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.

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.

David R. Evanson is a financial journalist in Philadelphia.

*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