Almost 10 years to the date after going public, Tesla has claimed the title of the world’s most valuable automaker. The electric car company saw its market cap hit a new high of nearly $208 billion on Wednesday. It surpassed Toyota, which has a market cap of just under $203 billion.
Tesla’s impressive run hasn’t all been smooth. However, it reflects the fact that consumers are more interested in electric cars than ever. Likewise, it’s a signal that technology-filled cars attract consumers who might otherwise not care if it is electric or not.
It’s been a while since Tesla passed the valuations of both GM and Ford—impressive milestones in their own right. In January, the electric carmaker became the most valuable U.S. automaker in history with an $81.39 billion market cap.
Now, just six months later, it is still growing at a shocking rate.
Tesla saw its shares jump on Wednesday morning as the markets opened, rising more than five percent to a price of $1,134.51 before slowly coming back down. At the time of this writing, Tesla’s stock price is just over $1,120. Not only did Wednesday morning’s price help Tesla overtake Toyota, it also represents a 52-week high for the carmaker.
Notably, Tesla’s market value doesn’t match up with its global volume. In other words, it isn’t shipping more cars than Toyota or other manufacturers, the company is simply worth more to investors. That’s likely because the electric carmaker is poised to capitalize on the coming boom in electric vehicle (EV) sales like no other company.
Its recent figures show that demand for EVs is steadily increasing. Last year, Tesla shipped 367,500 vehicles. That’s a 50 percent increase over its 2018 sales. Largely, those numbers are supported by the much-cheaper Model 3. It opened up the possibility of owning a Tesla to millions more people. For comparison, Toyota produces about 10 million vehicles every year.
Tech Over Cars
So, how has Tesla gained such a massive market cap when it ships only a fraction of the cars that other manufacturers do?
In the eyes of investors, Tesla is more of a technology company than a carmaker. Likewise, markets are betting almost as much on its visionary CEO, Elon Musk, as they are the company itself.
Musk isn’t shy to break the rules of the auto industry. From selling cars online to manufacturing them in California to outfitting them with self-driving tech long before anyone else, Tesla is a disruptor in every sense of the word.
Thus far, not even the COVID-19 pandemic has put a damper on Tesla. Although it has had a few slowdowns and controversies, the carmaker has largely been immune to the effects the virus has had on the rest of the auto industry. Investors continue to gobble up Tesla’s stock and push the price higher.
In the days ahead, that isn’t likely to change. Tesla is planning to report its second-quarter delivery and production figures on either Wednesday night or Thursday. Should those numbers meet or surpass expectations another jump in its stock price might be on the horizon.