Motor City: The big news in the auto world was that Tesla topped the market value of General Motors. That means the car company that gets massive taxpayer subsidies is now worth more than the car company taxpayers bailed out a few years ago. Welcome to the world of crony capitalism.
On Monday, Tesla's stock closed at $312.39, which meant the startup electric car company, which sold a grand total of fewer than 80,000 cars last year, was worth more than GM, which sold 80,000 Chevy Silverados every eight weeks. (Tesla's market cap edged below GM's on Tuesday.)
Is this a case of irrational exuberance gripping investors? Or the electric car version of the 1990s internet bubble? Is the future of Tesla really that bright? We tend not to second guess the wisdom of the markets to get things right, at least over the long term.
But it's worth noting that whatever Tesla's growth potential, at the moment the company is heavily reliant on taxpayer support.