Tesla replaced Toyota as the world’s most valuable auto manufacturer, underscoring consumer excitement for a business seeking to reinvent an industry that has been dependent on internal combustion engines for more than 130 years.
Tesla’s shares, which have more than doubled since the beginning of the year, climbed up to 3.5 percent in intraday trade Wednesday, giving it a $207.2 billion market capitalization, surpassing the $201.9 billion Toyota’s.
Chief Executive Officer Elon Musk in the 10 years since taking Tesla public, selling cars online and manufacturing vehicles in high-cost California, has ignored or disrupted many of the standards and norms of the existing auto industry. Yet while the valuation of his company has grown, there is still a gap between his company’s size and the world’s largest automakers.
During the first quarter, Tesla manufactured 103,000 cars, or around 4 per cent of Toyota’s nearly 2.4 million, which based its brand on affordability and reliability backed by advances during large-scale manufacturing.
In January, when it surpassed Volkswagen AG, Tesla became the second-most successful automaker in the world. It is now worth more than twice the German giant.
Toyota was late in switching to full electric cars after pioneering gas-powered vehicles with the Prius hybrid, and wagered extensively on hydrogen fuel cells. The company is now making a number of high-profile EV and self-driving vehicle investments. The company has predicted an 80 percent decrease in income this year and aims to return it to pre-pandemic levels by the first half of next year.
Business value of Toyota covers the 14.3 percent of the shares owned by Toyota itself as a treasury reserve, worth around $30 billion. According to data collected by Bloomberg, Tesla doesn’t hold any treasury shares.
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