Apparently one of the reasons Ford Motor Co. (NYSE: F) fired CEO Mark Fields was his lack of progress with electric and autonomous cars. Among the leaders in those industries, Tesla Inc. (NASDAQ: TSLA) is still presumed to be a major winner. Its shares are up 1,000% over the past five years and trade near an all-time high.
With a market cap of $51 billion, it is well ahead of Ford’s $44 billion. This is despite the fact that Tesla sold less than 100,000 cars last year, while Ford sold close to 6 million. Wall Street has put a huge premium on Tesla’s advances in technology and its claim it can sell 500,000 a year by the end of the decade. The release of its comparatively inexpensive Model 3, scheduled for later this year, should help. It will be priced at about $35,000. At one point last year, Tesla had nearly 400,000 preorders for the car.
Ford appointed turnaround artist and current head of Ford’s advanced car division, Jim Hackett, as its new chief executive. The market yawned and Ford’s stock price only advanced 2% on the news. It is down 16% over the past year.
Tesla is not without its critics, but they are nowhere near as numerous or vocal as Ford’s. Concerned investors and analysts believe that Tesla will face a swarm of competitors within a few years. Virtually every major car company has electric and autonomous car divisions. And all these manufacturers have huge marketing budgets, product development capacity and dealer networks.
Optimistic investors believe Tesla can stay several steps ahead of its competition technologically and that its brand will continue to attract consumers to what many believe is among the most cutting-edge tech companies in the world. Based on its stock price, the positive assumptions are more than enough to keep Tesla’s stock price momentum.