Tesla Inc. Makers of Electric vehicles jumps to number 2 in the automobile

Washington: Tesla Inc., makers of only electric cars since the last 12 years, has jumped to number 2 in the automobile sector companies. Tesla Inc. Shares registered an increase of 4%, in the transactions on Wednesday, taking the company’ market capitalisation above $100 billion. Tesla Inc. is the first electric car maker to reach this level.

Tesla Inc., promoted by Elon Musk, whose dream is seeing electric cars running on each of the world’s roads, was listed on the stock market in 2010. Thereafter, in just seven years valuation of Tesla Inc. jumped to $50 billion with sales of more than 250,000 cars. It is said that Tesla Inc. has sold more than 1 million cars, by the end of 2019.

The automobile sector has been hit by recession since the year 2018. There is an atmosphere of recession in most of the leading economies of the world, because of the US-China trade war and this has directly hit the automobile sales. In 2017, 95.2 million cars had been sold. Analysts in the automobile sector informed that in 2018, this number came down to 90.3 million units.

The electric car is the emerging technology, in the automobile sector and many leading countries of the world have announced special policies and concessions for Electric Cars. This has hit the sales of the cars running on conventional fuels and there is a major decline in the sales of such vehicles. Against this negative background, the leap taken by a new company like tesla Inc. On the financial level becomes significant.

Currently, Japanese company Toyota is the undisputed leader, by value and size, in the automobile sector companies. In 2019, this company sold more than 9 million cars. The market capitalisation of this company is over $230 billion. Although Tesla Inc. is trailing by a significant margin, the market capitalisation of Tesla Inc. has increased by a whopping $50 billion, in the last three years.

Wherein, the leading automobile companies are closing their manufacturing facilities and laying off staff; Tesla Inc. has recently started a ‘Gigafactory’ in China. Following this, a new factory will be starting in Germany, the hub of automobile manufacturing in Europe, by the middle of next year.

The German government is contemplating to provide financial assistance to leading companies like Volkswagen, BMW and Daimler. At the same time, Tesla Inc. is building a factory in Germany with its funds. This is considered to be an indication of a big change in the automobile sector.