Tesla

For more than a century, the automotive industry has been a major component of the US economy, with its two major players; General Motors (GM) and Ford Motor Company dominating the market. However, this cornerstone of the US economy could be at the dawn of a new era, with the Tesla electric car manufacturer outstripping Ford and consolidating its position as the second largest automaker in the United States in terms of Market capitalization.

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• Founded in 2003 by prolific entrepreneur and inventor Elon Musk, Tesla is a child compared to others. Providing high-end electric cars in much lower quantities than its US rivals, the company has succeeded in consolidating its position as a player in the industry in the eyes of many investors and consumers, TSLA stocks, with a market capitalization greater than that of Ford and almost equal to that of GM.

• Although they are still considered market leaders, GM and Ford are at a crossroads, with more questions than answers about their future. The two companies continue to heal the wounds left by the crisis that hit the industry less than 10 years ago. Despite having gained much in efficiency since then, both manufacturers are torn between the traditional methods of doing business and adaptations necessary for the future of the automotive industry. Ford has even more reason to worry, as its stock price has fallen to its lowest level in five years, while GM shares show greater stability.

Larger does not always mean better

• Both GM and Ford have recorded significant profits in recent years, supplying millions of cars to drivers around the world - so how is it possible that Tesla, which lost some $ 675 million in 2016, The race? The answer is more about the direction the industry is taking than the current situation. Those who invest in Tesla and hold a major stake, are there for a long time, and look to the future.

• Despite the many advances and innovations in the automotive industry over the years, its basic product remains unchanged: a vehicle that uses fossil fuels and is driven by one person. But all this will soon change. With the technology giants Apple and Google both working on cars without drivers and alternative energy sources becoming increasingly popular, the industry could be completely transformed in the years to come. Even though GM and Ford are preparing for the transition, it is the much more modest and innovation-driven builder, Tesla, that is better able to adapt and could beat its massive and lethargic competitors in this race.

Will Tesla cross the finish line first?

• In the 1992 film The Experts, Cosmo, the character embodied by Ben Kingsley, states: "Nothing in the world, including money, rests on reality, but on the perception of reality." This is quite the case in this race between the three car manufacturers. The market capitalization of Tesla obviously does not reflect its current position in relation to Ford and GM, but rather it shows the direction that investors think it takes. Tesla sells almost all the cars it produces and, while GM and Ford have a stock of unsold cars, Tesla records prepaid bookings of hundreds of thousands of vehicles that Have not yet been delivered.

• And yet, it would be premature to think that Tesla is the undisputed winner. It is true that it is more flexible, faster and more innovative but its rivals centenarians know very well how to stay in the race. In addition, there is a fact that some people refuse to see: GM already manufactured and sold electric cars in 1996. It is true that the EV1 was abandoned after three years, but it illustrates the fact that the largest Manufacturer of the United States knew how to manufacture and deliver electric vehicles even before the creation of PayPal by Elon Musk.

Under the leadership of Musk, a true innovator, with an impressive market capitalization, Tesla is undoubtedly an attractive long-term investment option. But he is not alone in the race and if Ford and GM manage to make a perfect transition, they could still be considered winners in the years to come.