Electric vehicle manufacturer Tesla Inc has officially taken the title as the world's most valuable automaker.
The company achieved the milestone after the latest rally of its share prices on Wednesday, which sent its market valuation past the reigning title-holder, Toyota Motor.
In early morning trading on Wednesday, Tesla's share prices surged by another 5 percent to $1,133 per share. The rally sent the company's market valuation to around $209.47 billion, or $6 billion higher than Toyota's market value. The latest rally follows months of continued share price growth since the start of the year. Tesla's shares have more than doubled since January, representing the growing confidence of investors in the company's eventual rise to become the global leader in zero-emission vehicles.
In January, Tesla became the world's second-most valuable carmaker, after it overtook Volkswagen AG's market capitalization. Getting to this point was not an easy task for the company, which was only established at the turn of the century. During its first decade, Tesla had to deal with years of continued losses and near collapse. Its founder and CEO, Elon Musk, was often criticized for his wild ideas and strategies, which were outside the norm in the auto industry.
In 2019, Tesla finally realized three straight profitable quarters, raking in profits from the sale of its now iconic electric sedans. During the start of the coronavirus pandemic earlier in the year, Tesla continued to make deliveries of its electric models, with Musk unveiling new products and breakthroughs.
While Tesla may have overtaken Toyota in terms of market capitalization, the Japanese automaker still dwarfs Tesla in terms of production scale. In 2019, Toyota sold more than 10.46 million vehicles worldwide, generating revenues of more than $281.20 billion. In comparison, Tesla only sold around 367,200 vehicles during the same period, generating $24.6 billion in revenues.
Most investors are, however, unfazed by the immense gap in scale as confidence in the company's ability to become a future global powerhouse still remains high. Musk had stated that he plans to deliver at least 500,000 new vehicles for 2020. That number is expected to climb even further in the coming years.
While the company's prospects may seem bright, there is reportedly internal turmoil regarding Musk's continued leadership of the company. Several investors have recently expressed their intention of having Musk removed as CEO following the proposal of a controversial bonus deal that would earn the company's founder a record $55.8 billion. Voting on the issue is expected to take place at the company's annual general meeting, which was supposed to take place on July 7 but was moved to September.