Tesla Motors Inc. (NASDAQ: TSLA) management says it builds the best electric cars in the world. A great deal of research supports that. However, it has begun to struggle to sell its cars, due in part to distribution problems and perhaps competition. With its brand value and technology, it might be a takeover target for a large global car manufacturer. One barrier will keep this from happening. Tesla has a market cap of over $27 billion.

The high market cap might come down some, but for the time being it is inconceivable that will happen quickly. That is true despite glaring weaknesses. Tesla only sold 7,785 cars in its most recently reported quarter. Non-GAAP revenue was $932 million, up 55% from the same period a year earlier. For the year though, Tesla forecast it will only sell 33,000 cars.

On the positive side of Tesla’s valuation measures, it will release a new car that will burnish its image. The Tesla S P85D will go from zero to 60 in 3.2 seconds. However, the car can cost well over $100,000, which does not make it a car for the masses. Founder Elon Musk has promised a car that will sell for closer to $40,000. He has told the press the release of the cheaper Tesla is likely several years away.

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While Musk waits those several years, other car companies will release, or have released, products they say are inexpensive Tesla competition. Among these are the BMW i3. On sale for under $45,000, the base model only goes about 100 miles and needs a small gas engine to go beyond that range. A more likely direct competitor is the Chevy Bolt from General Motors Co. (NYSE: GM). It will retail around $35,000. It is supposed to run close to 200 miles with just one charge. Since the car will not be on sale for two years, the claim is impossible to confirm.

Tesla’s greatest challenge is that all the big manufacturers want to cash in on its success and are rushing true electric cars to market. By the end of this decade, the market could actually be crowded.

As the market becomes crowded, Tesla may need a deep-pocket parent. However its market cap would have to shrink. Even if the figure falls by half, it would be about the same as that of Fiat Chrysler Automobiles N.V. (NASDAQ: FCAU), which has become one of the world’s larger car companies. Who wants to pay tens of billions of dollars for a company that does not sell 100,000 cars a year and may not be profitable for half a decade?

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