Tesla shares continued their meteoric rise this past week, scoring yet another record high and further expanding the distance between the Silicon Valley electric car maker and its traditional auto industry rivals.
Tesla shares rose to US$2,290 in midday trading before levelling out at $2,240, the highest price since the company went public at $17/share in 2010.
Tesla’s shares have risen more than 420% since the beginning of this year, turning some retail investors into millionaires.
While other car makers are forced to invest billions to overhaul their internal combustion engine operations to produce battery-powered cars, investors are confident that Tesla can make the shift from a niche car maker into a global leader in cleaner cars.
Tesla became the world’s most valuable car maker by market capitalisation when it overtook former front runner Toyota on 1 July. The company now accounts for 41% of the total market cap of a group of 12 of the world’s largest automakers.
Tesla produces only a fraction of the vehicles sold by established global car makers, many of which are considered growth engines for their local economies.
Japan’s Toyota and Germany’s Volkswagen sold 10.5 million and 11 million vehicles respectively during the 2019 financial year. That compares to the 367,200 vehicles Tesla delivered in 2019.
Tesla has said it would deliver at least half a million vehicles by the end of 2020, less than 5% of Toyota’s and Volkswagen’s annual sales.
But Tesla withstood industry-wide fallout from the novel coronavirus pandemic and in July reported a second-quarter profit, clearing a hurdle that could lead to the electric car maker’s inclusion in the S&P 500 index