It boggles the mind how a company that moved less than 7,000 cars in the first quarter is valued by the market at $25 billion, a figure that absolutely dwarfs the GAAP quarterly revenue of $621 million and net income of just $17 million. Keep in mind that the top-of-the-range Tesla Model S P-85 commands a $93,400 base price.
More surprisingly, Tesla's market value has tripled the past year. Why the sudden surge in value? Well, almost every country in the world offers government subsidies and tax incentives to electric vehicle owners. For example, Brits are offered a whopping £5,000 ($8,472) incentive by the government just for buying a brand new EV.
With governments around the world planning to increase EV incentives value, more and more motorists are encouraged to switch from internal combustion to electric drive. And we all know that a company with indirect financial aids from the government is an offer most investors find hard to refuse.