Tesla Displaces Volkswagen as World’s Second Most Valuable Automaker

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Tesla has overtaken Volkswagen as the world’s second most valuable automaker, after a dramatic rise in share price pushed its market value to more than $100 billion.

The milestone sets the stage for Tesla’s chief Elon Musk to collect billions in pay tied to hitting that target.

The company’s share price has more than doubled since October, when it reported a rare quarterly profit.

Tesla shares rose 4% on January 22, making its valuation second only to Toyota.

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Although Tesla has some way to go to catch up with Toyota, the Japanese car making giant has a stock market valuation of more than $230 billion.

Some analysts say the rise in price reflects Tesla’s performance in recent months, during which it has opened a factory in Shanghai and met its production goals.

In January, Tesla said it had delivered more than 367,500 cars in 2019 – up 50% from 2018. Investors expect the new factory to act as a springboard that will allow it to capture more of the Chinese market.

Despite the increase, Tesla’s sales remain small compared to those of its competitors.

Meanwhile, Volkswagen delivered almost 11 million vehicles in 2019, while Toyota sold more than 9 million in the first 11 months of 2019.

Tesla has also never made an annual profit and it is facing investigations after complaints about battery fires and unexpected acceleration.

Elon Musk’s company is due to report its latest quarterly results to investors this month.

If Tesla sustains the $100 billion valuation, it could unlock the first piece of a $2.6 billion compensation package for Elon Musk.

The plans calls for Elon Musk to receive payouts in shares over 10 years, with the first award contingent on the company reaching $100 billion in market capitalization and sustaining that value over both a month, and six-month average.

Tesla also had to reach $20 billion in revenue and earn $1.5 billion, after adjusting for items like taxes – thresholds the carmaker reached in 2018.

Tesla was valued at about $55 billion when the pay deal was approved.

Clyde K. Valle

Clyde is a business graduate interested in writing about latest news in politics and business. He enjoys writing and is about to publish his first book. He’s a pet lover and likes to spend time with family. When the time allows he likes to go fishing waiting for the muse to come.