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.