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Tesla passing the $100 billion point in market valuation could signal an electric car industry comeback a century in the making.

The first electric cars shared the roads with horses in the late 19th century, and were popular at the turn of the century. Then Ford started mass-producing the Model T. Unable to compete on price, electric cars dwindled and the age of the internal combustion engine dawned. In the 1970s a resurgence in the electric car industry was set in motion by the oil crisis and new emissions regulations. GM was the first to mass-produce an electric car, the EV1, in the 1990s. It was followed the same decade by the Toyota Prius, and in 2008, by Tesla’s first electric car, the Roadster.

Fast-forward to 2020, when Tesla’s shares surged by 8.1% to more than $590 on the morning of January 22, pushing its market valuation higher than those of Ford and General Motors combined. The share price has more than doubled in the past three months. The rally “speaks to the inflection in electric vehicle demand globally,” wrote Wedbush Securities analyst Dan Ives, adding, “The skeptics have been proven wrong, and the $100 billion market cap is sending the bears into hibernation mode.”

Tesla’s stock reached another kind of milestone in late December, when it passed $420. This is the price that, in a controversial tweet back in August 2018, CEO Elon Musk had said he would take the company private. His claim that he had “funding secured” to do so prompted a federal investigation which led to a $40 million settlement and Musk stepping down as Chairman.

Tesla went a long way in the year that followed. New highs in its share price were sparked by a quarterly profit in October, news of vehicle production scaling up at Tesla Gigafactory 3 in Shanghai, China, and better-than-expected annual car deliveries, Reuters reports. Wedbush analysts said they expect robust electric vehicle demand in China and Europe, along with the “aggressive” trajectory of Gigafactory 3 vehicle production, will boost fourth-quarter earnings.

In addition to what it may signify for the electric car industry overall, the higher stock price will have some specific upshots for Tesla. As Ben Kallo, Senior Research Analyst at Robert W. Baird & Co. explained, “The liquidity concern for now is off the table, and that opens up the...base to new investors.” It will also help Tesla attract talent, Kallo pointed out. “In a technology sector where it is very hard to recruit and retain employees, especially in the Bay Area, the stock price helps.” The better the talent it manages to secure, the farther Tesla will be able to go.

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