Forget Motor City. Silicon Valley now owns the most valuable car company in the US. Tesla, the loss-making electric luxury vehicle maker, became the most valuable car company in the US. When US markets closed on Monday the manufacturer was worth $51.54bn to second banana General Motors’ $50.22bn after an upgrade by analysts at Piper Jaffray.

“We have driven a Tesla for seven months in preparation for this report, and after conducting investor meetings with the company last week, we’re finally ready to take a stand,” the firm’s analysts, led by Alexander Potter, wrote in a note to investors published Monday morning. Piper Jaffray now rates Tesla stock at an equivalent to “buy”.

Tesla’s soaring share price put it ahead of Ford just a week ago after the company’s stronger-than-expected results report. Tesla is currently 13 years old and controls 0.2% of the US market in automobiles; GM, 108, controls 17.3% of the market.

Tesla charges ahead to overtake Ford in market value Read more

While its share price may be soaring, there are roadblocks to Tesla’s further success – including the fact that the company has never made a profit – but the stock benefits from enthusiasm for the manufacturer’s design-conscious approach to electric vehicles and its emphasis on futuristic automating software, such as Autopilot and Summon.

The company has far fewer vehicles on the road than GM – billionaire founder Elon Musk promised to ramp up production to 500,000 cars in 2018, while GM sold 546,838 at US retail alone in the first quarter of 2016. Last year, Tesla’s total car production was 76,230 cars – about 40,000 in the US.

Musk’s larger-than-life persona has helped to push his company forward in the notoriously finicky market of luxury car companies. Tesla attracts customers more like fanatical devotees of Ferrari and Maserati – both of which it has surpassed in market share – than like the cautious consumer of a family sedan more likely to buy a GM auto.

And the business is growing rapidly: Tesla’s most recent report – the one that helped to goose the share price – demonstrated a 70% growth in sales, with 25,000 cars sold in the company’s first three months of the current fiscal year. GM, too, is growing, largely as a result of increasing truck sales, but more modestly.

None of that explains why Tesla is worth more than GM on paper. “I admire Tesla and @elonmusk,” wrote tech analyst Walt Mossberg on Twitter when the company overtook Ford in value earlier in April, “but this is the billionth example of why stock market valuations don’t reflect reality.”

GM has tried to thwart Tesla: according to the Indianapolis Star, the older firm pushed legislation in Indiana, home of the largest auto race in the US, the Indianapolis 500, that would keep the car company from selling directly to consumers rather than through more traditional showrooms and dealerships, which would require Tesla to either step selling cars in the state or radically increase its overhead.

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The company has hit speedbumps of its own, as self-driving software applications like Autopilot and Summon, both of which allow the car to accelerate, steer and brake without user input, have come under scrutiny in a number of crashes. Tesla has vigorously defended its software in the press, often by citing information culled from its consumers’ onboard computers in explicit detail, but it has also occasionally had to admit that those programs are fallible.

Still, none of those troubles have managed to slow Wall Street’s love of Tesla, for now.