Electric carmaker Tesla reached a new high on Wednesday when its share price crossed the $1,000 mark for the first time, surpassing Japanese carmaker Toyota's market capitalization. This makes Tesla the most valuable carmaker in the world. The company was already the most valuable carmaker in the United States after it surpassed General Motors in October 2019.
This certainly is a new milestone for Tesla and the news comes at a time when automakers across the world are reeling under pressure following the Covid-19 pandemic that kept plants shut for more than two months. Tesla's new milestone also coincides with reports of more workers testing positive in its California Gigafactory since it reopened in May.
Tesla on Fast Track
Elon Musk-owned Tesla's stock jumped almost 7.6 per cent to hit a record high of $1,011.65 thus taking its market capitalization to an intraday peak of a staggering $189bn. This briefly made Tesla the most valuable carmaker in the world. The jump in Tesla's share price was on expected lines given its performance over the past few months. The surge can be attributed to Musk's decision to ramp up production of Tesla's all-electric commercial truck Semi.
Although Toyota is still the number one carmaker, it won't take much time for Tesla to dethrone the Japanese car giant to the top. Tesla's worth is now more than General Motors, Ford and Fiat Chrysler Automobiles combined. Interestingly, Tesla is yet to turn in an annual profit. In fact, it registered a loss of $862m in 2019.
Great Year for Tesla
At one time, many had cast doubts over Tesla's potential to survive in the long run. However, Musk promised that the company would both surpass sales and production target in the third quarter of 2019. Tesla's fortunes started turning from that time. In January, Tesla emerged as the second most valuable carmaker in the world beating Volkswagen to the third position.
Since then, a lot has happened with Tesla becoming a darling of Wall Street. The carmaker announced a fourth Gigafactory in Germany and started deliveries of its Made-in-China Model 3 cars. Since then, Tesla's stock price has skyrocketed instilling investors' faith in the company.
The news of Tesla becoming the most valuable carmaker comes at a time when an increasing number of its workers are testing positive for the coronavirus. At least six Tesla employees have tested positive for Covid-19 in its California plant since Musk reopened the facility last month, initially violating President Donald Trump's stay-at-home orders. However, things were sorted out after local officials allowed Musk to go ahead with production at the facility. Also, a worker at its Buffalo, New York, plant has tested positive for Covid-19 after it reopened.