The automotive industry has a David versus Goliath story on their hands. One gave us the birth of the assembly line and the other has yet to make a profit. Tesla just overtook Ford Motor Company in terms of stock market value and the world doesn’t know what to think. Valued at $48.7 billion, Elon Musk’s innovative electric car company beat out Ford’s $46 billion empire.
News broke on Tuesday, April 4th when Tesla saw a 7% surge in market value. Last year the electric car manufacturer only delivered around 76,000 vehicles whereas Ford sold 6.6 million during that same time period. Even more astonishing is that Ford reported net income of around $26 billion over the past five years, Tesla lost $2.3 billion in the same period.
Now Tesla is even in striking distance of the most valuable U.S. automaker, General Motors valued at $51.3 billion. The market has a tendency to fluctuate, especially when it comes to new technology, so this could be short lived. However with the impending release of Tesla’s affordable Model 3 it could mean even more excitement on the horizon. The $35,000 compact sedan has the potential to open up an entirely new market for the innovative automaker. Furthermore, Elon Musk did say that the Model 3 is easier to manufacturer and able to be mass produced.
Tesla’s fourth-largest shareholder, Joseph Fath, a fund manager at T. Rowe Price stated, “The only thing that matters for the stock this year is Model 3,” http://n.pr/2nZw0Y9
Elon Musk worked feverishly last year to ensure his facilities can meet the rising demand for Tesla’s electric cars. They’re off to a great start this year but the some are still uncertain if
the manufacturer can deliver on promises.
Nearly every industry has experienced some form of disruption in the past decade and the automotive industry isn’t immune. Tesla did something incredible and set a new precedent for innovators around the world. It’s far too early to say whether Elon Musk’s gamble will pay off, but he made an impression that will surely last.
Whatever happens in the future with Tesla, they instilled the idea that innovation and a break from the norm could get people excited enough to invest. Even in conventional industries like automotive, if people see potential there’s now a chance to compete in the big leagues. The future is still murky for the Tesla’s revolutionary electric vehicles, but they’ve already made history.
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