Tesla overtakes Toyota to become world's most valuable auto maker

Tesla overtakes Toyota to become world's most valuable auto maker

Fast forward a year and the shares are now priced at more than US$1,200. That's pretty underwhelming for a company whose fans view it as a fast-growing technology company in the mold of Amazon.com Inc., rather than a sluggish metal-bashing carmaker.

Ives noted that demand for Tesla's new Model Y SUV is also starting to increase in China. Chief Executive Elon Musk has already said that Tesla would deliver at least 500,000 vehicles in 2020, a forecast the company has not changed despite the coronavirus pandemic.

However, it remains to be seen how the long production pause in Fremont will affect deliveries in the third quarter. Such exuberance is hard to understand. In the first quarter of this year, prior to the full force of the pandemic, Tesla made more vehicles than it sold with 102,672 units produced, and 88,400 delivered. The Model Y is now in production in Fremont, California. It's shares trade on 147 times next year's profits, compared to the 13.7 times for rival Toyota from whom Tesla recently claimed the crown of most valuable automotive manufacture. The stock has nearly tripled this year.

Whether this has worked out will become apparent in a few weeks with the quarterly figures.

But many other Wall Street analysts are skeptical of Tesla. Senior staff kept heading for the exit. Toyota is valued at US$202 billion.

Analysts on average project Tesla will report a loss of about $1.80 a share on a GAAP basis for the quarter, according to data compiled by Bloomberg.

Tesla is leading the electric vehicle race because it has acquired expertise in high-powered battery technology. With the recent surge in the stock price, the company's valuation inched up to $224 billion making it the world's most valuable auto company. The firm set a price target of $650. Or perhaps the joke materialized in Musk's mind and he just had to share.

Last quarter Tesla actually came out with a surplus of about 14,000 cars, which look to have been put to great use to help smooth out the downtime that occurred in regards to production. He previously worked for the Financial Times.

Chris Bryant is a Bloomberg Opinion columnist covering industrial companies.

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