In the market for cars, big is beautiful these days. In the market for car stocks, things are more complicated.

Tesla’s market value raced past the $100 billion mark this week. While it’s still less than half of Toyota’s, it overtook Volkswagen’s and reached twice that of U.S. market-share leader General Motors. VW is still bigger by enterprise value—a better measure of relative weight as it accounts for different capital structures—but whichever way it is calculated the valuation gap relative to fundamental measures such...