Why Tesla is now worth less than Ford? Because, Tesla’s stock price is falling and in doing so, has retreated on milestones it set last year. As of publication, the company’s value is less than Ford’s for the first time in a year. Investors in Tesla for the first time last spring. It felt to many like a profoundly important moment. Suddenly, Tesla was America’s most valuable automaker, almost as if Ford had passed the torch. But now, Ford has grabbed it back.
But now, GM has grabbed it back. At just under $51 billion as of Thursday’s close, GM’s market cap was almost $6 billion higher than Tesla’s. Why does the market now think that Tesla is worth less than GM?
What happened? Why Tesla is now worth less than Ford?
Tesla’s Model 3 is supposed to be the car that will transform Tesla from a boutique maker of high-end electric vehicles. For tech enthusiasts to a genuine mass-market automaker, one that builds cars by the millions year after year.
To get there, Tesla said it would create a super-automated production line faster and more efficient than any automaker had ever attempted. Musk compared the sophistication of this future Model 3 factory to a giant starship.
The upshot: Tesla may have a big problem of its own making
If Warburton is correct, Tesla has a big problem.
It has spent a fortune to build the Model 3’s super-automated assembly line at its Fremont factory, roughly double what a mainstream automaker would have spent to scale up to produce 5,000 vehicles a week.
If that line can’t be made to work,Tesla will have to tear it out and start over — if it can find the time, the money, and the humility to do so.
It’s possible that the time and money can be found, although the stock price will likely take a big hit if Model 3 production is set back by months. Finding the humility may be a larger challenge.