Tesla Is Now Worth More Than Ford, And What It Means
When people say Tesla is worth more than Ford, they’re really only referring to its market capitalization. In short, Tesla’s outstanding shares x its stock price ($45.47 billion at the time of close on March 27th) is now more than Ford’s outstanding shares x its stock price ($45.35 billion). At the time of opening this morning, Tesla’s stock price was sitting at $277.02 while it finished the day yesterday at $270.22/share.
However, there are a few things to note in this situation rather than purely from a market cap standpoint. While Ford dipped slightly under Tesla’s position, Ford still sold 30x more vehicles in the USA alone than what Tesla has sold on a global scale. So how did Tesla do it? Well, it’s really not fair to compare the two because Tesla is no longer just an automotive company anymore.
Tesla has not been able to turn a profit for a full year, and they haven’t been able to deliver 100,000 vehicles in that time span. Other automakers, on the other hand, can deliver a million vehicles each quarter, and be profitable. Tesla will continue to sell cars – 90% of their revenue is from car sales – so that’s unlikely to change. So why is Tesla so highly valued – and what has it done to differentiate itself from other auto manufacturers?
Well, Tesla is slowly expanding its reach to encompass the energy process from start to finish. This means everything from power generation (solar cells) to consumption (electric vehicles) and everything in between (energy storage and charging). In current terms, this is akin to an auto manufacturer that has its own oil companies, refineries, and gas stations.
For Tesla, they’re betting big on clean energy. If they can nail down the process so that other manufacturers have to make electric vehicles because it finally makes sense for their bottom lines, Tesla is setting themselves up for quite a future.