Dec 20 (Lagos) - Tesla will debut on the S&P 500 index when the market opens tomorrow, its shares have risen more than 700% this year alone. Company is now worth $658 billion far above GM, Ford and Volkswagen combined.
Founder Elon Musk is now the second richest person in the world with an estimated wealth of $167 billion after the most recent rally in the stock over the last week. Almost $140 billion of that wealth has been added in 2020 alone.
The company recently sold $5 billion worth of additional shares because the demand for its shares is so high and that also pushed the stock price only higher. Nothing seems to be able to come in the way of the most innovative automobile manufacturer of current times.
About 15 other EV companies have gone public in 2020 including companies like Xpeng, Li Auto, Arcimoto, Lordstown motors to name a few.
The growth in EV stocks has come because China has introduced a Policy to make 20% of all vehicles electric by 2025 in a bid to reduce air pollution in its cities. That policy has led to major increase in stock prices of China based EV's such as Nio which has seen 800% increase in its stock price as well in 2020. This company also pioneered the 'Battery as a service' model to enable people purchase its vehicles without buying the battery which is the major component of an electric vehicle. The move quickly elevated NIO CEO Li Ben as an innovator in the EV space almost on the same level as Tesla.
USA is expected to follow China and increase the adoption of electric vehicles with climate change on top of the agenda of the incoming President Biden. This expectation is leading to major gains in stock prices of electric charging grid providers such as Plug Power, Swithback energy among others. Suck stocks have gained more than 500% in 2020 alone and have been on a tear since the elections.
Other countries are not far behind in joining the EV race to reduce air pollution. European countries are mulling legislation of their own to phase out combustion vehicles. India has seen launch of its own electric vehicles in 2020 as well from companies like Tata Motors.
Apart from cars, companies are also focusing on two and three wheeler segment and taking it electric. Tesla is focusing on semi's which will change the future of transport in North America within the next five years.
There is a long way to go before we stop seeing petrol and diesel vehicles but the change has started and awareness is growing. The new generation of buyers want to opt for pollution free vehicles and that is what is driving the electric vehicle revolution around the world.
Toyota's CEO Mr. Toyoda last week spoke of a situation where if all cars in Japan went electric, there will be no electricity within weeks. Such are the fears of the traditional auto makers who are far behind Tesla and even Nio in the EV race. Will consumers prefer to go with an EV from a traditional auto maker or prefer a Nio or a Tesla, we will have to wait and see.