Tesla’s market value crosses $US500 billion as meteoric rally continues

Tesla blew past $US500 billion ($680 billion) in market value on Tuesday (US time) as investors snapped up its shares in the run-up to its debut in the S&P 500, extending a meteoric rally that has seen it surge over 500 per cent this year.

The California electric carmaker’s stock rose more than 7 per cent, putting its market capitalisation at $US529 billion in late trade on Wall Street.

Tesla shares have soared by more than 500 per cent this year.
Tesla shares have soared by more than 500 per cent this year.Credit:Bloomberg

Tesla is Wall Street’s seventh most valuable company, just behind Berkshire Hathaway, and its shares have rallied over 30 per cent since November 16, when it was announced Tesla would join the S&P 500 benchmark.

The share surge has vaulted founder Elon Musk past Bill Gates to become the world’s second-richest person. The 49-year-old entrepreneur’s has added more than $US100.3 billion to his net worth this year, the most of anyone on the Bloomberg Billionaires Index, a ranking of the world’s 500 richest people. In January he ranked 35th. Amazon’s Jeff Bezos remains on top of the list.

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Index funds that replicate the S&P 500 will have to buy more than $US50 billion worth of Tesla’s stock ahead of its inclusion to the index on December 21. Additionally, Goldman Sachs estimated last week that actively managed mutual funds could buy another $US8 billion of Tesla shares after it is added.

Tesla has become by far the world’s most valuable automaker, despite production that is a fraction of Toyota, Volkswagen or General Motors.

Shares of other electric vehicle (EV) makers have also rallied in recent months as President-elect Joe Biden made boosting EVs a top priority during his campaign.

Chinese electric carmaker Nio fell 4.9 per cent on Tuesday, trimming its gain in November to 72 per cent.

“One of the core underpinnings of the Biden platform will be around pushing clean energy and zero-emissions vehicles with hopes of accelerating the deployment of electric vehicles and public charging outlets by 2030,” Wedbush analyst Daniel Ives wrote in a research note.

Reuters

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