Tesla Inc (TSLA.O) on Monday briefly became the most valuable U.S. car maker, reaching a market capitalization of as much as US$51.105 billion, higher than General Motors's (GM.N).

Helped by an analyst's recommendation, the luxury electric car maker's stock rose as much as 3.15 per cent to a new record high of US$313.73, and its market value was at one point larger than GM's, which was US$51.095 billion, before it dropped behind again.

Over the past month, Tesla has surged 35 per cent as investors bet that it and Chief Executive Elon Musk will revolutionize the automobile and energy industries.

Tesla's market capitalization is now equivalent to US$102,000 for every car it plans to make in 2018, or US$667,000 per car sold last year. By comparison, GM's market capitalization is equivalent to US$5,000 per car it sold in 2016.

Proponents believe Tesla will become a carbon-free energy and transportation heavyweight and they argue its valuation is reasonable based on long-term expectations for Tesla's growth.

They also point to opportunities from Tesla's acquisition last year of money-losing solar panel installer SolarCity and Tesla's Nevada battery cell plant aimed at driving down manufacturing costs.

"Even with all the risks, we think growth investors can't afford to ignore this stock," wrote Piper Jaffray analyst Alexander Potter in a report on Monday, upgrading Tesla to "overweight" from "neutral".

Skeptics believe Tesla's growth targets are unrealistic and that it is at risk of being overtaken by GM, Ford and other deep-pocketed manufacturers that are ramping up their own electric-vehicle offerings.

Jeffrey Gundlach, who oversees more than US$105 billion in assets at Los Angeles-based DoubleLine Capital, told Reuters last week: "As a car company alone, Tesla is crazy high valuation. As a battery company - one that expands and innovates substantially - maybe the valuation can work."

The Silicon Valley car company is rushing to launch its mass-market Model 3 sedan in the second half of 2017 and quickly ramp up its factory to reach a production target of 500,000 cars per year in 2018. Last year it sold 76,230, missing its target of at least 80,000 vehicles. By comparison, GM sold 10 million cars and Ford sold 6.7 million.