When it comes to cars, there's one company that has certainly created a stir: Tesla. They've had their controversy and downfalls through the past year, but it looks like Tesla is overtaking Japan's Toyota and becoming the world's most valuable car manufacturing company.
And this shocking news comes during the same week that marks the 10th anniversary of the company's stock market entry. Shares in the electric car market reached $1,134 on Wednesday, leaving Tesla with a $209.47 billion dollar market value. This is approximately $4 billion dollars more than Toyota's current stock market value. Since the opening to 2020, Tesla's shares have increased rapidly, as investors started to have more faith in electric vehicles' future.
Surprisingly, Tesla's increased value occurred even after founder Elon Musk wiped $14 billion dollars off Tesla's value this last May. You may remember the infamous Tweet that read, "Tesla stock price is too high imo [in my opinion]."
With that single tweet, the company saw its stocks decrease impressively. But that was the only thing he tweeted. Along with that tweet, he released a series of bizarre and unsettling messages, especially for investors. Most likely, out fear, it caused investors to make panic sales.
But after suffering years of losses, the company is finally seeing a comeback after three profitable quarters in a row, and have been able to maintain momentum during the rough times in 2020 due to the coronavirus outbreak. If the company continues to profit through the fourth quarter, this will be the first time Tesla has been profitable for four straight quarters.
Toyota trades on a multiple that values the business 16 times its actual earnings, but for Tesla, it's share trades 220 times the company's profits, which makes it above any other automobile company on the market today. It even outdoes tech giants, including Amazon.
Toyota's shares have fallen over 12 percent since February and was even forced to close various factories and showrooms around the world. In May, the company stated that operating profits would potentially drop 80 percent and warned the decline in sales was going to be "bigger than during the Lehman crisis." Glocally, due to the pandemic, car sales are expected to decrease by 15 percent this year, though the demand for electric cars in Europe and China are on the rise.
Tesla's current success is largely attributed to its non-traditional industrial style, as they have detached themselves from the industry. And that has seemed to greatly pay off, at least for now. Analysts at the stockbroker Jefferies said Tesla is "significantly ahead of peers in product range, capacity and technology". And it looks like that's right.
As of now, the company is worth approximately three times the combined value of US rivals Ford and General Motors. In 2020, Elon Musk said Tesla will deliver 500,000 electric vehicles to buyers, and that shows even in dark times, the company is seeing the light.