Tesla vs. Toyota: Who will come out on top?

by | Jul 2, 2020

(Photo courtesy unsplash.com)

Tesla has officially overtaken Toyota to became the most valuable automaker in the world.

Telsa has never made an annual profit.

Tesla’s stock jumped to a new record high yesterday, giving the electric vehicle maker a valuation of more than $207 billion. It sounds like a lot because it is.

  • Tesla’s stock has more than doubled since the beginning of the year

To give you some perspective, Tesla is now more valuable than Honda, Ferrari, BMW, GM, Volkswagen, Fiat Chrysler, and Ford…combined.

But while Tesla may have exceeded Toyota on market value, it lags the Japanese automaker on actual car production. Tesla only produced about 103,000 vehicles in Q1. In comparison, Toyota made 2.4 million over the same three months.

The milestone is highly indicative of investors’ enthusiasm for Tesla’s potential. Electric vehicles are expected to dominate the auto market in coming years and Tesla, with its estimated 60% share of the US EV market, is in a very good position.

While investors have sent shares soaring, some Wall Street analysts believe the stock isn’t supported by the underlying fundamentals. “We continue to be cautious on Tesla, but anything EV related is red-hot for investors now. Thus, we see the stock continuing to ‘work’ near-term despite our caution on competitive positioning over time and valuation,” said Cowen analyst Jeffrey Osborne, reiterating his underperform rating on the stock.

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