Growth at Tesla Trumps Safe Bets

Due to the recent torrid growth in Tesla (NASDAQ: TSLA) shares, the company has become the most valuable automaker in the United States. At the moment, Tesla is worth $93 billion,* with General Motors (NYSE: GM) and Ford (NYSE: F) trailing at $50 billion** and a middling $37 billion*** (respectively).

In 2018, Tesla had about $18 billion in sales and lost around a billion dollars. Surprisingly, General Motors made about $8 billion on revenues of $147 billion, with Ford netting $5 billion off of $152 billion in revenue.

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What does this tell you about how investors think? Based on our comparison, they will pay dearly for future growth. Tesla looks like it has the dominant position in a huge new market. Ford and GM look like their fortunes are tied to a market that may disappear, and to investors, that makes all the difference.

*Anonymous, (2019). Tesla: Consolidated Statements of Operations. U.S. Securities and Exchange Commission. Retrieved January, 2020
**Anonymous, (2019). General Motors: Consolidated Statements of Operations. U.S. Securities and Exchange Commission. Retrieved January, 2020
***Anonymous, (2019). Ford: Consolidated Statements of Operations. U.S. Securities and Exchange Commission. Retrieved January, 2020