Tesla Inc. replaced Toyota Motor Corp. on the podium of the world's most valuable automaker, highlighting investor enthusiasm for a company that has been looking to transform an industry that has relied on internal combustion engines for over 130 years.
Le Tesla shares, which have more than doubled since the beginning of the year, rose to 3,5% in intraday trading on Wednesday 1 July, giving the company a market capitalization of $ 207,2 billion, exceeding 201,9 $ billion of Toyota.
The largest market capitalization in the world with 96% less production than its biggest rival
CEO Elon Musk has ignored or broken many of the automotive industry rules and standards established over the past 10 years since he released Tesla, selling cars online and assembling high-cost vehicles in California.
But while the value of his company has skyrocketed, there remains an abyss in the size of his company and the world's largest car manufacturers. Tesla produced 103.000 vehicles in the first quarter, or about 4% of the nearly 2,4 million made by Toyota, which built its brand on convenience and reliability supported by innovations in large-scale production.
Tesla became the second most valuable automaker in the world in January when it overtook Volkswagen AG. It is now worth more than double the German giant. Tesla's escalation is proving impressive.
In May 2020 alone, the company was worth 141 billion. And in the past 12 months, the stock has jumped from $ 230 to $ 1.100. And the company does not stop in its race for innovation. Battery Day is scheduled for September 15, an event organized to formalize the characteristics of the accumulators of the future.
Investors believe in the electric future
After paving the way for gas electric vehicles with the Prius hybrid, Toyota was running late to switch to fully electric cars and has heavily gambled on hydrogen fuel cells. The company is now making a series of high-profile investments in electric vehicles and self-driving cars.
The manufacturer has predicted an 80% drop in earnings this year and expects that it may take up to the first half of next year before the auto market returns to pre-pandemic levels.
Toyota's market valuation includes 14,3% of the shares that Toyota itself holds as treasury shares, valued at around $ 30 billion. Tesla does not hold treasury shares, according to data compiled by Bloomberg.
As of this writing, Tesla shares (TSLA) are listed at USD 1.208,66, an increase of + 89,03USD (+ 7,95%). Toyota Motor shares (7203) are priced at USD 6.777,00, green with USD +121,00 (+ 1,82%).
This may be the best time to invest in long-term Tesla stocks. Musk's plans are many and ambitious, but we have seen how after the first initial and obvious difficulties, his foresight has been rewarded. It could be a boom in the next 10 years!
