The most valuable car company in the United States isn’t General Motors or Ford.
That crown belongs to Tesla Inc., which unveiled the first production Model 3 sedan on July 28. The all-electric automaker lost almost $700 million last year and delivered 22,000 cars during the second quarter of 2017—a fraction of the 725,000 cars GM sold during the same period.
Despite meager production, Tesla has a market cap of around $50 billion. Much of that value is derived from future potential—its expected position in a world where electric vehicles (EV) will rule the roads.
Faced with increasingly strict emissions standards, the entire auto industry is going electric. Top automakers such as Volkswagen, Ford, and Toyota have invested heavily in EV and battery technologies. Volvo announced last month that all of its new models would have electric motors beginning in 2019. Even Bugatti, manufacturer of the world’s fastest production car, admitted to Autocar magazine last month that its next vehicle would have to be a hybrid.
