TSLA Tesla Inc

By Tim Higgins 

Tesla Inc., which overtook Ford Motor Co. as the second-largest U.S. auto maker by market value, continued its run Tuesday by eclipsing $300 a share for the first time and closing the gap with General Motors Co.

The Palo Alto, Calif., electric-car maker is on a hot streak with investors ahead of the introduction of Model 3 sedan, a mainstream electric car expected to be priced at $35,000 and roll out later this year. Tesla Chief Executive Elon Musk's success with the pricier Model S sedan and Model X SUV has helped make a case for the future of electric cars.

Tesla shares, just after 1 p.m. ET, were trading at $302.09, up 1.2% over Monday's close and equaling a $49.3 billion market value, according to FactSet. That compares to GM's $34.14 share price and $51.1 billion market value.

GM is currently the U.S. auto maker with the highest market capitalization, but still trails global heavyweights like Toyota Motor Corp.

Tesla on Monday surpassed Ford's market value, which stands at $45.2 billion. Disappointing sales announced by traditional auto makers on Monday were in contrast to Tesla reporting a record quarter on Sunday.

GM on Monday reported a modest sales gain for March, lifted by truck demand, and said Chief Executive Mary Barra earned $22.6 million, a decline of 21% from 2015 when she was awarded a sizable retention package. Ms. Barra, at the helm since 2014, has said her goal is to make GM the most valued auto maker in the world.

Mr. Musk faces huge challenges in accomplishing all that he is claiming to do -- including making 500,000 vehicles next year after building just 84,000 last year and creating software that would enable a vehicle to drive itself. Tesla sold 76,230 vehicles last year while GM delivered 10 million.

Mr. Musk's plans for the Model 3 were given a vote of confidence last week when Chinese tech giant Tencent Holdings Ltd. revealed it had taken a 5% stake in Tesla.

Tesla shares are approaching a $305 price target set by Morgan Stanley autos analyst Adam Jonas, who has said the value is based in part on the potential for the company to be part of future on-demand mobility services.

Write to Tim Higgins at Tim.Higgins@WSJ.com

(END) Dow Jones Newswires

April 04, 2017 13:57 ET (17:57 GMT)

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