Tesla and Musk’s Speedy Journey
Tags: Tesla, Electric Vehicles, Richest Man, Spacex, Elon Musk

2020 has indeed been the year for Tesla and its CEO Elon Musk — making them among the most valuable in the world.

Tesla’s stock has been on the gaining frenzie, smashing records by rallying nearly 550% this year, pushing its market valuation over the $500 billion mark. Not just that, as per Bloomberg, Elon Musk has added $100.3 billion to his net worth this year that helped him surpass Bill Gates to become the second-richest person in the world.

Investors choice

The stock has been on the buying spree after S&P Dow Jones indices last week announced Tesla’s inclusion in the S&P 500 index from December 21, which would make it one of 10 most valuable companies in the index. Currently, Tesla trades in the Nasdaq index. The electric carmaker had already gained investors’ interest when it announced its five-for-one (5:1) stock split plan in August to make its shares more affordable.

*Stock split increases the number of shares as the existing shares split in the ratio announced by the companies. The price per share goes down, making it affordable for investors.

On the earnings front, Tesla beat expectations by reporting its fifth-straight quarter of profits. It also set a new record of strong deliveries as it delivered 139,300 vehicles during the September quarter, driven by its new factory in China.

EV: the future

A big part of Tesla’s gain is its sustainably profitable business model as the carmaker is known to produce wide range of electric vehicles (EV) and electric trucks.

Even though many automakers are now edging towards grabbing the share of the EV market as EVs are believed to dominate the auto industry, Tesla has been successful in being among the first to transit to sustainable energy with electric cars, solar and renewable energy.

Apart from the company’s attractive valuation, the CEO’s vision seems to have helped investors hold on to the company. Investors have been looking at Tesla’s potential given Musk’s larger vision of an electric future and the company’s growth trajectory by 2025.

Speaking at a European Battery Conference on Tuesday, Elon Musk laid out expansion plans in Europe and build the world’s largest battery-cell factory near Berlin, reported AFP.

Biden presidency

An important policy related favourable factor for Tesla as well as other U.S. electric vehicle makers is Joe Biden’s ‘Build Back Better’ policy goals for clean energy and manufacturing. Some of the goals include building out electric vehicle charging infrastructure by adding at least 500,000 more charging stations in the U.S. and creating 1 million jobs in the U.S. auto industry.

Therefore, Biden’s policy announcements in the sector and how much of these stated goals pass through under his administration will decide more for the EVs future.

Musk’s bets

Along with the speedy journey of Tesla, the success story of his space venture has worked in Musk’s favour which has made him the second-richest in the world. Elon Musk’s SpaceX has been certified as the first private company with an operational system to launch astronauts to-and-from space.

Will all these achievements, potential and growth path help Musk lead to become the world’s richest man and Tesla to surpass Apple as the most valuable company in the coming years?