Tesla Market Cap Crosses USD 500 billion
Tesla Inc crossed $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% 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% to a record high of $542.35 in early trading, valuing the company briefly at $514 billion.
Tesla to become part of S&P 500
· S&P Dow Jones Indices recently announced that Tesla will join the S&P 500 effective prior to trading on Monday, Dec. 21.
· Upon entry, Tesla is already one of the S&P 500's 10 most valuable companies based on Monday's closing prices.
History
Tesla - an American electric vehicle and clean energy company - started business in the year 2003 in Palo Alto, California.The company's name is a tribute to inventor and electrical engineer Nikola Tesla. Eon Musk who is the current CEO of the company was the fourth employee of the company.
Tesla has been pushing the envelope on battery usage since its inception. The 2008 Tesla Roadster was the first highway-legal production car to employ lithium ion batteries. It was also the first to manage a range of over 200 miles.
Sales
Tesla's global vehicle sales increased by 50% in 2019 - over 2018.In 2020 its sales have already crossed a million mark. They are already 3 times that in 2019. Its Model 3 has already sold more than 500,000 cars making it the best selling electric car in the world.
No wonder then its shares have skyrocketed.
Aspirational
The market for fully electric vehicles is growing.Some reasons behind the growth include
- new regulations on safety
- vehicle emissions
- technological advances, and
- shifting customer needs and expectations.
Tesla has been able to catch the attention of people seeking to buy electric cars and has also become an aspirational product.
The Beginning Approach
Tesla took a unique approach to getting its first vehicle in the market.It did not try to build a relatively affordable car that it could mass produce and market. Instead it took the opposite approach, focusing on creating a compelling car.
It was costly to build an electric car in the "initial days". Tesla therefore took the approach of making an "electric sports car". An electric sports car could match upto price of other gasoline based sports cars and yet be aspirational.
The Next Stage
Once Tesla established its brand it went in for growth. Tesla's current business model is based on- Direct Sales Tesla has created an international network of company-owned showrooms and galleries. They are located mostly in prominent urban centers around the world. Tesla believes this helps it in the speed of its product development.
- Supercharger Network Tesla has created its own network of Supercharger stations. These are places where drivers can fully charge their Tesla vehicles in about 30 minutes for free. This is to speed up the rate of adoption for electric cars.
Doing things differently
According to Harvard Business Review Tesla does four things which sets itself apart 
- It develops cars as if it is a software product.
- It simplifies buying process putting the consumer in control.
- It leverages its technological prowess in battery technology to minimise the total cost of ownership over the vehicle's timeline.
