By Tim Higgins | The Wall Street Journal
As longtime automakers try to sell investors on their visions for the future, they keep hearing the same thing: What about Tesla?
Investors increasingly see the future of the car as electric—even if most car buyers haven’t yet. And lately, those investors are placing bets on Tesla Inc. to bring about that future versus auto makers with deeper pockets and generations of experience.
Tesla’s stock is up 91% this year through Friday. That rise has been attributed to Chief Executive Elon Musk showing some leadership stability and executing on some promises, including two consecutive quarters of profit. And also to trader over-exuberance.
But investors and analysts also say it reflects a view that the moment for electric vehicles is arriving.
Tesla, to a large extent, has become the purest proxy for betting on electric vehicles. Early on it ditched plans for a hybrid electric car—the kind of part-gas, part-electric half-measure favored by traditional auto makers for improving fuel efficiency. More than just selling an electric car, Mr. Musk has crafted an aura around Tesla with a stated mission of accelerating the world’s transition to sustainable energy.
The excitement around Tesla’s stock signals the market believes the company will be “the sole winner” in the move to electric vehicles, Brian Johnson, an analyst for Barclays, told investors in a note this month. He also compared the stock run-up with the overvaluations of the tech boom of the 1990s.
When Tesla on Thursday announced it would issue new shares to raise more than $2 billion, shares rose more than 4%. The money gives Tesla more financial muscle to fund models and factories.
Meanwhile, top executives at rivals such as General Motors Co., Ford Motor Co. and Fiat Chrysler Automobiles NV in recent days have faced pointed questions about the Silicon Valley electric-car maker as Tesla’s market value continued its meteoric rise