Does it make sense that Tesla is worth more than Toyota?
For investors, yes, and at the end of June Tesla’s share value was 209 billion dollars, surpassing Toyota, which until then was number one in the world automotive industry.
Let’s look at a few numbers:
Toyota sold more than 10 million vehicles in the past year, and Tesla 360,000
Toyota billed $ 280 billion and Tesla $ 24 billion
Tesla is a company that until now has never given an annual profit, although it has had a few positive quarters; instead Toyota has been with positive results for many years
Well, despite that, Tesla’s stock market value surpassed Toyota’s. Surprising.
But what is valued on the stock market are the expectations of the future, and it is becoming clearer every day that the future of the car is electric, and there Tesla has the most technically advanced products.
Is that enough for Tesla to achieve such a high stock market value?
I think not, but I admit that I am not an expert in the field.
The electric car is here to stay and although Tesla is the company that sells the most electric cars, it is not at all clear who will take the lead in that market.
Toyota and others know how to make cars competitively (they have been making them for dozens of years) and are putting products on the market.
In addition to Tesla, other new manufacturers have appeared trying to gain a foothold for electric cars, but it is not clear who will be able to stay.
In the coming years, there will be ups and downs in the valuations of companies as they adapt to the market.
I think that the most important thing is not the market value of a company (which depends on exogenous factors) but rather its position in the market with the products it offers.
Admittedly, Tesla has been “groundbreaking and innovative” and has put good products on the market. But in the history of the automotive industry there were many companies that were leaders and today they have disappeared.
Staying ahead of this highly competitive and global market is very difficult; There are many changes to come and I am convinced that Toyota is going to be one of the leading companies for several reasons:
- They have the most efficient production system in the automotive world
- They have very good technology
- They have dominated the hybrid car sector for more than 15 years
- When you start selling electric cars in large quantities it shouldn’t cost them a lot to be able to offer good models of electric cars
Time will tell who dominates in that market.