Tesla CEO Elon Musk showed off his dancing to celebrate the launch of Model Y in China on Tuesday, but such a celebration is unlikely in Detroit. Tesla’s share price has almost doubled in the past six months. By the close of trading, Tesla had closed up about 3.88 percent, a record high above $469, with a market capitalization of about $84.6 billion, more than $2 billion less than the combined market capitalisations of General Motors and Ford Motor Co.
GM fell 1.93 per cent to $35.15, giving it a market capitalisation of about $50.2 billion, while Ford Motor Rose.com rose 0.98 per cent to $9.25, giving it a market capitalisation of about $36.7 billion.
While Detroit automakers have made huge efforts in recent years to restructure their businesses and cut costs, and profits have hit record profits, Tesla has won big praise from Wall Street for its unprofitable profits.
Musk congratulated the first Chinese-made cars on their delivery and traveled from the United States to Shanghai to attend the first delivery ceremony for the Tesla-made Model 3 to the public. At the meeting, Musk announced the official launch of the China-made Model Y project. Tesla’s share price continues its recent rally.
However, Musk’s dancing celebration of Tesla’s delivery of the Model 3 in Shanghai doesn’t tell the whole story. The Detroit carmaker’s overall valuation is much higher, taking into account stocks, debt and cash.
Ford’s corporate value is as high as $154 billion, followed by General Motors at $132 billion, according to data compiled by Factset. Tesla’s total business value, including debt and cash, is about $92 billion, according to the financial data provider.
Tesla’s celebrations in China come as GM announces its full-year sales results for 2019. GM’s retail sales in China exceeded 3.09 million units in 2019, down 15 percent from 3.64 million units in 2018, the data showed.
“We expect the overall market environment to remain challenging in 2020,” Matt Tsien, GM’s president for China, said in a press release Tuesday. GM will focus on improving its product layout, improving cost efficiency and laying a solid foundation for long-term growth in the Chinese market. “
Ford has yet to announce its sales in China in 2019. The company’s sales in China are expected to fall for the second year in a row last year because of the adverse effects of international trade tensions.