Tesla reported losses of $121.3 million, or 78 cents a share in their quarterly reports in February, while CFO Jason Wheeler also decided to leave in April 2017. Still, Elon Musk confirmed that production of Model 3 will resume in July and reach production volume in September, helping fulfill a commitment of 5,000 Model 3 vehicles per week by the end of this year’s fourth quarter, raising it to 10,000 per week next year.
Nevertheless, Tesla’s losses, its ability to deliver and boost its cash reserves has helped Tesla max its market valuation and overtake its closest rival General Motor Co. to become the most valuable company in the US. On April 11, Tesla’s shares rose 3.3 percent, reaching a market capitalization of near $51 billion, which was $64 million more than that of GM. Tesla is just $1 billion shy of Honda, breaking into the list of the top 5 automakers in the world. Both GM and Tesla are competing for the crown of the best electric vehicle, as GM just released their Chevrolet Bolt, to compete with Tesla’s incoming Model 3 Sedan. However, there is still a difference over their balance sheets and financial performance, as Tesla might make a handsome loss of $950 million, while GM makes a big profit of $9 billion.
Considering Tesla’s current standing, it is ranked sixth biggest by market cap, yet still needs a long way to go while it reaches $172 billion worth of Toyota Motor Corp. Other high valued brands include Daimler AG, Volkswagen AG, BMW AG and Honda.
Regardless, many investors don’t feel Tesla deserve this high valuation and stock prices since it is primarily a battery company by design. Los Angeles-based DoubleLine Capital’s Jeffrey Gundlach, who oversees more than $105 billion in assets, said, “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.” Tesla wishes to sell 500,000 cars in 2018, while GM may top 10 million and Ford is expected to sell 6.7 million.