Tesla continues to prove the naysayers wrong. The short sellers, too. The California-based electric vehicle automaker currently has a market valuation of $161 billion. That's more than Ford, General Motors, and Fiat Chrysler combined. Last month, Tesla's valuation was worth more than just Ford and GM combined. Tesla's shares have soared 40 percent over the past two days and are now trading at over $900 per share. A few business quarters ago, they were at around $180 per share. What's going on here?
Despite critics and short-sellers' best efforts, Tesla is thriving and its current market rally could potentially last for at least several more days. The big question now is when will it slow down or will the bubble completely burst? The share surge really began kicking into gear when Tesla posted its fourth-quarter 2019 profits, registering some $7.38 billion in revenue, beating analysts' estimates.
This was in addition to the start of production for the Tesla Model 3 in Shanghai, China at a new factory built in only 10 months. Another factor working in Tesla's favor is that Model 3 production issues have been fully resolved for North America and Europe. Deliveries are currently underway and sales continue to be excellent. Furthermore, the new Tesla Model Y crossover is rumored to begin deliveries as soon as this month.
Originally, this wasn't supposed to happen until the summer. Tesla's battery partner, Panasonic, also just posted its first quarterly profit from its business with the car company. All the more amazing is that electric vehicles, in general, accounted for about 2 percent of all new vehicle sales globally in 2018 and 2019.
New competition from mainstream automakers, such as the Porsche Taycan and Ford Mustang Mach-E, will likely help entice consumers to ditch traditional combustion-powered vehicles for pure battery electrics instead. But Tesla still has a decade or so head start in EVs and has had plenty of ups and downs throughout. Lessons have been learned and fixes applied. The competition is only now starting that learning process.