Tesla market value surges to R7.8 trillion in meteoric rally

Tesla blew past the $500 billion (R7.5 trillion) market value mark on Tuesday as investors snapped up its shares in the run-up to its debut in the S&P 500. This extended a meteoricrally that has seen it surge over 500% this year.

Tesla market value surges to R7.8 trillion in meteoric rally

The California electric carmaker’s stock rose nearly 5%, putting its market capitalisation at $519 billion (R7.86 trillion).

Tesla has become by far the world’s most valuable car company, despite production that is a fraction of what Toyota, Volkswagen or General Motors produces.

Shares of other electric vehicle makers have also rallied in recent months as President-elect 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 Wall Street’s seventh most valuable company, just behind Berkshire Hathaway, and its shares have rallied over 30 percent since November 16, when it was announced that 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 estimatedlast week that actively managed mutual funds could buy another $8 billion of Tesla shares after it is added.