Tesla overtakes Toyota as most valuable vehicle maker

Lawrence Kim
July 2, 2020

After yet another stock rally, Elon Musk's Tesla has just unseated Toyota to become the world's most valuable automaker.

Tesla shares gained 5% in early morning trade to a record of US$1 133, boosting the company's market cap to $209.5-billion - roughly $6-billion more than Toyota is now valued by investors. That figure puts its worth $6 billion ahead of where investors now have Toyota positioned.

That is roughly $4bn more than Toyota's current stock market value.

Tesla's rapid ascent points to increased investor confidence that EVs will ultimately capture a substantial share of the market, according to Reuters.

After years of losses, the United States firm has also delivered three profitable quarters in a row and it maintained that momentum during the first three months of 2020 despite the coronavirus outbreak. Indeed, even amid the coronavirus's pandemic aggressive spread, the marque was still able to turn out solid results as much of the global economy contracted dramatically.

Tesla (NASDAQ:TSLA) is up 3.05% to $1,112.61 and now trades with a higher market cap than Japanese automaker Toyota (TM -0.7%).

Toyota, one of the world's most profitable carmakers, sold 10.46 million vehicles in the year to March and reported revenues of 30,226 billion yen ($281.20bn).

Tesla, in comparison, ended 2019 with $24.6 billion in revenues, having delivered 367,200 vehicles a year ago.

If Tesla manages to turn a profit in the second quarter, it will become eligible to be added to the S&P 500 index, which would create vast demand for Tesla stock as passive funds and ETFs tied to the index would be forced to buy Tesla shares.

Other reports by Click Lancashire

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