The market cap of Tesla Inc. (NASDAQ: TSLA) surged to $102 billion yesterday, passing Volkswagen, after eclipsing Ford and GM months ago. That pushes it into the number two spot among car manufacturers in terms of value. It will never move into the top place. The company that has that spot, Toyota Motor Corp. (NYSE: TM), is much too far ahead.

Among the notable things about Tesla’s stock value is that the shares have risen 65% in two years. Toyota’s are up only 3% over the same period. However, Toyota’s market cap is $202 billion. Like VW, Toyota sold over 10 million cars and light trucks last year. Tesla sold slightly less than 370,000.

Toyota’s valuation is based on several critical things. It is in first place in the Japanese market, one of the largest in the world. It ranks second much of the time in the United States, jockeying for that position with Ford. Toyota sold 1.1 million cars in Europe last year, which gives it a share of the market of about 5.5%. It ranks second in China, just ahead of GM and behind VW. On the whole, its position in the world’s largest car markets is excellent.

Toyota’s sales are immensely large for the industry, and so are its profits. Last year, revenue was $272 billion and operating income was $22 billion. GM’s revenue in 2018, the most recent year available, was $147 billion. Its operating income was $8.5 billion.

Tesla’s proponents say it should be valued as a tech company and not a car company. Over the trailing 12 months, its revenue was $24 billion and it had an operating income of $152 million. However, the argument about Tesla’s strength does not take into account the fact that it sells cars and not technology.

Tesla faces two challenges that Toyota does not. The head of Subaru recently said the market for mass electric car sales probably will not start until the end of the decade. If so, Tesla faces headwinds. In addition, Tesla is being chased by all the world’s major car companies, and some tech companies, for large pieces of the electric car business. Tesla may keep the lead in the market for years, but it is questionable whether it can hold that position permanently. Large manufacturers have more manufacturing and R&D dollars and bigger product development budgets than Tesla.

Tesla stock will not double again. Too many factors already have begun to weigh on it, particularly future sales growth and competition. Toyota’s spot in first place among car companies based on valuation is safe.

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