Tesla beat Toyota to become most valuable carmaker in the world

Tesla Inc on Wednesday became the highest-valued automaker as its shares surged to record highs and the electric carmaker’s market capitalisation overtook that of former front runner Toyota Motors Corp. Toyota, the world’s second-largest single carmaker measured by output with annual production of more than 10m vehicles, was worth about $200bn on Wednesday after its Japan-listed shares fell 1.5 per cent to ¥6,656 ($61).

Tesla shares gained 5% in early morning trade to a record of $1,133, boosting the company’s market cap to $209.47 billion – roughly $6 billion more than Toyota is currently valued by investors.

Once debt is included, the Japanese group is still worth more, at $284bn compared with Tesla’s $207bn enterprise value, according to data from financial data provider Sentieo. The relentless rise of Tesla’s shares has baffled some analysts, with the company’s value soaring despite producing only 500,000 vehicles this year and scarcely making a profit.

The shares’ meteoric rise, up more than 163 per cent since the start of 2020, highlight growing confidence among investors about the future of electric vehicles. After several years of losses, Tesla has delivered three straight profitable quarters since the third quarter of 2019 and surprised investors with solid first-quarter deliveries despite the virus outbreak.

Chief Executive Officer Elon Musk has ignored or broken many of the established auto industry’s rules and norms in the 10 years since he took Tesla public, selling cars online and assembling vehicles in high-cost California. But while his company’s value has soared, there remains a gulf in the scale of his company and the world’s biggest car manufacturers.

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