Tesla has become the second most valuable carmaker in the world leaving behind Volkswagen. The company reached the milestone after it crossed the magic figures of $100 billion in market capital on Wednesday. Tesla dream run continued on Thursday putting chief executive Elon Musk in line for a big payday.
Tesla now only lags behind Toyota, which is the most valuable carmaker in the world. Tesla's shares have rallied since it announced a surprise third-quarter profit that saw the company crossing both its revenue and production estimates.
Tesla takes the lead
Tesla reached a market cap of $100 billion, eclipsing German auto giant Volkswagen's market cap of $99.4 billion. However, Japanese carmaker Toyota still is way ahead in the race with a market capitalization of $233 billion. That said, the $100 billion mark is a big achievement for Tesla given that investors and analysts till a few months back remained skeptical about Tesla's prospects in the long run.
Interestingly, Tesla is nowhere close to Volkswagen compared with its sales volume, manufacturing footprint and sales footprint. In spite of that, Elon Musk now comfortably sits on the top as the CEO of the world's second-most valuable carmaker. This shows the growing investors' faith in the company which till sometime back was struggling.
Tesla's dream run continues
Tesla has been having a dream run since it announced its third-quarter results, wherein the company surpassed both its revenues and production estimates. This has seen investors increasingly becoming bullish about the company's prospects.
Earlier this week, the company agreed to buy land at Gruenheide, outside Berlin, where it plans to build its first European Gigafactory. Moreover, the electric carmaker has so far put up a great show at China from where it has already started production and deliveries of its Model 3 cars.
The company broke ground in Shanghai only in January 2018 where it built its first factory outside the US in record time and followed it up with production and deliveries of the vehicle, both ahead of its deadline. Theoretically, Tesla is already more valuable than Ford and General Motors combined, making it the most valuable US carmaker. In 2018, the company's board had approved a compensation scheme for Elon Musk. If Tesla's rally continues, Musk could well go home smiling with a sizeable payout.