SUMMARY: The market value of Tesla, the high-end electric car manufacturer, has surpassed that of American automotive giants like Ford and General Motors, both of which sell millions more cars than Tesla does. James B. Stewart of The New York Times joins William Brangham to discuss Tesla's brand allure and the state of today's auto industry.
WILLIAM BRANGHAM (NewsHour): Here are some head-scratching numbers to consider.
Tesla's market value is $50 billion, yet Tesla may lose nearly a billion dollars this year, whereas, combined, Ford and GM are expected to earn more than $15 billion. Last year, Tesla sold just about 80,000 vehicles. Ford and GM? They sold nearly 17 million.
James Stewart is a business columnist for The New York Times and a staff writer for The New Yorker, and he's here to help us understand why Tesla's value is skyrocketing.
James Stewart, welcome to the NewsHour.
You know these numbers very, very well. What is going on here?
JAMES STEWART, The New York Times: Well, these numbers are pretty amazing. They make no rational sense, really.
But Tesla is what I call the sort of ultimate story stock, which means investors care about the story. They don't care about the numbers. They do not care that it's losing. They have lost over $500 million last year, may lose a billion this year. And they don't really care that GM and Ford are making billions of dollars in profit.
The story with Tesla is that they are going to dominate the auto market, that they are going to create the world's safest car, that they are going to take over the battery market, and that they are going to dominate and reinvent the electric grid.
I mean, these are all huge markets, and they think Tesla is going to dominate every one of them.