Tesla becomes the world’s most valuable car maker

Tesla has become the world’s most valuable carmaker, surpassing Japan’s Toyota after its stock rose to a record high. Shares in Tesla hit US$1,134 on Wednesday before dropping before the close, leaving it with a market cap of $209.47 billion (£ 165 billion), around $4 billion higher than Toyota’s existing market value.

Shares in the electric car maker have risen since the beginning of 2020 as investors have started to feel more positive about the future of electric vehicles. That is despite the fact that its CEO, Elon Musk, wiped $14 billion off Tesla ‘s valuation in May after complaining that its share price was too big.

Last year Toyota sold about 30 times more cars and its sales were more than 10 times higher. Following years of losses, the Californian company has delivered three profitable quarters in a row and retained its momentum in the first three months of 2020 amid the coronavirus outbreak.

Although, Toyota remains a much larger business in terms of sales. The Japanese company sold 10.46 million vehicles in the year to March and posted revenues of 30.2 trillion yen ($281.20 billion).

Tesla ended up selling only $24.6 billion in 2019, shipping 367,200 vehicles last year. But investors are enthusiastic about the prospects of the US company, assuming that it will dominate the future demand for electric cars.

Analysts at the stockbroker Jefferies said the firm remained “significantly ahead of its peers in product selection, efficiency, and technology.”

Tesla is now valued around three times the combined value of its US rivals, General Motors and Ford. Musk said that Tesla will still produce at least 500,000 vehicles in 2020, despite the coronavirus pandemic rocking the economy.

SOURCE: BBC