Tesla Inc blew past $500 billion in market value on Tuesday 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 nearly 5 per cent, putting its market capitalization at $519 billion.
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. Index funds that replicate the S&P 500 will have to buy more than $50 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 $8 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 Motors, 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.