Tesla market cap is US$ 1.3 Trillion in comparison to regular car manufacturer it’s ridiculously high
The world leader Toyota has like market cap of 45 billions and other big manufacturer reach similar value. The only exception being the other leading brand on electric car “BYD” with a market cap of 750 billions.
However, even assuming that Tesla stays the leader of electric car, how would it make it more valuable that let’s say Toyota. Especially now that “many of the person who can invest the price of an appartment in a fancy car” did switch to electric, and that the electric market needs to develop the cheap and compact urban car for middle-class person who can’t afford a car above 20 thousands euros (Because to be realistic the era of 10 000 EUR car is over)
I simply can’t understand how Tesla market valuation is so high
Established car makers have businesses that are easier to predict. They’ve been operating for a long time and you have a pretty good idea what “doing well” or “doing poorly” would look like for them. A much newer company like Tesla, which is based on emerging technology, does not have so well-understood of a future. There’s a lot more unknown about how big it might become.
Most times, this is seen as big unknowns and risk, therefore investors are wary. But Tesla has had enough real world success to be encouraging, yet is still new enough to enjoy “we don’t know how big this thing will get” speculation. Basically a lot of people think it’s a reasonable bet that Tesla will be huge in the future. Therefore their stock has high demand.