Tesla overtakes GM to become the most valuable American carmaker

The electric carmaker overtook General Motors on the New York Stock Exchange this Monday. Tesla thus becomes the carmaker with the highest market capitalization in the US, surpassing $51.3 billion in equity on the stock market, while GM stands at $51.2 billion.

At the close of Monday’s trading session, Tesla’s shares rose more than 3% to reach a record high of $313.73 per share. The sharp rise followed the entry into Tesla’s shareholder base of Chinese technology company Tencent, which acquired a 5% stake in the American company. GM, meanwhile, stood at $34 per share. On Tuesday, Tesla closed with a loss of 1.18% at $308.71, and GM fell 0.35% to $33.92.

Last year, General Motors sold nearly 10 million cars, with revenue of over $166 billion. However, Tesla produced 84,000 vehicles and had a turnover of $7 billion. Yet the company began to climb on Wall Street thanks to a record number of 25,000 vehicles sold in the first quarter of 2017. These surprising figures have prompted criticism based on the sales numbers of both companies.

Responding to criticism of the company’s stock market rise, Tesla’s CEO, Elon Musk, wrote on Twitter that the company could be “absurdly overvalued” based on past shares, but that the share price reflects what it may achieve in the future. Furthermore, the CEO made clear that investors are betting on the potential of Tesla due to growing interest in electric cars.

For the moment, Tesla is the sixth-largest carmaker by market capitalization, behind Toyota, Daimler (Mercedes), Volkswagen, BMW and Honda. The firm is in the midst of an expansion phase with the launch of its Model 3 (a vehicle with a lower price than the rest of the range), a model that has recorded a large volume of orders since its unveiling and could help Tesla increase its value on Wall Street.