On April 3, electric vehicle manufacturer Tesla celebrated a significant milestone, as its market value overtook that of Ford for the very first time. Tesla delivered a record 25,000 vehicles in the first three months of 2017, sending shares in the company soaring. Ford, meanwhile, saw a 7.2 percent drop in its March sales, which in turn negatively impacted shares at the firm.
At the close of trading on April 3, Tesla had a market value of $49bn, while Ford was valued at $46bn. This historic valuation sees 14-year-old Tesla surpass industry stalwart Ford in value, suggesting that investors are betting on a greener future for the auto industry.
While Ford sold almost 6.1 million vehicles in 2016, US car sales are slowing to a plateau, sparking concerns over the future of the traditional auto industry. Demand for affordable electric vehicles is on the rise, with Tesla shedding its start-up label and beginning to emerge as a large-scale manufacturer. The company’s first-quarter sales have set a new record for the firm, with vehicle deliveries up 70 percent on the same quarter last year.
US car sales are slowing to a plateau, sparking concerns over the future of the traditional auto industry
This strong performance has ignited investor interest, with the stock market responding positively to the carmaker’s growth potential. Just last month, China’s Tencent purchased a five percent stake in Tesla for $1.8bn, demonstrating a vote of confidence in the pioneering firm.
The company has set itself an ambitious growth target for the next two years, aiming to deliver 50,000 cars in the first half of 2017, and 500,000 by the end of 2018. These targets may prove challenging for a company that has previously missed many of its sales deadlines, but Tesla’s strong start to 2017 stands it in good stead for scaling up its operations.
This year, Tesla plans to begin production on its fist mass-market vehicle, the Model 3. The vehicle will be significantly cheaper than the firm’s current offerings, aiming to make eco-friendly driving accessible to the average consumer. With founder and CEO Elon Musk ramping up production capacity at Tesla, the company could soon be competing with the industry’s biggest players.