Led by billionaire Elon Musk, Tesla Inc (NASDAQ:TSLA) has become America’s most valuable automaker, surpassing General Motors Company (NYSE:GM). Tesla is now the biggest carmaker in the United States with the market capitalization of $51.5 billion, followed by GM with the $50.2 billion market cap and Ford Motor Company (NYSE:F) with $44.6 billion.
Shares of Tesla have surged more than 46% year-to-date, making it the sixth-biggest carmaker by market cap, behind Toyota Motor, Daimler AG, Volkswagen AG, BMW AG and Honda. Toyota has the market cap of $172 billion market cap.
GM was able to beat Tesla with a plug-in Chevrolet Bolt having a price and range similar to Tesla’s upcoming Model 3 sedan. However, the more than century-old automaker “has failed to match the enthusiasm drummed up by its much smaller and rarely profitable U.S. peer,” according to a report from Bloomberg.
Bullish Tesla analyst Alexander Potter at Piper Jaffray Cos. said: “Tesla engenders optimism, freedom, defiance, and a host of other emotions that, in our view, other companies cannot replicate.” The analyst, who raised its price target on TSLA to $368 from $223 and upped its rating on the stock to “overweight” from “neutral,” added: “As they scramble to catch up, we think Tesla’s competitors only make themselves appear more desperate.”
General Motors Could Bounce Back
GM is expected to report more than $9 billion profit this year, while Ford is likely to earn adjusted profit of about $6.3 billion. Meanwhile, Tesla Inc (NASDAQ:TSLA) is expected to lose more than $950 million.
Commenting on the reports of Tesla’s beating GM to become the most value automaker in the America, Joe Hinrichs, Ford’s president of the Americas, said:
“Cash flow should determine what the value of a company is and our cash flow has been pretty good lately. At the end of the day, we run the business to serve our customers.”
In addition, GM spokesman Tom Henderson told Bloomberg that the automaker is “executing a plan to lead the future of personal mobility while delivering record profits, generating strong cash flow and investing in profitable growth.”
Tesla delivered less than 80,000 electric vehicles globally in 2016, compared to GM’s more than 10 million.
According to the report from Bloomberg, Tesla’s affordable Model 3 sedan, set to roll out later this year, “will be critical to his [Elon Musk] ambitions for Tesla to transform from niche carmaker into a mass-market manufacturer.”
Last week, Barclay analyst Brian Johnson said that bullish Tesla investor should not ignore several significant challenges faced by the company. He believes that Tesla will not get a smooth track when it comes to the self-driving cars. The company would face an increasing number of competitors in the electric cars market, according to the analyst.
On Tuesday, shares of Tesla Inc (NASDAQ:TSLA) were up 3.26% in the pre-market trading session.