What's going on?

Electric vehicle maker Tesla and its otherworldly CEO shocked their gas-guzzling rivals this week by becoming the world�s most valuable car company.

What does this mean?

Tesla�s market value surpassed the $208 billion mark, eclipsing previous frontrunner Toyota�s $203 billion. The companies� products aren�t as different as you might think, with the latter�s hybrids also having taken the world by storm. But their numbers couldn�t be further apart: Tesla delivered just shy of 368,000 cars last year, compared to Toyota�s almost 11 million. Nor has Tesla managed to deliver an annual profit, while Toyota has a long track record of doing exactly that (tweet this).

So what gives? Well, this week�s surge might�ve been thanks to an email Tesla�s CEO sent employees to congratulate them on a good quarter. Investors may have taken that to mean the 73,000 second-quarter deliveries � and, in turn, the revenue � that analysts were expecting was actually a serious underestimation.

Why should I care?

For markets: Drive toward the light.

Given the impact global trade wars and the ongoing pandemic have had on demand, it�s been a tough couple of years for carmakers. But after Thursday�s better-than-expected deliveries announcement, investors who thought they could see light at the end of the tunnel kept buying Tesla’s shares � sending them up 7%. And if some early investors hadn�t sold off stock to lock in their profits, those shares might well have risen even more.


The bigger picture: Coochy coochy coo.
Tesla�s critics argue that the carmaker�s decision to drop its prices amid rising electric vehicle competition doesn�t bode well for its future earnings. That might be why it�s the most bet against company in America. But investors expecting its shares to fall may recently have been forced to curb their losses by buying those shares back, pushing Tesla�s stock higher still. And it�s not just the company�s existing investors who are benefiting: CEO Elon Musk�s bonus should set sweet little X � A-Xii up for life�