Tesla: the $1 trillion company that doesnt make any money – Telegraph.co.uk

“We’re a Silicon Valley company,” he said. “Closer to Apple or Google than GM or Ford. I don’t think they can replicate that.”

Bob Lutz, former executive at GM, hit back, saying Musk underestimated how hard the car business was. 

“All Tesla’s shortcuts have failed,” he said. “They seem to hold the usual Silicon Valley view that the region is the sole repository of brainpower in the US and everyone east of the Sierras is a dim-witted dinosaur.”

In 2019, Tesla’s market cap of $53bn overtook GM’s $51bn. Today GM is worth $83bn and Tesla $1 trillion.

Sales ramped up from just a few thousand after floating to 35,000 in 2014, 76,000 in two years later, and is now on course for a million this year.

An environment of low-cost debt has helped finance expansion as well as a soaring share price, giving ready access to funds. Tesla’s current debt of $11bn stands far lower than market giants – Volkswagen, for instance, holds the most at $243.24bn, followed by Toyota with $220.23bn.

Some argue the company has established enough of a name to succeed. 

“It’s been successful at disrupting the market and forcing incumbent players to accelerate their electric plans,” says Ian Henry of AutoAnalysis. 

Musk, he adds, created a desirability around electric cars that others failed to do and established a “niche that it will retain”.

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