Tesla's market value overtakes Ford

Tesla chief executive Elon Musk launches the Model X

Tesla's market value has overtaken that of Ford after shares in the electric car maker added more than 7%.

At the close of trading Tesla had a market value of $49bn (£38bn), compared with Ford's value of $46bn.

Tesla's shares rose on Monday after the company announced record vehicle deliveries in the first three months of the year.

The firm delivered more than 25,000 cars in the first quarter, up 70% on the same quarter last year.

While Tesla's sales are growing fast they are still a fraction of Ford's, which sold almost 6.7 million vehicles in 2016.

Tesla delivered 76,000 electric cars last year.

"Magic dust"

However, investors are excited about the growth potential of Tesla.

This year it plans to start selling a cheaper car in the US, the Model 3, which it hopes will have mass market appeal.

"Five years ago no one knew what a Tesla was. Now people want a Tesla. It has usurped BMW as an aspirational car," said Ben Kallo, energy technology analyst at Robert W Baird.

Mr Kallo said that the charisma, or what he described as the "magic dust" surrounding Tesla founder and chief executive Elon Musk, allows it to attract talented staff as well as investors.

"Tesla has more going on in those four walls than we know about," he said.

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Meanwhile, Tesla has made a huge investment in battery production, building a $5bn factory in Nevada that when fully developed will be the biggest building in the world.

Mr Musk, hopes that by operating at that kind of scale his company can innovate faster and cut the cost of batteries by 30%.

As well as supplying batteries for cars, the plant makes batteries for homes and businesses.

In what was seen as a vote on confidence in the firm, last month China's Tencent spent $1.78bn on buying a 5% stake in Tesla.