Why Tesla’s stock is worth so much:

 

pexels-photo-38155Current Company Value on Stock Market (Market Cap.) Tesla: 60 B USD

Current Company Value on Stock Market (Market Cap.) Ford: 44.8 B USD

Tesla is an automobile company who sells electric cars that don’t run on fossil fuels, making them eco-friendlier. In 2016, Tesla sold 76’000 vehicles, whereas Ford, a gigantic automaker, is said to have sold over 2.6 million vehicles. Naturally, it would be logical to think that Ford’s value would be much higher since they are selling much more. So why is Tesla’s value so high?

Wall Street sees the future in electric vehicles like Teslas, not in “classic” cars like Fords. This means that they predict that Ford models will be overtaken by Tesla. Additionally, Tesla aims to be the Apple of cars. Apple only sells 20% of the world’s cell phones but makes almost all the profits.

Tesla has a reliable battery supplier, namely themselves, making them independent. Their innovative designs are beloved, they’re popular and are leading the pack in self-driving cars.

Tesla’s stock value has little to do with how much they sell: people see Elon Musk, Tesla’s CEO, as an inventor of the future. In Wall Street’s eyes, Tesla has unlimited potential and not Ford nor General Motors can compete with them.

 

Links I used/Further Information:

CNBC Timothy Lee

Motley Fool John Rosevaar

Stay tuned for more daily articles!

 

 

 

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