Tesla is over 10 years old while Ford is 100 years plus old and the smaller and futuristic company Tesla has just overtaken Ford in terms of Marketcapitalization. In short, the returns on Tesla have far outweighed returns on Ford and this is a wake up call for Investors who are looking to invest for retirement and create a high pension income.
Typically advisors who are not able to see the future recommend so called safe stocks, such as Ford or Walmart. But actually these so called safe stocks are unsafe for investors, as they deliver no returns while stocks like Tesla and Amazon deliver returns that help secure retirement income. Next time an advisor tells you safe, ask pointed relevant question as this could mean zero returns that can unsettle your financial future.
Tesla – The Future of Automobiles
Technological innovation is what drives growth for stocks as any innovation in a particular industry or company has the potential to deliver phenomenal growth in terms of revenues and profitability thereby generating value for shareholders.
Tesla Motors, Inc. (USA) designs, manufactures, and sells high-performance electric vehicles and electric vehicle powertrain components. The Company owns its sales and service network and sells electric powertrain components to other automobile manufacturers. The earnings for the company are in the red zone but the niche area in which this company specializes and innovates its products always keeps the stock in the green zone.
The stock of Ford Motor Company has declined 6.37% on a year on year basis and 5.89% year to date. The stock of Tesla has gained 18.88% on a year on year basis and 42.12% year to date. Tesla has crossed the market capitalization value of Ford Motor Company even though sales and profitability figures are much lower in comparison. The market capitalization of Tesla Inc stands at USD 49.53 billion as compared to USD 45.24 billion.
Tesla delivered 25,418 vehicles in the first quarter of 2017, of which approx 13,450 were Model S and approx 11,550 were Model X. This was a new quarterly record for the Company and represents a 69% increase over the first quarter of 2016.
U.S. auto industry sales fell short of expectations in March as car sales continued to plummet. Automakers sold 1.56 million new cars and trucks in the month of March 2017 which is a 1.6% decline compared with the same month a year ago. In the US sales fell 7% for Ford, 5% for Fiat Chrysler Automobiles and rose 1.6% for General Motors. Sales rose 3.6% for BMW, 3.2% for Nissan, 2.6% for Volkswagen, 2.0% for Mercedes-Benz, but fell 0.7% for Honda, 2.1% for Toyota, 8% for Hyundai and 15.2% for Kia.
Ford sold 236,250 vehicles in the month of March 2017 representing a 7% percent decline compared with the same month a year ago. Ford’s decline was mostly because of a 17% reduction in fleet sales and a tough comparison to last year when it had the highest amount of fleet sales for the year. General Motors sold 256,224 new cars and trucks in the month of March 2017 representing a rise of 1.6% on a year on year basis.
The market is valuing the future for Tesla Inc higher than the current market value of Ford Motor Company because of disruption in traditional model of Automobiles. Technological innovation is what drives growth for this stock as each and every model launched in the market being electric in its operation is challenging the powerful petrol and diesel engines for rest all car manufacturers.The 14-year-old Tesla Inc. company is now worth more than the 113-year-old Ford due to disruption in the Automobile Industry. Such an innovation from companies like Tesla drives value in investing which can create long term shareholder wealth.
How have our Stock Picks Performed