Tesla replaces Toyota as world's most valuable automaker

Tesla's Fremont, California, plant was closed for roughly half of second quarter

Tesla is now the most valuable car company on earth.

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Tesla stock rose more than 3% in Wednesday trading, giving the electric vehicle pioneer a market value of about $207 billion. That eclipses the Toyota Motor market value of roughly $202 billion. Toyota shares were down 1.6% in overseas trading.

The race is neck and neck.

TickerSecurityLastChangeChange %
TSLATESLA INC.1,371.00-47.57-3.35%
TMTOYOTA MOTOR133.94+3.37+2.58%

Year to date, Toyota stock is down about 14%. Tesla, on the other hand, has soared more than 160%. And over the past month, Tesla shares have climbed more than 20%. Rising second-quarter delivery estimates catalyzed the recent Tesla stock move.

The second quarter has higher stakes than most other quarters, because if Tesla earns enough money, it will meet criteria for inclusion in the S&P 500 index.

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One criterion for inclusion is that companies should have posted profits over the past year. The current quarter should also be profitable, but exceptions can be made. "The [index] committee can use its discretion when it makes sense, but the eligibility rules are that the most recent quarter should be positive," an S&P spokesperson told Barron's in an emailed statement.

Calling earnings will be hard. The second quarter will be marred by plant closure and restart costs. No one knows exactly how many cars the company has delivered either. Tesla delivery data should come over the next couple of days. Analysts' estimates still range from a low of 39,000 units -- which looks stale -- to 86,000 units. Over the past few months, the top end of estimates has gone from 142,000 vehicles to 84,000 vehicles, and back to 86,000 vehicles.

Tesla's Fremont, California plant was closed for, very roughly, half the quarter. But the company ended the first quarter with about 14,000 cars in inventory, and its new Shanghai facility made vehicles most of the quarter.

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Wall Street has also struggled with Tesla's valuation. Only about one quarter of analysts covering the stock rate shares Buy. What's more, the average analyst price target is about $740 a share. The stock was recently trading 3.8% higher at $1,121.25.

The average buy-rating ratio for stocks in the Dow Jones Industrial Average is about 55%. And most price targets imply future stock gains.

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More than half the analysts covering Toyota stock rate its shares Buy. The average analyst price target is about 7,770 yen. Shares trade for 6,656 yen. That works out to about $72 and $62, respectively.

Looking at the companies based on price targets, analysts believe Toyota is worth about $234 billion and Tesla is worth about $138 billion.

The marketplace, however, strongly disagrees.