Tesla is so insanely valuable because it’s the Apple of the car world

Tesla is so insanely valuable because it’s the Apple of the car world
Tesla is so insanely valuable because it’s the Apple of the car world

Tesla has become America’s most valuable carmaker, overtaking Ford and General Motors, despite selling significantly fewer vehicles than either of its rivals.

Elon Musk’s company shares are now worth around $312.39 at the time of writing, equating to a worth of $51.53bn. Comparatively, GM’s shares are valued at $33.97 with a total worth of $50.22bn, while Ford’s are worth $11.25 each – $44.6bn.

While it’s impressive enough for a automaker founded just 14 short years ago to unseat the 108-year old GM and 113-year old Ford, the disparities between the number of vehicles sold is even more mind-boggling.

Tesla CEO Elon Musk speaks during an event to launch the new Tesla Model X Crossover SUV on September 29, 2015 in Fremont, California. After several production delays, Elon Mush officially launched the much anticipated Tesla Model X Crossover SUV. The
Tesla chief exec Elon Musk speaks during an event to launch the new Tesla Model X Crossover SUV in September 2015 (Photo: Getty)

GM sold 10m cars during 2016, while Ford sold 2.6m. Tesla, meanwhile, sold just 76,000. Considering electric cars make up just a fraction of the overall car market, Tesla’s notorious price tag (I recently drove a Model S worth £68,500), and the fact the company is not even profitable, it seems remarkable Wall Street is putting such faith where the risks appear so high.

Yet it also suggests Wall Street is making assessments based on future promise, rather than historic success. US analyst Piper Jaffray said Tesla’s cars had a “captivating impact on consumers and shareholders alike,” adding, “In the minds of its customers, employees, and shareholders, Tesla isn’t just another company.

“Tesla engenders optimism, freedom, defiance, and a host of other emotions that, in our view, other companies cannot replicate. As they scramble to catch up, we think Tesla’s competitors only make themselves appear more desperate.”

By building up a dedicated fan base of early adopters and carefully generating a sense a Tesla car is something to aspire to, Tesla has taken its marketing cues from Apple – arguably the company with the strongest marketing and PR arsenal in the world – to present itself as the perfect vision of the future car. Environmentally friendly? Check. Future self-driving capacity? Check. Aspirational, good-looking and functional? Check, check, check.

The Tesla Model S in red (Photo: Tesla)
The Tesla Model S in red (Photo: Tesla)

Like Apple, Tesla has the elusive cool factor firms would lop off their right arm to cultivate. But that #cool #brand can only be built on products consumers are genuinely impressed by. Whether you love or loathe Apple, the iPod and the iPhone sent shock waves through the music player and mobile phone industries, and that savvy, expensive and streamlining redefinition of what is possible in a product is exactly what Elon Musk is hoping to achieve. Wall Street, for one, thinks it’s more than possible. Or at least until Apple gets its own car project into gear.

Who is Elon Musk?
BEVERLY HILLS, CA - FEBRUARY 22: CEO of Tesla and Space X Elon Musk attends the 2015 Vanity Fair Oscar Party hosted by Graydon Carter at Wallis Annenberg Center for the Performing Arts on February 22, 2015 in Beverly Hills, California. (Photo by Pascal Le Segretain/Getty Images)

Elon Musk, 45, is the South African-born mastermind behind SpaceX and electric car company Tesla Motors. Mr Musk also founded software company Zip2 and financial service X.com, which later merged with PayPal. He is currently waiting on approval from his shareholders to acquire solar power system provider SolarCity. With an estimated net worth of $11.5bn (£9.4bn), he is the 83rd wealthiest person on the planet, and has now set his sights on other galactic territories: namely Mars. The father of six envisions humans living on Mars from 2024, saying he wants to lower the risk of human extinction “by making life multiplanetary”.

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