Tesla becomes the most valuable automaker in the world

Andrew Cummings
July 2, 2020

Tesla has become the world's most valuable carmaker, overtaking Japan's Toyota, after its stock hit a record high.

However, with debt included, Toyota is still worth more at US$284 billion (RM1.22 trillion) compared to Tesla's US$207 billion (RM887 billion) enterprise value, according to financial data provider Sentieo.

The Tesla takeover of the car industry highlights investors' shift to rewarding technology-focused auto manufacturers that develop electric-powered vehicles and focus on software development.

After years of losses, the USA 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. Tesla, in contrast, sold 367,200 vehicles during the same period and took in $24.6 billion in revenue, a difference of more than $256 billion. That's way ahead of any other auto business and almost double the multiples by tech giants such as Amazon, the Financial Times reports. For fiscal year 2019 (which ended on March 31 of this year), Toyota sold 10.46 million vehicles, generating $281.20 billion in net revenue.

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 huge demand for Tesla stock as passive funds and ETFs tied to the index would be forced to buy Tesla shares.

However, while all of that may be true, the 5 percent increase in Tesla's value this morning-which boosted its stock price to a record $1,133-means the California automaker is now worth triple the value of Ford and General Motors combined. The electric automaker is set to report its second-quarter delivery figures later this week, which could indicate whether it's on track to reach its forecast of at least 500,000 vehicles for 2020.

This story has been published from a wire agency feed without modifications to the text.

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