Tesla Surpasses Toyota As World's Most Valuable Automaker After Stock Price Surge
Do you believe the hype? Wall Street does.
Tesla garners its fair share of mixed headlines here and elsewhere, but down on Wall Street, things like concerns over quality control or the pearl-clutching at the actions of CEO Elon Musk are just bumps on the road to the future. The automobile of tomorrow is fully electric, Tesla is making them on a larger scale than anyone else, so its stock price should reflect that, right? Whether or not you buy it, Tesla's current market cap tells us that investors do. At $209.47 billion, Tesla was worth $6 billion more than Toyota on paper at close of trading on Wednesday, Reuters reports.
For some perspective as to why that's so interesting, we can compare the two company's revenue and vehicle production. In 2019, Tesla sold 367,200 vehicles and made $24.6 billion in revenue. In comparison, Toyota sold right around 28 times that amount of cars, at 10.46 million units. Their revenue was also far greater, with $281.20 billion by year's end.
And what makes this tremendous valuation even stranger is that this increase in Tesla's value has happened rather suddenly. Tesla has only recently begun to turn a profit inside the past three quarters, and its stock price has only really begun to pick up this year.
However, while all of that may be true, the 5 percent increase in Tesla's value this morning—which boosted its stock price to a record $1,133—means the California automaker is now worth triple the value of Ford and General Motors combined. And the company's quirky CEO Elon Musk claims that the trend of winning will continue this year, all despite the pandemic.
He says Tesla will meet its mark of half a million vehicles sold by the time January 1, 2021 rolls around, which would be the highest yearly sales for the company ever. And while there's far too many unknowns (and known unknowns) facing us over the next six months to tell whether that'll be possible, its stock price might not be one of them. Amid everything, investors are apparently still willing to pay more and more to own a bit of the future. We'll see what happens.
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