Tesla continues to make headlines after reaching the $100 billion market cap for the first time recently. Credit goes to CEO Elon Musk for steering the American automotive and energy company, which has now overtaken Volkswagen AG as the world's no. 2, most valuable automaker.
According to the Wall Street Journal, Tesla shares rose to 4.1-percent ($569.56) to boost its market cap to $102.7 billion. That said, Musk could be up for a major payout. After being granted by shareholders a compensation plan of roughly $55 billion, the 48-year-old top brass could earn a chunk of at least $346 million in options, CNBC reported. Of course, he needs to make sure that Tesla's market capitalization stays at the $100 billion mark and maintain its annual $20 billion annual sales or $1.5 billion in earnings before interest, taxes, depreciation, and amortization, after adjusting for stock compensation.
And while Tesla's stocks are hitting record marks, the same cannot be said for Volkswagen. Their shares fell to 1.19-percent in German trading, placing its market cap at around $99.6 billion. Volkswagen said it delivered almost 11 million vehicles last year, sales that also included its Audi and Porsche brands. Tesla only delivered 367,500 vehicles in 2019.
The fact that Tesla builds fewer cars compared to Volkswagen has become frustrating to carmakers. VW Chairman Herbert Diess is left pondering on the company's low valuation despite revealing in a presentation this month the company's accomplishments and financial targets.
Regardless, Diess feels that the company is not where it should be. He pointed out how Tesla is valued as a tech company, while Volkswagen is a car maker. Diess seems to be aware that he has to find a way to connect the dots for VW to be revalued higher.
Seeing how consumers have adapted to the electric vehicle shift, Volkswagen does have several electric cars set for launch. That includes the ID.3, a compact electric car that is expected to go on sale this summer.
As for Tesla, the recent developments are something to brag about. In fact, things seem to be falling into place. Channels are expected to widen with reports that Tesla has finally struck a deal to sell their vehicles in Michigan.
However, buyers will need to go through the motions of transferring the title if they want their Tesla titled in their home state. Hence, it may be a small victory in some ways but something that directs Tesla to potential added revenue.
