Tesla shares rise to record highs, leaving rivals behind

(Reuters) – Tesla Inc shares continued their meteoric rise on Thursday, scoring another record high and further widening the gap between the Silicon Valley electric carmaker and its traditional competitors in the auto industry.

Tesla shares rose to $ 2,290 in midday trading before leveling at $ 2,240, the highest price since the company was announced at $ 17 per share in 2010.

Tesla’s shares have risen more than 420% since the beginning of this year, making some retail investors millionaires.

While other automakers will be forced to invest billions to overhaul their internal combustion engine operations to produce car-powered cars, investors are confident that Tesla can make the shift from a niche automaker to a global leader in cleaner cars.

Tesla became the most valuable automaker in the world by capitalization when it took over former Toyota Motors Corp. on July 1. The company now accounts for 41% of the total market cap of a group of 12 of the world’s largest car manufacturers.

(Graph: market capitalization of Tesla stock rally dwarfs rivals Tesla stock rally cross rivals’ market cap – here)

Tesla produces only a fraction of the cars sold by established global automakers, many of which are considered growth engines for their local economies.

Japanese Toyota and German Volkswagen AG (VOWG_p.DE) sold 10.46 million and 11 million cars, respectively, in fiscal year 2019. That is comparable to the 367,200 cars Tesla delivered in 2019.

Tesla has said it would supply at least half a million cars by the end of 2020, less than 5% of Toyota and Volkswagen’s annual sales.

But Tesla survived outbreaks in the industry of the novel coronavirus pandemic and reported a second-quarter profit in July, clearing an obstacle that could lead to the electric carmaker’s inclusion in the S&P 500 index.