In a feat that most considered impossible till very recently, Tesla has now surpassed Japan’s Toyota, to become the most valuable auto maker in the world. Elon Musk’s electric vehicles company now holds a market cap, just north of $185 billion, almost $7 Billion more than Toyota’s. Toyota is in second place, with $178 billion market cap. With Elon Musk’s habit to achieve all things impossible, this shouldn’t really come as a surprise.
Tesla had already overtaken German automaker Volkswagen for the second-most valuable carmaker label in February. Volkswagen currently occupies third place with $85.53 billion market cap. Tesla’s profits are now double compared to those of Volkswagen.
Tesla’s stock surge was in expected lines given its performance in recent months when the carmaker has been rapidly climbing up the ladder to the top.
The sudden surge in Tesla’s value is largely being attributed to Elon Musk’s decision to ramp up the production of his Tesla Semi-commercial truck. Moreover, Tesla’s stock and sales figures have continued to rise in China, the worlds largest automotive market, thanks to rising production rates. Developments in battery technology and rumours of an upcoming million-mile capable battery pack have helped the electric automaker’s stock price soar in the past months.
A big reason for these financial upticks, is Tesla Model 3’s continued domaination of the EV industry. The car was the best selling electric vehicle in China in May, selling over 11,000 units during the month. Model 3 was quite popular in other countries like the United States as well. In addition to this, the company’s foreign presence is also improving day by day. Tesla started production in its Shanghai factory and has started construction of its Berlin factory. Some rumours have even suggested that a new production plant will be built somewhere in the United Kingdom.
Ironically, Toyota had invested around $50 million in Tesla 10 years ago when the company sold its facility in Fremont, California to Elon Musk. Toyota later went to sell its Tesla shares and made a profit.
Furthermore, Tesla does so much more than just build sustainable vehicles. Tesla has become a leader in energy storage and solar solutions, something that no other carmaker in the world can say. While car companies continue to chase after Tesla’s industry-leading efficiency and technology, “its focus remains on accelerating sustainability as a whole, and not just through vehicle manufacturing.”