Tesla, the Calfornia-based electric car maker owned by business magnate Elon Musk worth $13.9bn, is now the most valuable auto company in the US.

Tesla has snatched the top spot from General Motors (GM), just a week after overtaking Ford in market value.

At the close of trading on Monday, the company was valued at about $64m more than GM.

Shares of Tesla jumped as much as 3.5 per cent in early morning trade on Tuesday, giving it a market capitalisation of $51bn.

Tesla is inching even closer to Japan’s Honda, the fifth-biggest carmaker in the world with a market value of about $54bn.

However, Tesla delivered 76,230 vehicles in 2016, below the 80,000 to 90,000 that Wall Street was expecting.

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By GlobalData

Tesla sold about 25,000 of its Model S and Model X cars in the first three months of the year, compared with 690,000 cars and trucks for GM and 617,000 for Ford in the US alone.

Technical problems and delays led to a 9 percent production decrease in the final quarter of last year.

But Musk has set a target of 500,000 vehicle sales by 2018 and 1m two years later to help quash any doubts.

Tesla also burns through a huge amount of cash. The company has spent about $10bn in research, development and capital expenditures since 2014, according to Morgan Stanley.

Its real profits compare poorly to traditional car makers. Tesla has recorded profits in only two quarters since 2003, Quartz reported.

GM expects to earn more than $9bn this year and analysts predict Ford will generate adjusted profit of about $6.3bn. Tesla, on the other hand is expected to lose more than $950m.

About 20 percent of Tesla’s shares are held by investors betting against the company.

However, Tesla offers something unique, attracting many investors who buy into Tesla’s potential.

“Tesla engenders optimism, freedom, defiance, and a host of other emotions that, in our view, other companies cannot replicate,” said Alexander Potter, an analyst at investment bank Piper Jaffray.

Efraim Levy, an analyst with S&P Global Market Intelligence agrees: “People are definitely enamored with Elon Musk and Tesla.”

Investors are also excited by the prospect of increasing Tesla sales in China.

The electric car market in China is the biggest in the world — in 2016, 351,000 plug-in vehicles were sold in China, both hybrids and pure electrics.  Just 159,000 were sold in the US, where electric cars make up less than 2 percent of the total  auto market.

Tesla is likely to turn to Wall Street in another big cash call as it gears up to launch its first mass-market electric vehicle, the Model 3 sedan, later this year. Priced at $35,000, it will cost half as much as the Model S, but is 20 percent smaller.

The Model 3 also boasts at least 215 miles (350 kilometers) of battery range per charge. The company said at least 375,000 customers have put down refundable $1,000 deposits on the car.