Disruption can take some time to arrive, but when it does, you can sense the signals.
Tesla, a seventeen-year-old car maker, is now worth twice as much as Ford, a centuries-old car giant, after a spike in its stock price. Over the past few months, Tesla’s stock has been on a roll, rising from $255 in October to $443 over the close of the market on Friday. This has ensured that Tesla’s market cap has grown remarkably 73 percent over the past four months— with Tesla’s market cap now at $80 billion, it’s now more than twice the Ford’s $37 billion market cap.
Tesla’s stock has risen because for once Tesla has succeeded in addressing one of its most frequent bugbears— selling as many vehicles as it had expected. In 2018, Ford’s CEO had trolled Elon Musk to rejoice as Tesla delivered 7,000 cars a week, haughtily saying that in 4 hours Ford made that many vehicles. Yet things have changed since then— during the fourth quarter of last year, Tesla shipped 112,000 vehicles over the analyst estimates of 106,000 vehicles. There are 92,500 Model 3 vehicles and 19,450 Model S / X vehicles in Tesla numbers. Tesla delivered 50% more cars in 2019 than in the previous year.
Ford, on the other hand, has seen his stock stay steady over the past four months at the $9 mark, suggesting he’s losing out to the stock boom of Tesla. On his part, Ford tried to play catch up with Tesla on the market on electric cars. It invested $500 million for its battery technology in April last year in the electric truck manufacturer Rivian and announced its first all-electric car, the Mustang Mach-E, to be sold to the mass market in 2021 in November. Nevertheless, Tesla holds a commanding lead in space— Model 3 is now the world’s most popular electric car, selling three times as much as its closest competitor, China’s BAIC EU-Series in the first 11 months of 2019.
Electric cars, which only make up a small proportion of all automobiles, are widely believed to be the automotive future, and Tesla’s lead in the market has helped make it twice as successful as its centuries-old rival. In April 2017, Tesla’s market cap first exceeded Ford’s. At the beginning of 2018, the companies had been neck-and-neck, and since then, Tesla has been mostly in the lead. In April 2019, Tesla’s last eclipsed the market cap of Ford.