Is Tesla Motors really worth almost half the value of GM?
Tesla's market capitalization was 46 percent of General Motors at the close of the market yesterday. GM has built over 450 million cars in its 105 years while Tesla has made about 25,000 over 10 years. Is Tesla over-hyped or is the market telling of future prospects?
Discussions of Tesla Motors sometimes seem couched in the terms of a religious tale: Tesla as David vs General Motors in the Goliath role.
One company is the plucky Silicon Valley electric-car startup that's never built a vehicle with a gasoline engine.
The other is the largest U.S. automaker, one of the three largest car companies in the world, the slayer of the EV1 (and then parent of the Chevy Volt).
What brings the comparison to mind is a recent comparison of the two companies' valuations.
At the close of the market on September 26, General Motors had a market capitalization of $54.8 billion.
Tesla's was $22,9 billion, or 42 percent of the larger company's.
GM has built more than 450 million cars over its 105-year life; Tesla is closing in on 25,000 over 10 years.
Many electric-car advocates view GM as an arch-villain that crushed all but a handful of 1,400 advanced EV1 two-seat electric cars--then got religion late by launching the Volt range-extended electric car less than a decade later.
On the other hand, some market analysts consider Tesla to be an overhyped company that will face serious challenges as it tries to stay profitable while growing an order of magnitude or more into a global maker that produces hundreds of thousands of cars a year.
Please note: Green Car Reports is not in the business of stock-price analysis or investment advice.
We don't have an opinion on the relative merits of the two valuations--except, perhaps, that Tesla being worth almost half of GM seemed newsworthy.
We've already noted that Tesla is worth more than Fiat, the Italian carmaker that controls (but does not yet own) Chrysler.
But we note that it's worth only 11.0 percent of Toyota's $209.1 billion, or 28.8 percent of Volkswagen's $79.4 billion, or one third of Ford's $69.3 billion.
But we're curious what you think.
Is the market ahead of general public awareness? That is, does it accurately value Tesla and its future prospects, given that the company has already achieved far more than most critics believed it could?
Or is Tesla's current market capitalization overly high, based less on the fundamentals of its financial performance than on hype, fad, and favorable media coverage?
Could the comparison simply be a reflection of the market's low assessment of the prospects for General Motors?
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