Ford had a 100-year head start on Tesla, but Elon Musk’s company has caught up. With a market value of $53 billion, Tesla Motors overtook Ford ($45 billion) on Monday, and then passed up General Motors ($49 billion) on Tuesday.
Of course, the older car companies still sell about 100 times more vehicles than Tesla. They are also profitable, while Tesla loses millions of dollars a year. Even so, investors look to the future, and they’re banking on Tesla eventually taking the world by storm.
Why is Wall Street so smitten with a money-losing car company? Investors believe that electric cars with self-driving capabilities are going to become the norm — especially as Tesla is preparing to roll out its first mass-market car. It also doesn’t hurt that Tesla’s cars look cool, and that stock traders grow wistful and dewy-eyed when they see Musk’s face.
If the Wall Street crowd is correct, it would be good for everybody. A wholesale shift to electric cars would vaporize one of the most formidable barriers in the fight against climate change: getting cars to stop pumping greenhouse gas into the air.
This feels weird, but here’s one instance that it’s in the public interest to root for Wall Street.
This story was originally published by Grist with the headline The market has spoken, and it says electric cars are the future. on Apr 4, 2017.