By Subrat Patnaik and Noel Randewich
(Reuters) - Tesla (NASDAQ:TSLA) 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 (NYSE:BRKa) , 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 (NYSE:GS) 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 (NYSE:TM) Corp, Volkswagen (DE:VOWG_p) or General Motors Co (NYSE:GM).
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 (NYSE: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.