As the US share market closes, Australians are waking up to news that Tesla’s share price increased substantially overnight, leading to them now being the most valuable automaker on the planet.
Tesla ($TSLA) reached a new record high of $1,025.05 per share, adding +$84.38, a growth of 8.97% in a single day. This increase in share price helped raise the market cap of Tesla to US$190 Billion.
This makes Tesla the most valuable automaker, taking the top spot from Toyota.
The biggest motivator for the increase in value and share price today was a leaked email from CEO Elon Musk. The email accelerates plans to put the Tesla Semi into production.
Recently Musk had suggested on Joe Rogan’s podcast that the Cybertruck had to come before the Semi and Roadster. After today’s email, it seems Tesla will try and do both in 2021.
Building the Semi is a substantially different prospect that simply adding another consumer vehicle, this is the first product that targets the commercial market.
While the Semi will feature Autopilot and FSD features, the path planning for a Semi needs to be reconfigured to accommodate for low hanging trees, weight limited streets.
The acceleration of production for Tesla Semi is almost certainly a response to Nikola Motors who went public in the last week and received a 30 Billion valuation. This valuation is entirely based on future sales, with the company not yet shipping a single vehicle.
The transport, especially long haul freight industry is massive, worth hundreds of billions per year, so capturing even a slice of that could be a significant profit center for any truck maker. The economics of an EV change considerably, with ongoing costs of fuel (electricity) and maintenance, being substantially lower than diesel trucks.
It should not go without mention that Tesla, the most valuable automaker on the planet, only makes electric vehicles. They arrived at the top position with just 50,000 employees, a fraction of the 359,000+ at Toyota.
The company also has just 4 vehicles in production, each with a limited set of options. Tesla has taken this top spot in just 16 years, highlighting that 100+ year histories count for exactly zero in today’s market.
This should sound the loudest alarm bells to legacy auto, that the future is clearly electric and reconfiguring operations to ship EVs can not happen fast enough.
Having a valuation of $190 Billion gives Tesla access to cheap capital, should they need it. While Tesla have traditionally ramped products sequentially, Roadster, Model S, Model X, Model 3 and most recently Model Y, this time, this position would allow Tesla to financially run multiple vehicle developments simultaneously, then just need to manage resources.
Also just to clarify, there’s been a little bit of conjecture online about the validity of the leaked email, Elon has now clarified that it was indeed sent by him.
Bring on the Semi.