unilad
Advert

Tesla Is Now More Valuable Than The World’s Top Seven Car Makers Combined

by : Emily Brown on : 24 Dec 2020 10:47
Tesla Is Now More Valuable Than The World's Top Seven Car Makers CombinedPA Images

If you’re planning on starting a car company, maybe take some tips from Elon Musk, because Tesla is now more valuable than the world’s top seven car makers – combined. 

While online shopping and takeaways prompted a steady decline in most of our bank balances this year, Tesla has seen a notable rise, with a current market capitalization of $645 billion.

Advert

On Monday, December 21, the company joined Wall Street’s prestigious S&P 500 share index as its sixth-largest member after shares surged to a record high of $695 the previous Friday.

TeslaPA Images

Tesla stock increased partly thanks to a buying spree prompted by its scheduled entry into the S&P 500, because funds that automatically invest in members of the index bought roughly $90bn of stock in preparation, The Guardian reports.

The news comes just six months after the electric car company bypassed Toyota to become the world’s most valuable carmaker. Tesla’s shares climbed to more than $1,100 apiece in June, resulting in a valuation of $209 billion ahead of Toyota’s $205 billion.

Advert

As the year comes to a close, Tesla is now worth more than Ford, Honda, BMW, GM, Daimler, Volkswagen and Toyota combined, according to figures from Forbes.

Though it’s been a good week for Tesla, Vitali Kalesnik, partner and head of research in Europe at Research Affiliates, warned it could all soon come crashing down.

Elon MuskPA Images

Speaking to CNBC, Kalesnik explained that while Tesla is a ‘great company’, the stock has ‘very strong signs of being overpriced’ when considering its sales, car production numbers and other fundamentals.

Advert

Kalesnik continued:

When we’re looking at the types of assumptions that we need to justify these valuations, one would need very, very aggressive assumptions.

Tesla’s current valuation is in the bubble territory.

JP Morgan Analyst Ryan Brinkman shared similar concerns as he said in a research note, ‘Tesla shares are in our view and by virtually every conventional metric not only overvalued, but dramatically so.’

Tesla Model 3Wikimedia Commons
Advert

Earlier this week, Musk revealed he wanted to sell Tesla to Apple CEO Tim Cook ‘during the darkest days of the Model 3 program’. Cook reportedly ‘refused to take the meeting’, but it evidently worked out for Musk, as Tesla’s stock has increased in 2020 by more than 650% and by 800% over the last two years.

Tesla is yet to make a profit for a single financial year, and while some investors have echoed Kalesnik’s worries that the stock may be overpriced, its successful share price indicates the majority of people think it can deliver.

If you have a story you want to tell, send it to UNILAD via [email protected]

Most Read StoriesMost Read

News

Six More Cases Of New Omicron Variant Found In The UK

Emily Brown

Emily Brown first began delivering important news stories aged just 13, when she launched her career with a paper round. She graduated with a BA Hons in English Language in the Media from Lancaster University, and went on to become a freelance writer and blogger. Emily contributed to The Sunday Times Travel Magazine and Student Problems before becoming a journalist at UNILAD, where she works on breaking news as well as longer form features.

Topics: Technology, Elon Musk, finance, Now, stocks, Tesla

Credits

The Guardian and 2 others
  1. The Guardian

    Tesla joins Wall Street's S&P 500 share index

  2. Forbes

    Tesla (TSLA)

  3. CNBC

    Researcher says Tesla stock is too expensive and in bubble territory following Apple car report