Tesla overtakes Toyota as the world’s most valuable automaker


Elon Musk’s electric car company Tesla has become the world’s most valuable carmaker, overtaking Japan’s Toyota, after its stock hit a record high.

Shares in the electric carmaker touched $1,134 on Wednesday morning before falling back, leaving it with a market value of $209.47bn (£165bn).

That is roughly $4bn more than Toyota’s current stock market value.

Tesla produced 103,000 vehicles in the first quarter, or about 4 per cent of the almost 2.4 million made by Toyota.

Morgan Stanley has downgraded an American electric vehicle and clean energy company Tesla to underweight from equal-weight amid China risks, Morgan Stanley’s $650 price target, trimmed from $680, suggests about 33% downside. Morgan Stanley analyst Adam Jonas downgraded Tesla (NASDAQ: TSLA) from Equalweight to Underweight with a price target of $650.00 (from $680.00). Goldman Sachs analysts downgraded Tesla Inc. after the stock overshot their price target and bumped General Motors Co. up to a buy on a brighter outlook for global auto sales. While Goldman analysts led by Mark Delaney remain positive on Tesla for the long term, recent price cuts and production challenges with the new Model Y crossover cloud the electric-car maker’s intermediate outlook. Morgan Stanley analyst comments "We're Underweight due to our concerns around China, competition, capital needs and near term demand. The RR skew for TSLA is consistent with an Underweight rating." “Among the many risks facing Tesla at this time, we would rank risks related to U.S.-China relations at the very top,” Jonas wrote in a note to clients. “Many investors we speak with describe Tesla as the ‘Amazon of Autos.’ But we’re asking: What if Amazon is the Amazon of Autos?,” Jonas wrote. The Morgan Stanley analyst said that among the risks to his latest call on Tesla, he may be underestimating the company’s longer-term China growth prospects. Separately, revenue from the company’s “internet of cars” network could drive better-than-expected margins, he added. Tesla shares traded at price 972.84 USD -5.09% at 12 Jun, 7:05 am GMT-4

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The phenomenal rise in the value of Tesla shares since the start of 2020 has been due to the fact that the investors have begun to feel more confident about the future of electric vehicles.

That is despite its founder Elon Musk having wiped $14bn off Tesla’s value in May after tweeting that its share price was too high.

Mr Musk has said Tesla will deliver at least 500,000 vehicles in 2020, a forecast the company has not changed despite the coronavirus pandemic.

After several years of losses, Tesla has delivered three straight profitable quarters since the third quarter of 2019 and surprised investors with solid first-quarter deliveries despite the virus outbreak.

Toyota’s market valuation includes the 14.3% of shares that Toyota itself holds as treasury stock, worth around $30 billion. Tesla doesn’t hold any treasury shares.


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