Is Tesla Really Beating Out Ford and GM?

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Researched by Industrial Info Resources (Sugar Land, Texas)--Wall Street is showing lots of respect for Tesla (NASDAQ:TSLA) after first-quarter 2017 deliveries hit a record, topping 25,000 vehicles. The company looks like it's getting it together, showing signs of progress toward its production goal of 500,000 vehicles a year by 2018. Industrial Info is tracking more than $6 billion in active projects involving Tesla.

Tesla is pushing ahead with capital expenditures to increase its production capacity. The investment of $5 billion in the construction of the GigaFactory in Nevada, and the announced $1.5 billion expansion to its operations at its vehicle assembly plant in Fremont, California, will be critical to Tesla's production goal.

Market analysts are impressed by Tesla's overall performance, and the company's stock prices are benefiting: As of April 4, the good news has fueled a 7.4% rise in the value of Tesla, pushing it past $290 a share. On the same day, Ford and GM announced their March 2017 sales numbers: Ford sold 234,895 vehicles in March, and GM sold 256,007 over the same period. These numbers triggered a decline in the stock prices of the Detroit automakers, with Ford dropping 1.8% to $11.50 a share and moving even lower, and GM losing 3.2% to $34 per share. Is Tesla really doing that much better than Ford and GM?

Let's look a little deeper into the numbers. It's an apples and oranges comparison: The Tesla deliveries are for the first quarter of 2017, while GM and Ford numbers are only for March 2017. In Ford's case, the 234,000 cars sold do represent a decline of 2% from February 2017, and a drop of 7.2% from March 2016. The market analysts predicted Ford would be down only 5% over the year, so that extra 2% down is motivating the negative reaction on Wall Street.

GM's sales actually increased 1.9% in March 2017 and gained market share (up 0.3% to 16.7%). However, the analysts predicted GM would increase sales 5.5% in March, so the 1.9% was a disappointment, which was reflected in the stock price.

Tesla now has a market capitalization of $48.50 billion, surpassing Ford (NYSE:F) at $45.17 billion, and approaching General Motors (NYSE:GM) value of $51.12 billion. But caution is still prudent: Even at the 25,000 sales level, Tesla still lost $266 million in the first quarter.

And GM and Ford are working to stay competitive. GM has 19 active projects since 2016 to upgrade their facilities in the U.S., at a cost of about $7.14 billion, while Ford has 28 upgrades and expansions over the same period to the tune of about $11.94 billion. So they aren't going away anytime soon.

So how long will the investors be able to hang in there if Tesla doesn't actually turn a profit--and soon? Positive news is carrying Tesla for now, but they are not at the level of Ford and GM just yet.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.