Tesla engineered its latest coup Wednesday, becoming the world's richest car company while two of Detroit's old guard, General Motors and Fiat Chrysler, reported sagging auto sales amid the coronavirus pandemic.

Led by Elon Musk, Tesla has had its share of ups and downs, but shares have risen steadily since late 2019 as it met key production targets for its Model 3 car, with the automaker topping Japan's Toyota in market valuation.

The company still sells only a fraction of the autos of the Big Three, yet it has captivated investors' imaginations as a bet on the future under charismatic leader Musk, who has challenged conventional wisdom on CEO comportment while also trying to shift the industry away from combustion vehicles and towards electric cars.

Meanwhile, the lower sales at two of Detroit's "Big Three" reflected the hit from coronavirus, which depressed auto demand for part of the quarter and prompted a shutdown of US auto production. 

Both GM and FCA pointed to improving sales trends later in the quarter, although GM also said the recent spike in US coronavirus cases added to uncertainty.

Cox Automotive has warned of the possibility of a "cruel summer" for auto sales as the United States contends with a resurgent coronavirus outbreak and automakers struggle to replenish inventories.

Cox surveys indicated one third of potential car buyers planned to delay purchases "driven by general uncertainty in the market, civil unrest and continued unemployment concerns."

Demand up or down? 

At GM, sales plunged 34 percent in the second quarter from the year-ago period to 492,484 vehicles, GM said. 

The auto giant, along with Ford and FCA, halted manufacturing for nearly two months at the height of the virus outbreak, but has returned to normal operating levels at most plants, GM said.

The company's press release alluded to "very lean" inventories of popular pickup and sport utility vehicles, where demand has been solid and increased notably in May and June.

"After falling into a deep recession in March, the US economy has begun to recover as it reopens," said GM Chief Economist Elaine Buckberg.

"Auto sales are benefiting from historically low interest rates that make now an attractive time to buy a vehicle for many customers. We expect continued sales recovery as businesses ramp back up, but recognize that the path forward may not be linear."

FCA reported a similar trend, with sales bottoming out in April and bouncing back more strongly than expected in May and June. The company reported a 39 percent decline during the quarter to 367,086 transactions.

"This quarter demonstrated the resilience of the US consumer," said head of US sales Jeff Kommor. "Retail sales have been rebounding since April as the reopening of the economy, steady gas prices and access to low interest loans spur people to buy."

Ford is scheduled to report sales on Thursday.

Cox has estimated that US auto sales fell around 30 percent during the quarter to 4.4 million vehicles. This includes an expected drop of 61.1 percent in Tesla US sales to 10,000.

Shortly after midday, Tesla shares were up 4.1 percent at $1,124.13, while GM was up 0.1 percent at 25,32 and FCA fell 3.6 percent to $9.88.

Other upstarts gain

Conventional carmakers have ramped up their online sales to include features such as delivering a car to consumers. 

This has also proven a fertile space for Carvana and Vroom, which have risen in market value during the turbulence of 2020.

A note Wednesday from DataTrek research said the gains by the e-commerce used car companies showed how investors are rethinking valuation in the wake of the pandemic and the rising importance of Amazon, Netflix and other tech companies.

"We're not saying online used car dealers are a good investment (cool idea, ferociously tough business) but the fact that the stocks have done so well shows equity investors are thinking much more broadly about what sorts of products will sell online," DataTrek said.

"And as we've seen with Tesla, sometimes 'right idea' can trump fundamentals for far longer than one might think."