Tesla Is Now Worth More Than Ford — Or Is It?

Credit: SeongJoon Cho / Bloomberg / Getty Images

Tesla market value reached nearly $49 billion yesterday, surpassing Ford's $45.6 billion. This news has more to do with the ups and downs in the stock market than each automaker's ability to produce cars that people want to buy.

But "optimistic" investors might want to take a step back. Tesla isn't even close to Toyota's $161 billion market cap, while it out-values Fiat Chrysler's less than $20 billion. In 2016, Tesla sold just over 47,000 vehicles in total. By contrast, Ford sold more F-series pickup trucks in January 2017. Car companies aren't all equal, in terms of size and value.

So is Tesla actually more valuable than Ford? That depends on your definition of value. Ford is a brand with 100 years more experience than Tesla, a slate of products that range from the Fiesta to the F-450, and an engineering and manufacturing presence the world over. Tesla is a Silicon Valley–based company that currently produces two fully electric models in relatively low volume, with plans to build a battery factory in Nevada and bring self-driving EVs to the masses. 

Investors may be hedging their bets on the long-awaited Model 3 sedan, the final piece of Elon Musk's so-called Master Plan. The smaller, less expensive Model 3 is expected to make the brand more accessible to the most people, and transform Tesla into a true mass-market automaker — that is, if it ever arrives. The Model 3 was first shown over a year ago and is not expected to reach series production until 2018 at the earliest. 

So this is not exactly an apples-to-apples comparison of the two companies' actual value. As we know from our own real-world testing, the lightning-quick Tesla Model S sedan and Model X "SUV" are innovative and exciting in their own right. But like Ford, or any other car company, Tesla faces challenges, including product recalls and safety concerns. As Tesla gears up to produce a mainstream Model 3 sedan, the market is going to pay close attention to everything Tesla is doing.