Electric vehicle maker Tesla outperforms the 35 largest automakers combined, according to Newsweek calculations.
Newsweek has contacted Tesla for comment via email.
Tesla’s valuation has seen a meteoric rise, following the US presidential election in November 2024.
The company’s shares soared after Election Day, buoyed by investors’ optimism about the new administration’s pro-policy option.
Its CEO, South African billionaire Elon Musk, is President-elect Donald Trump’s best friend.
Musk contributed heavily to the Republican’s 2024 election campaign and has been selected by Trump to serve in his new administration.
With a market capitalization of around $1. 46 trillion, it is more valuable than the next 35 automakers, which together have a total price tag of around $1. 42 trillion.
Next, Newsweek has visualized how Tesla’s existence compares to that of its competitors.
In North America, Tesla’s price exceeds that of the other two largest manufacturers, General Motors and Ford, whose market capitalizations amount to $59. 57 billion and $40. 02 billion, respectively.
The second biggest company on the chart overall was Japan-headquartered Toyota, with a market cap of $262.07 billion.
A financial expert told Newsweek that with its existing market capitalization, the market expects Tesla to specifically increase its profits in the future.
But unlike other giant corporations like Microsoft, Alphabet and Meta Platforms that have “network effects”, allowing the company to make higher profit margins, the automotive sector is competitive, which limits the ability to have profit margins. superiors, said Ritter, a finance professor at the University of Florida.
Ritter told Newsweek: “Tesla will most likely gain from the reversal of the Biden administration’s policies that favored unionized automakers. But it’s hard to see how those gains will be gigantic enough to allow Tesla to grow. ” and have annual profits after taxes. earnings of $75 billion or more, which would be necessary to give the company a price-to-earnings ratio of 20 and a market capitalization of $1. 5 trillion.
“So while anything may be possible in the short term, I expect Tesla stock to underperform in 2025 and beyond as the market becomes disappointed by Tesla’s inability to grow its profits to $75 billion. a year. “
The company’s CEO, Elon Musk, is expected to take over as head of the new Department of Government Effectiveness (DOGE) when Trump takes office on January 20, 2025.
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Joe Edwards is a Live News Reporter based in Newsweek’s London Bureau. He covers U.S. and global news and has a particular interest in U.S. and U.K. politics and social policies. Joe joined Newsweek in April 2024 after graduating from City, University of London with an MA in International Journalism. Prior to this, he studied History and English Literature at the University of Kent. Languages: English. You can get in touch with Joe by emailing [email protected]