Tesla market value crosses $500 billion in meteoric rally

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% this year.

The California electric carmaker`s stock rose nearly 5%, 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% since Nov. 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 Dec. 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 Motor Corp, Volkswagen or General Motors Co.

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 Inc fell 4.9% on Tuesday, trimming its gain in November to 72%.

"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.
 

The story has been taken from a news agency