Categories
Headlines

Tesla market value passes Volkswagen to hit $100bn

One of the first China-made Teslas leaves the factoryImage copyright
Tesla

Tesla has displaced Volkswagen as the world’s second most valuable carmaker, after a dramatic rise in share price pushed its market value to more than $100bn ($76.1bn).

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

Tesla’s share price has more than doubled since October, when the firm reported a rare quarterly profit.

Shares rose 4% on Wednesday, making its valuation second only to Toyota.

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

This month, Tesla said it had delivered more than 367,500 cars last year – 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 a fraction of its competitors.

Volkswagen delivered almost 11 million vehicles last year, 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.

The company is due to report its latest quarterly results to investors this month.

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

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

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

Tesla was valued at about $550bn when the pay deal was approved.

Avatar

By Laura Price

Laura is the senior writer and Smartphones section editor responsible for managing software updates and smartphones section. She is very passionate about Gadgets & Technology and always looking around to use them in an innovative way in daily life. She reviews Gadgets & Applications to tell users about their optimum use to get the most out of in which they’ve put their time and hard earned money.
Email:[email protected]