Tesla’s market cap has grown to over one-third of the market cap of the three big auto regions not including itself. According to economists at Deutsche Bank, there are few reasons supporting this price action.
“Tesla is up +330% since March 18th, and over +760% since June 2019 when it was troubled by bankruptcy concerns. Just 2 weeks ago it surpassed Toyota to become the world’s largest automaker.”
“Tesla’s market cap ($287 billion) has grown to over a third of the combined market cap of the US, EU and Japanese auto indices. Since March, Tesla has added just over 8 Fords or 27 Renaults. In fact, Tesla is over 3 times the size of the ‘S&P 500 Automobiles and Parts’ sector, even though it’s not a member or in the S&P 500 (it would be the 15th largest).”
“According to our US Autos Analyst Emmanuel Rosner, Tesla’s overall share of the global autos market has grown from 0.1% in 2017 to an expected 0.8% in 2020 but remains minuscule. For context, VW is at c.14%. However, Tesla’s market share growth in its areas of focus has been particularly impressive, displacing many incumbents.”
“There are a few reasons for the stunning price action. Electric vehicles are seen as the future, ESG investing is growing, and Tesla is a darling of the Robinhood investment community. We see earnings next week.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.