Tesla Passes Ford by Market Cap Before Musk Delivers Model 3

Tesla market capitalization zoomed past Ford as investors bet Elon Musk can deliver on ambitious growth targets pegged to the mass-market Model 3 that will roll out later this year.

The electric-carmaker climbed as much as 5.7 percent a day after beating analysts’ estimates by reporting shipments of 25,000 cars and SUVs in the first quarter. Its market value is now at about $47.6 billion, $2.7 billion more than Ford. Tesla has supplanted Ford even though it delivered fewer than 80,000 vehicles globally last year, compared with 6.7 million from Ford, the second-biggest automaker in the country behind General Motors Co.

“I don’t know if people want electric cars, but people want Tesla,” Ben Kallo, an analyst at Robert W. Baird & Co., said by phone. “I’m not an Elon Musk worshiper, but people that would normally buy a Porsche are buying Teslas right now.”

Ford, which reported net income over the last five years totaling $26 billion, towers over Tesla on most metrics. Tesla lost $2.3 billion during the same five-year span. Revenue was $151.8 billion last year for Ford, compared with Tesla’s $7 billion.

“It’s mind-boggling that a company that has the global breadth and depth that Ford has is suddenly valued at less than or equal to Tesla,” said Dave Sullivan, an analyst at researcher AutoPacific Inc. “It does not compute.”

Tesla sold about 40,697 vehicles in the U.S. last year, according to an estimate by researcher IHS Markit. Ford delivers that many F-Series trucks about every three weeks.

Investors are looking far ahead to the Model 3, a sedan that will retail for about $35,000. Musk, Tesla’s chief executive officer, has predicted that with Model 3 in the lineup, the company’s annual production could soar to 500,000 by 2018.

“Tesla is valued like a company that has millions in unit sales, which it doesn’t. It took Ford 100 years to get to that point,” said Bloomberg Intelligence auto analyst Kevin Tynan. “Is there ever a future where Tesla sells 6 million units globally? Is there a future where Tesla earns money like Ford does?”