Tesla
From a traditional value approach, this is absurd. This year, Tesla is expected to produce around 500,000 vehicles. The company's primary obstacle is its ability to producing cars, while maintaining quality, to meet demand. In contrast, Toyota has mastered this task. Prior to the coronavirus which forced shutdowns of its facilities, it was projecting production of 8.8 million vehicles in 2020.
Valuation
Tesla's valuation can only be justified by accounting for its potential growth and investors' faith in CEO Elon Musk being able to execute on his vision. And, he's certainly delivered by creating a great product and ramping up despite an army of doubters.
The company has a headstart in two industries - self-driving and batteries which are going to be massive disruptors. Also like a lot of technology industries, both have the possibility to become winner-take-all. Of course, this is years in the future, things could go wrong, and new competitors could emerge.
Musk's Response
During the coronavirus crash, Tesla's stock dropped 63%, since then it has recovered these losses and made new highs, climbing 193% in less than two months. While the market is very optimistic about Tesla, its CEO Elon Musk is not as sanguine.
In response to Tesla's new high, Musk tweeted "LOL". In response to a reader's question, he said, "Stonks" which is a reference to a meme that mocks the stock market's relentless advance in recent weeks. Back on May 1, Musk also tweeted that "Tesla's stock price is too high."
Truck Catalyst
Prior to Tesla's new highs and gyrations in 2020, Musk was locked in an intense battle with short-sellers who were questioning the company's financials, viability, and ability to scale up production. Now, it seems that Musk is less optimistic about the stock than the stock market.
One potential catalyst for the stock's recent gains has been the strong gains of Nikola Motors
Tesla is also competing in the same industry, and Musk sent out a company-wide email stressing the importance of winning this market. Based on Nikola's valuation, investors may have upgraded its valuation of Tesla's truck division given that it's attempting to win the same market and has a headstart. The trucking market is a massive opportunity, and renewable vehicles would help them save on fuel costs.