Last September Tesla’s market value briefly passed that of General Motors, America’s largest car maker, despite Tesla having made fewer vehicles in its lifetime than GM makes in a month.
Shares in the group have dropped by more than 21 per cent since. Nonetheless, investors have stuck by Tesla, hoping the company will lead the electric car revolution. As an honorary member of NATU, Tesla has clearly been identified as a technology powerhouse.
Tesla stock delivered a handsome positive return of 45.7% in 2017. These gains were much higher than the broader market and other mainstream automakers. By comparison, the S&P 500 Index yielded 19.4% returns, and outperformed traditional auto makers General Motors (+17.7%), Ford (+3%), and Toyota (+8.5%) in 2017.
Tesla’s high valuation has been repeatedly questioned by experts. Tesla has been listed on NASDAQ since 2010 so whilst debate ensues, the fact is the market values the company and as an investor you have the opportunity to buy into the trend or sell if you feel strongly that the company does not warrant such a lofty valuation.