NEW YORK: Ahead of its listing on the S&P 500, Tesla market cap soared to more than US$500 billion Tuesday, with its stock finishing up 6.4% or nearly US$32 billion in 24 hours.
That gave it a US$526 billion valuation, an increase of more than 560 percent since the beginning of the year. It means that founder Elon Musk, who owns 18 percent of the firm, received US$100 billion over the same period.
Tesla is riding a wave of excitement from shareholders who see the future of the electric car manufacturer as promising.
Its share price has also been boosted by the victory of Joe Biden in the US presidential election in recent weeks. The Democrat has pledged to encourage the growth of electric vehicles in the country.
S&P 500 Index
The announcement that Tesla will be listed as of Dec 21 on the prestigious S&P 500 index contributed to the momentum.
The rising valuation of the company means that, CFRA analyst Garrett Nelson said in a note Tuesday. It can borrow or raise capital on more favourable terms than competitors.
This is crucial as the company continues to construct new factories. It will achieve the target of rising annual car volumes by 40x over the next decade.” the specialist said. “From 500,000 units in 2020 to 20 million in 2030.”
Tesla makes far fewer cars than conventional producers, but the markets are clearly favoured. The General Motors and Ford giants are worth only US$66.5 billion and US$37.5 billion on the stock exchange, respectively.
Musk said Tuesday that he is preparing to build the world’s largest battery cell factory near Berlin at the group’s electric car plant.
Then, he became the second richest person in the world on Monday, overtaking Microsoft founder Bill Gates with a fortune of US$128 billion. While, according to a Bloomberg ranking, Amazon boss Jeff Bezos remains in the lead.