Tesla Passes GM as Most Valuable Car Company in America

[cnxvideo id=”506325″ placement=”ros”]Just days after Tesla Inc. (NASDAQ: TSLA) eclipsed Ford Motor Co. (NYSE: F) as the number two car company based on market capitalization, it has passed General Motors Co. (NYSE: GM) to take the top spot with a market cap of $50.9 billion. GM sold just over 10 million cars worldwide last year. Tesla sold fewer than 100,000.

Tesla’s recent stock move was based to some extent to a new price target set by brokerage firm Piper Jaffray. Its new target is $368, up from a previous $223. Tesla’s shares currently trade at $309. Piper Jaffray also upgraded its opinion on the stock from Neutral to Overweight. In its comments, Piper Jaffray said that Tesla’s efforts will “have a captivating impact on consumers and shareholders alike; this advantage will be difficult to replicate.” Tesla’s shares would need to rise 20% to reach the new target.

While many investors question whether a company with such modest sales can carry such a huge market value, optimists say that founder and CEO Elon Musk’s forecast that he can sell 500,000 by the end of the decade is accurate. The upcoming Model 3 will be Tesla’s first foray into mid-priced cars. The first Model 3 is expected to be sold late this year or early next. It will be priced around $35,000, which will make it available to a large number of drivers in America and worldwide. Last August, Tesla had over 400,000 advanced orders for the new car.

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Tesla does have competition in the electric car market. Most recently, in the mid-market, GM launched the Chevy Bolt with a price point about the same as the Model 3. A number of luxury car companies, including BMW and Mercedes, are putting their financial, product development and marketing might behind their own electric car initiatives.

Tesla is also considered a leader in autonomous cars. Once again, however, the market is extremely crowded with other manufacturers and high-tech companies like Google.

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