This week, Tesla overtook Toyota as the top automaker when the company’s market value reached $206.5 billion. Toyota previously held the esteemed position with a $202 billion market capitalization.
Tesla, an electric vehicle pioneer, saw its shares reach a new high on Wednesday at $1,135 as its stock gained 5 percent. That milestone places Tesla as the world’s top automaker by valuation.
The sharp stock gains underscore the enthusiasm investors have for Elon Musk’s brainchild. Despite the stock doubling over the past year, Tesla has never had a profitable year, and in 2019, suffered an $862 million loss. Nonetheless, the stock has surged 170 percent as investor momentum seems unfazed.
And as Tesla exceeds Toyota’s market value, it lags behind the Japanese automaker on car productivity. As of March 31, Tesla’s production reached 103,000 vehicles, comprised mostly of Model 3 and Model Y vehicles. In the same period of time, Toyota’s vehicle production was 2.4 million.
As for as enterprise value, which takes debt into account, Tesla stands at $252 billion, while Toyota exceeds Tesla at $290 billion.
Some analysts say that although Tesla trading is over 300 times its yearly earning, the metrics don’t support it.
Jeffrey Osborne, a Cowen analyst, noted: “We continue to be cautious on Tesla, but anything EV-related is red-hot for investors now and there is a scarcity of ways to invest in the theme, thus we see the stock continuing to work near-term, despite our caution on competitive positioning over time and valuation.