Tesla stock has stunned the stock market by overtaking the 115 year old company Ford in stock value. Tesla’s market cap was US$47.46 billion (AUS$62.5 bn) yesterday, whereas Ford’s market cap decreased to US$44.89 billion (AUS$59 bn). This sudden drop in Ford value is due to recent bad news announced by the company, which contrasted Tesla’s good news.
Tesla reported an increase in vehicle production and deliveries during the first quarter of the year. This pace shocked analysts, as the company grew at a faster rate than they had predicted. This is good news for the future of Tesla, as well as Tesla shareholders.
In contrast, Ford had some bad news to report, with a drop of 7% in sales last month and a product recall requested for their Ford F-150 pickup trucks.
However, although Tesla shareholders should be excited, this change doesn’t show the whole picture. Tesla are deeply in debt, having shipped out 76,000 vehicles last year. Ford still have the consumer confidence that can only be cultivated through providing quality products for over a hundred years. Millions of people trust the Ford brand around the world, and therefore the company can rely on this when sales slightly fall.
Although Tesla may not have the consumer confidence of Ford yet, it’s clear that the shift in value means that more people are starting to take notice of renewable energy and the impact that it can have on our planet.
As Tech Crunch noted: “Tesla’s strength comes from its sales pitch of delivering the best possible electric vehicles. Investors are clearly hopeful that Tesla will become a key part of the automotive future.”