Tesla surges past $100 billion market value, eclipsing Volkswagen

Tesla’s market value has climbed above Volkswagen AG’s for the first time to more than $100 billion, a threshold that will trigger a huge payout for Elon Musk if he can sustain the feat for months.

The electric-car maker’s shares soared as much as 8.6 per cent on Wednesday to a new intra-day high of $594.50. At that price, Tesla’s market capitalisation was roughly $107.2 billion, exceeding Volkswagen’s $99.4 billion and trailing only Toyota Motor.

While Musk’s skeptics are dubious that Tesla should be worth more than a carmaker that sold almost 30 times as many vehicles last year, Volkswagen’s own Herbert Diess isn’t so dismissive. He’s been arguably the most vocal CEO among traditional carmakers to praise Tesla and point to its role in a radical shakeup of the more than century-old auto industry.

After saying three months ago that Tesla was no niche manufacturer anymore, Diess told top Volkswagen executives at an internal meeting in Germany last week that connected vehicles will almost double the time consumers spend online, and that cars will “become the most important mobile device.”

“If we see that, then we also understand why Tesla is so valuable from the view of analysts,” he said.

Diess, 61, is rolling out the industry’s largest electric-car fleet and aims to boost the company’s value to a level rivaling Toyota, whose $232 billion market cap is still more than Tesla and VW’s combined.

The jump above $100 billion is about more than just bragging rights for Musk, Tesla’s billionaire chief executive officer. He’s eligible to receive the first tranche of an all-or-nothing pay award if the company’s market value stays above that threshold for a sustained period. On paper, the first chunk of the award would net him about $346 million.