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Tesla Overtakes Volkswagen as World’s Second Most Valuable Carmaker

Elon Musk’s electric automobile-churning brainchild Tesla has overtaken Volkswagen with a sudden surge in share price pushing its market value over USD 100 billion (SGD 135.72 billion). 

The Tesla Model S. Image: Tesla

Second only to Toyota, Tesla’s sudden increase in share prices was driven by a rare declaration of profits at a quarterly earnings call. Its share price has more than doubled since.

That the decade-old new entrant has surpassed the long-time German automotive giant of 83 years is a milestone in the history of motorised vehicles. Despite setbacks in the manufacturing that have led to constant delays and other disruptions in recent years, Tesla has delivered more than 367,000 cars last year in 2019.

The company has also opened a factory in Shanghai, China, which investors hope will lead to a greater penetration of the Chinese market. 

The Tesla Cybertruck, unveiled 21 November 2019. Image: Tesla

At USD 102.66bn, Tesla’s market valuation towers over the former number two, Volkswagen at USD 89.68bn. General Motors (USD 49.88bn), Honda (USD 49.71bn) and Daimler (USD 48.29) follow closely in fourth, fifth and sixth positions.

However, Tesla has a ways to catch up with the world number one, Toyota. Currently valued at USD 230.95bn, it is more than twice that of Tesla. 

It also ships vastly fewer cars than its closest competitors. Tesla’s 367,000 cars sold in 2019 is dwarfed by Volkswagen’s 11 million. It also has never made an annual profit since its founding. The company has also never made an annual profit since its conception more than a decade ago.

Musk is slated to receive a USD 2.6bn compensation package should the USD 100bn valuation be sustained over the course of a month and across a six month average, in addition to milestones that have already been achieved, including attaining USD 20bn in revenue and earning USD1.5bn.

Ian Ling
http://uncommontragedy.com
Ian is the resident Tech Monkey and Head of Content at VR Zone. His training in Economics and Political Science is at the basis of his love for journalism and storytelling. A photographer by passion, and an audiophile by obsession, Ian is captivated by all forms of tech that makes enthusiasts tick.

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