Tesla: The Odd 1 Trillion Dollar Company

Ashley | 01 - 11 - 2021
Tesla: The Odd 1 Trillion Dollar Company

Tesla’s market cap hit the 1 trillion-dollar company threshold in October 2021. Though it became the fourth American company on the list to reach this milestone, it is the only odd company on the list, and here is why.

1 Trillion Dollar Company

Apple was the first company to reach the 1 trillion-dollar company status. Apple, Microsoft, and Saudi Aramco are the only 2 trillion-dollar companies in the world. At present, there are only five 1 trillion-dollar companies and four of them are from America. 

Companies with Trillion Dollar Market Cap

Apple, Microsoft, Saudi Aramco, Alphabet (Google’s parent company), Amazon, and Tesla are the five trillion-dollar companies. Tesla reached this milestone following its announcement about Hertz’s agreement to purchase 100,000 EV’s from the auto giant.

Which Car Company Has the Largest Market Cap?
  • A. Volkswagen
  • B. Tesla
  • C. Toyota
  • D. Ford

Tesla Market Cap

Tesla’s market cap is at $1000 as of 2021. Tesla is considered an odd company because of its excessive market capitalization to the number of cars sold by it. At the same time, companies like Volkswagen, Toyota, and Ford have sold millions of vehicles. Yet, their market caps stayed within the 3 digit limit in 2020.

On the other hand, Tesla has sold around 500,000 cars while its market cap is staggering with 4 digits. An auto-analyst, Morgan Stanley raised the price target by 33%. Though Hertz’s order for 1000,000 cars is the biggest order the company has seen its entire existence, the valuation process adopted by Tesla is partially controversial. 

Trade researchers have explained that if Volkswagen or Toyota had taken up Tesla’s way of valuation, they would have reached 19 trillion dollars by now (Larger than the combined value of the elite one trillion-dollar company.). While the Tesla Market cap for Q3 has performed well than expected. The raise from $900 to $1200 by Stanley acted as an added advantage for Elon Musk.

Can Tesla Remain a 1 Trillion Dollar Company?

Tesla has forecasted increased sales and profit beyond the usual. Tesla will remain in the one trillion race if it can achieve its goals for the forthcoming quarters. External factors like economy, purchasing power, global events, etc., have an impact on this. 

Companies like Facebook, Berkshire Hathaway, TSMC, Tencent, and VISA are also closing up the 1 trillion-dollar company milestone as of 2021.

 

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