China.
"Tesla isn't just another company. More so than any stock we've covered, Tesla engenders optimism, freedom, defiance, and a host of other emotions that, in our view, other companies cannot replicate," wrote Alexander Potter, an analyst for Piper Jaffray in a report on the company.
The Future Of The US Automobile Industry
The rise of Tesla reveals that the automobile industry of the United States is now focusing more on electric vehicles and powerful software.
General Motors has been steadily increasing its profits and revenue, a mission that will be aided by the promise of President Donald Trump to roll back regulations and place car factories at the forefront of his plan to open up more manufacturing jobs to Americans. The automobile manufacturer has bounced back from its filing of bankruptcy eight years ago, but it seems that investors are not yet convinced with the direction of General Motors.
On the other hand, Tesla continues its explosive growth on the back of the notion that the future will see consumers moving away from diesel and gasoline in their vehicles and into electric batteries.
Tom Henderson, a spokesman for General Motors, downplayed Tesla's taking of the title as America's most valuable carmaker, stating that the company will instead stay focused on being able to deliver outstanding results, generate strong cash flows, and invest capital in areas that will lead to the highest returns.
Tesla, meanwhile, will not have time to rest on its laurels, as traditional automobile manufacturers are also releasing electric vehicles of their own. The company, which started out as Tesla Motors, was initially mostly alone in the luxury electric car market that it now dominates. Tesla is now on the verge of starting production for the Model 3, a mass market electric vehicle.
Tesla delivered a record 25,418 electric vehicles in the first quarter and is now looking forward to a weekly production of 5,000 vehicles by the fourth quarter.
