Despite record profits and significant efforts by the Detroit automakers in recent years to restructure operations and cut costs, Musk’s company remains on top, partially due to the launch of the Model Y in China.
Tesla’s stock rose 3.88% on Tuesday after Musk’s presentation at the company’s new Gigafactory in Shanghai – comparable to GM at $35.15 per share with a market cap of roughly $50.2 billion and Ford at about $9.25 per share with a market cap of about $36.7 billion as of Tuesday night.
“They caught their competition in the US just dead flat-footed,” Paul Holland, a general partner at Foundation Capital, said Tuesday regarding Tesla on CNBC’s “Squawk Alley.” “I don’t think it’s going to be quite the same in China … but nonetheless, terrific day for Tesla and well-deserved because they’ve innovated with a product that many of us love.”
Of course, market caps aren’t the only measurement of success. When taking into account equity, debt and cash, the Detroit automakers have significantly higher total valuations. Ford is worth the most with a total enterprise value of $154 billion, followed by GM at $132 billion, according to data compiled by FactSet. Tesla’s total enterprise value, including debt and cash, is about $92 billion, according to the financial data provider.
While Tesla celebrates its new Chinese factory, GM warned of continued challenges in China following a double-digit sales decline in 2019.
“We expect the market downturn to continue in 2020, and anticipate ongoing headwinds in our China business,” GM China President Matt Tsien said in a press release Tuesday.
Ford has not released its 2019 sales for China, which was expected to have experienced its second-consecutive sales decline last year amid the trade war with the US.