It’s no secret that Tesla stock prices are on the rise. Elon Musk, the CEO of Tesla, does make things awkward from time to time, but this seems to work in his favor. The argument could be made that Musk was a cat in his past life, because no matter how bad the situation may seem, Musk always seems to land on his feet.

In spite of Tesla’s growing stock prices, it seems that one automaker will always remain on top, however. Toyota has been playing this game for years, and knows how it’s done. Now the question has arisen about whether Tesla is worth more than Toyota, and the answer isn’t as straightforward as it would seem. 

Which company is more valuable?

Let’s take a look at some numbers courtesy of TechCrunch. On July 1, TechCrunch reported,

“Tesla shares popped Wednesday after the market opened, rising nearly 4% to $1,129.18 — hitting a new 52-week high. The company’s market capitalization now stands at nearly $208 billion, surpassing Toyota to become the world’s most valuable automaker by market value. Toyota’s market cap is $202.74 billion.”

At the very least, these numbers are incredible. The stock market is reeling from this news. Masters of the trade who make a living predicting which companies will rise and fall are still trying to figure out what happened. 

Tesla’s still a new company in the bigger scheme of things. It wasn’t founded until 2003, after all. Considering it is only 17 years old, Tesla is still a baby in the auto world. Yet the electric automaker has toppled every auto giant in the world. Or that’s how it appears, anyways. Is that actually the case, however?

So, this means Tesla is worth more, right?

Well, not exactly. This is where things get a little complicated but just stay with us. It’s not that bad. We won’t even bring any math into the equation.

Business Insider took an in-depth look at all the headlines screaming that Tesla is now worth more than Toyota, and found this to be a little premature. Stating that Tesla is currently more valuable than Toyota is accurate. Claiming that Tesla is worth more is not.

We know, it doesn’t make sense. Tesla is worth $208 billion. Toyota is worth $202.74 billion. It doesn’t take one of Musk’s rocket scientists from SpaceX to figure that out that Tesla has the bigger price tag.

Well, it actually boils down to time. Business Insider stated,

“Toyota has been extremely valuable for decades, while Tesla has only recently been deemed exceptionally valuable by investors. Tesla must remain valuable for decades to genuinely surpass Toyota’s achievement.”

Will Tesla ever be worth more than Toyota?

Perhaps, but it’s going to take a long time. Tesla will doubtless continue to grow in the years to come, but Toyota has been around since 1937. It has a solid customer base that is nothing but loyal. Toyota also has a bigger selection of vehicles, and that translates into sales.

Still, Tesla increased its sales drastically and sold around 300,000 vehicles in 2019. Sounds impressive, right? It is, until you realize that Toyota sold 11 million vehicles in 2019.

In fact, Toyota produces the most vehicles in the world. Tesla isn’t even close to taking that title, yet, as the company is still growing.

Another factor to take into consideration is that Tesla has fewer options. It has the Model 3, X, S, and Y. That’s it. In comparison, Toyota has 12 models. The Japanese automaker also offers two truck models, while Tesla is still working on the Cyber Truck which has yet to hit the sales floor.

There’s also the fact that the electric vehicle market is red hot at the moment. That equates to lots of competition from other automakers who want a piece of the pie. 

On that same note, not everyone is ready to go green just yet. Electric cars are still too new, and many owners are leery of it. They want to see how these new EVs stand up to the test of time before turning in their gas guzzlers.

It doesn’t help that EV stations are still few and far between in rural areas, which means that road trips now require a lot of preplanning. This limits Tesla in more ways than one.

So is there any hope of Tesla one day being worth more than Toyota as opposed to just more valuable? Of course. But there’s a lot that has to happen between now and then before this can take place.