Tesla’s valuation exceeds the Nifty Auto Index

By Ravi Ved | on February 4, 2020

At a valuation of $144 billion, Tesla’s market cap exceeds the entire Nifty Auto Index, which has a total valuation of just over $100 billion.

2019 has been a great year for Tesla. The California-based brand sold 3,67,200 units in 2019 – more than 1,00,000 units higher than in 2018. Thanks to this substantial rise in sales – courtesy of the more attainable Model 3 sedan – Tesla generated a revenue of over $7 billion dollars in the last quarter of 2019.

An unexpectedly strong Q4 result took industry experts by surprise and led to an insane hike in the stock price of nearly 80% in the past few weeks. Tesla’s current market price is $780, putting its market cap at $144 billion.

Since the start of the year, Tesla’s market capitalisation has surged and is now second only to Toyota, which sits at No.1 with a market cap of $233 billion. Over the past month, the electric carmaker’s valuation exceeded the combined value of both GM and Ford, which have cumulative sales over 14 million each year.

Tesla Back Three Quarter

The bigger news, however, is that Tesla’s market capitalisation is even higher than the Nifty Auto Index, which has a combined value of just over $100 billion. For the uninitiated, the Nifty Auto Index represents the market capitalisation of 15 automotive stocks listed on the National Stock Exchange. These stocks include some big manufacturers like Maruti Suzuki, Tata, Mahindra, and some listed ancillary firms, like MRF, Motherson Sumi, Exide, etc.. The Nifty auto index has seen a 30% drop over the past two years, as the markets have struggled and the automotive industry has seen stagnant growth.  

Tesla’s meteoric rise in valuation, despite the fact that it’s still nowhere near making a profit, flies in the face of traditional economics. Either way, it’s current valuation is quite humbling for the traditional automotive industry, both in India and across the globe.

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