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I don't get it either, but it seems to me a bit similar to how the US, if you look at market value of car companies, has utterly crushed Europe and Japan (with China surging ahead of those and maybe threatening the US soon), which to me sounds crazy (I still think of German cars as the top of the bunch).

According to Google (AI summary, no idea if it's 100% right but from what I've seen elsewhere it seems right):

Top Car Companies by Market Value (May 2026):

- Tesla ($1.3T - $1.56T): Retains market leadership with a valuation often exceeding the next several largest competitors combined.

- Toyota ($259B - $317B): Largest traditional automaker by market cap and unit sales.

- BYD ($122B - $126B): Strong market position as a Chinese electric vehicle leader.

- Xiaomi ($119B - $135B): High valuation following its entry into the smart EV market.

- General Motors ($69B - $75B): Leading traditional U.S. manufacturer, competing with Hyundai and BMW for top 10 spots.

- Ferrari ($\approx\$60B-\$68B$): Maintains high value due to luxury branding.

- BMW / Mercedes-Benz / Volkswagen ($\approx\$58B-\$64B$ each): German luxury and traditional automakers facing high competition.

- Ford ($\approx\$47B-\$54B$): Remains a major player with significant US market share.

So, essentially, Tesla alone is somehow worth more than all European companies combined??!

Except that by sales volumes, the top companies are exactly the ones you'd expect: Volkswagen ($350B) and Toyota ($315B) at the top, far ahead of anyone else... Tesla is around the 7th place with just $95B. Does the financial markets still expect them to far out-earn Volkswagen and Toyota any time soon, we've been waiting for like a decade already??

Gemini says that by country, the car companies revenues are:

* Germany - ~ $600B

* Japan - ~ $520B

* USA - ~ $470B

* China - ~ $250B

How does that even make any sense?

by ambicapter27 days ago|

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The stock market is over 60% passive investment, it's starting to get unmoored from the financial realities of the underlying companies. What that means for the future is [shrug emoji].

by nitwit00527 days ago|

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The price changes are not being driven by the passive investors though. People did actually decide to put all that money into Tesla.

by lotsofpulp26 days ago|

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>Does the financial markets still expect them to far out-earn Volkswagen and Toyota any time soon, we've been waiting for like a decade already??

These capital heavy industries operate on 30+ year timelines, a decade isn't sufficient time.

Revenues are not the end all, be all. Profit and profit margin, along with revenue trends provide a more complete picture. And the most significant factor is that the market does not expect Volkswagen or Toyota to do anything new, to do anything with the potential to earn more. They are what they are, and they will continue with their lower margin businesses until they fade away.

Investors are betting that Tesla, however, might have a few tricks up its sleeve, that will allow it to expand markets and profits.

by schubidubiduba26 days ago|

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They currently seem to have the opposite of tricks up their sleeve, resulting in their sales in Europe either dropping sharply or stagnating...

by lmm26 days ago|

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Look at profit rather than revenue - "it's easy to make a lot of revenue when you're selling a dollar for 80 cents" applies just as much to big legacy automakers as it does to startups.

by brabel24 days ago|

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The traditional car makers have had a hundred years to learn how to make profit by selling cars. What evidence is there that Tesla knows something they don't and has profit margins higher than they have??

by tardedmeme26 days ago|

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Stock market is about expected future returns. Tesla probably won't ever be very good, but it has the chance to regulatory capture the entire US market in a way that Volkswagen doesn't. Tesla gets to market overpriced junkboxes to rich people in a way that Volkswagen doesn't. Tesla has a likelihood of acquiring lottery-ticket companies like xAI in a way that Volkswagen doesn't. This stuff doesn't happen when your company just focuses on making cars.

by pzo27 days ago|

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There is a reason in capitalism we have anti-monopoly law or preventing dumping prices because those often leads to monopoly. So yes for sure you can kill your competition by just dumping money and loosing profits.

by AngryData27 days ago|

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That also assumes the monopolized market is profitable enough to pay for the dumping, but right now we are still questioning if LLMs have such high value on the market. Yeah its great for programming, but is the majority of the population benefitted enough to all start paying for access lke many investors expect? Someone might have looked at the low cost and massive lifting capacity of hydrogen balloons in the past and seen a lot of potential profit but if investors had dumped money to monopolize the hydrogen balloon market they would have lost their ass.