[SAN CARLOS] Tesla crossed US$500 billion in market value on Tuesday as investors lapped up its shares in the run-up to its addition to the S&P 500 index, extending a meteoric rally that has seen the stock gain more than six times this year.

Shares of the electric-car maker have risen nearly 28 per cent since the S&P Dow Jones Indices decided to add the company to the benchmark index from Dec 21.

Its shares rose as much as 3.9 per cent to a record high of US$542.35 in early trading, valuing the company briefly at US$514 billion.

The recent rally has also boosted chief executive officer Elon Musk's net worth by US$7.2 billion to US$127.9 billion, helping him go past Bill Gates to become the world's second-richest person, according to the Bloomberg Billionaires Index.

Mr Musk, who was ranked 35th in January, has added US$100.3 billion to his net worth so far this year, according to the index.

Tesla has become by far the world's most valuable automaker, despite a production that is a fraction of Toyota Motor, Volkswagen or General Motors.

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Shares of other electric vehicle (EV) makers have also risen in the last few 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 said in a note.

REUTERS