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Tesla investors buy the dream


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Tesla investors buy the dream

Investors are betting big on the future of electric car maker Tesla.

The company’s share price continues to rise and the total value of those shares now make Tesla worth more than General Motors.

That came just one week after its value overtook that of Ford.

Tesla’s Chief Executive Elon Musk and GM’s boss Mary Barra had an opportunity to discuss that on Tuesday as both were at a White House meeting of business leaders to discuss tax reform and infrastructure with President Donald Trump.

Tesla is not profitable but its share price has surged by more than a third in the last month based on long-term expectations for growth as Wall Street bets that Musk will revolutionise the automobile and energy industries.

Sceptics believe Tesla’s growth targets are unrealistic and that the company risks being overtaken by GM, Ford and other deep-pocketed manufacturers ramping up their own electric-vehicle offerings.

Jeffrey Gundlach of DoubleLine Capital recently told Reuters: “As a car company alone, Tesla is crazy high valuation. As a battery company – one that expands and innovates substantially – maybe the valuation can work.”

The company is rushing to launch its mass-market Model 3 sedan in the second half of 2017 and quickly ramp up its factory to reach a production target of 500,000 cars per year in 2018. Last year it sold 76,230 vehicles, missing its target of at least 80,000. By comparison, GM sold 10 million cars and Ford sold 6.7 million.