Musk Now World’s 2nd Richest Person, Tesla Market CapCrosses$500 Billion

The tremendous rise of Tesla's share price has propelled Elon Musk to become the second richest on the planet, toppling Bill Gates from the spot. Tesla Inc. raced 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. The meteoric rise saw the company’s market cap grow by over 500% this year.

Tesla is Wall Street's seventh most valuable company, and its shares have risen rapidly since November 16th, after the news of it joining the S&P 500 benchmark went viral. Tesla has quickly become the world's most valuable automaker, despite very few productions compared to famed automakers like Toyota Motor Corp, Volkswagen, and General Motors. Electric-vehicle makers and other related companies worldwide have also enjoyed increased valuation due to the general optimism that the auto sector will be dominated by electric-powered cars in the decades ahead.

Shares of other electric vehicles (EV) makers have also increased in recent months as Joe Biden made boosting EVs a top priority during his campaign. "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.

Tesla is set to join the index on December 21st, 2020. Money managers and investors who closely track the S&P 500 will now have to buy the stock in order to mirror the gauge accurately. Goldman Sachs Group Inc. has said Tesla's inclusion could result in $8 billion of demand from active U.S. large-cap mutual funds.