Very simple, the market valuation is based on two things:
- Tesla's track record of rapid growth and their credible/plausible plan for growing volumes by about at least 10x And that's just cars. They have a few other rapidly growing business that are already billion dollar businesses. Some of which could outgrow their car market. Even when you consider the expected growth. It's only inflated if you don't believe they can do all of this. The reason the valuation is so high is that lots of investors seem to not agree with that.
- The underwhelming performance of essentially all their competitors; i.e. the next 5 manufacturers that you refer to. With the exception perhaps of Asian companies like BYD that have similar proven track records as Tesla to ship decent EV products in large volumes profitably. These new manufacturers other manufacturers are short term going to cause a lot of headaches for the (former, let's just call that out) top 5. The prospect of millions of dirt cheap good quality Chinese EVs undercutting cheap ICE cars has a high risk of decimating the market shares of the likes of Toyota, GM, etc. that are very dependent on sales of cheap, unremarkable ICE cars. They make most of their money selling products that are rapidly becoming a combination of obsolete, expensive, and undesirable.
Most of the former incumbents like GM, Ford, VW, Toyota, etc. of course have EV strategies of their own but they will need many years more before they match current production volumes and cost levels of their new competitors.
In short, they'll be struggling to catch up for years to come even under the most optimistic scenarios. The more pessimistic scenario is actually that a few of these companies might not survive the transition at all and that the remaining ones might find themselves vastly reduced in size. Tesla and several other new manufacturers certainly seem well positioned to continue to make life miserable for these companies for years to come. Whatever they do, Tesla et al. will be able to do it faster, better, cheaper, and in larger volumes for some time to come.