Tesla is now the second most valuable automaker in the US

2017 Tesla Model X

2017 Tesla Model X

The almighty stock valuation reigns supreme for a lot of folks when it comes to determining the value of a company. That’s because, well, that’s how you can apply an actual monetary value to a company. Gather up all the shares, sell them, and see how much you get. For Tesla, that value is around $49 billion, which is enough to push the electric-car builder into the second position for U.S. automakers.

According to Reuters, Tesla [NSDQ: TSLA] saw its mid-day trade price run to $301.74 on Tuesday. That was enough for a market capitalization of $49.1 billion and also enough to edge Ford [NYSE: F] out of that number two spot. Tesla still trails General Motors [NYSE: GM], however, which has a slim lead with a market valuation of $51.1 billion.

This rise in stock price and company valuation happened when Tesla posted is first-quarter sales numbers. Tesla moved 25,000 vehicles in the first quarter of 2017, which is a record for electric vehicle sales. That’s a strong number and it should start getting even stronger when Tesla finally starts producing and delivering its upcoming Model 3. Still, it’s a bit surprising if you view Tesla strictly as an automaker.

Ford had more than 150,000 retail vehicle sales…in March alone. Yet Tesla stock continues to soar because of what it’s able to do on a smaller scale with a very targeted market of dedicated enthusiasts. Tesla is producing expensive vehicles that run on nothing but electricity. If you compare Tesla’s sales to that of a traditional automaker, the stock price makes zero sense. If you step back and realize how impressive it is to sell 25,000 expensive, electric vehicles in one quarter, it starts to make a bit more sense.

Still, a lot of this stock valuation rides on the notion that the Model 3 is coming soon and will be able to be delivered in large volumes. We shall see if that happens, how much Tesla ends up selling it for despite its promised $35,000 starting price, and any quality issues the company might have in ramping up production.

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