Elon Musk has leapfrogged Bill Gates to become the world’s second-richest person with a net worth of $128bn (£96bn).
The 49-year-old billionaire's wealth soared by $7.2bn on Monday, just hours before Tesla's market value topped $500bn ahead of its debut on the S&P 500 index.
Shares in Tesla have risen more than six-fold this year to almost $556 by Tuesday's close. Mr Musk, who owns about 18pc of the shares, has enjoyed a $100bn increase in his wealth since the end of last year.
The world’s richest man is still Amazon founder Jeff Bezos, who is worth an estimated $180bn. However, Mr Musk is now worth more than Bill Gates, the co-founder of Microsoft, and Facebook chief executive Mark Zuckerberg, according to Bloomberg’s billionaire rankings. He has climbed from 35th in the rankings in January.
Mr Musk’s milestone marks only the second time in the index’s eight-year history that Mr Gates has ranked lower than number two. He held the top spot for years before being bumped by Bezos in 2017.
Mr Gates’s net worth of $127.7bn would be much higher had he not donated so prodigiously to charity over the years, giving more than $27bn to his namesake foundation since 2006.
Tesla has the highest value of any carmaker despite producing less than 500,000 vehicles this year. It was selected to join the S&P 500, pushing shares higher.
Mr Musk will be due a $56bn stock award if Tesla’s share price continues to rise and hits $650bn by 2028.
Tesla shares have gained further since the election of Joe Biden, who favours more aggressive policies to address climate change.
The share price surge comes as Mr Musk mulls a smaller electric car catering to European tastes and roads to expand Tesla’s current four-car line-up. He made the comments during an online conference on batteries staged by the government of Germany, where Tesla has started work on a battery gigafactory.
“Possibly in Europe it would make sense to do a compact car, perhaps a hatchback or something like that,” Mr Musk said. “In the US, the cars tend to be bigger for personal taste reasons. In Europe, (they) tend to be smaller.”
Cars built with the US market in mind tend to be larger, as they do not have to contend with Europe’s small streets which often date back to cities planned for horses and carts.
Musk confessed that while driving one of his company’s almost 17ft-long Tesla Model X SUVs in Berlin, he “had quite a bit of trouble finding a parking space where we could fit”. By comparison, the bestselling car in Europe, the VW Golf, is almost 3ft shorter.
This month Musk's other business venture, SpaceX, launched four astronauts to the international space station in its crew capsule for the first time. Bankers at Morgan Stanley have estimated SpaceX, which supplies NASA with private rocket launches, could itself be worth $100bn.
Musk first cashed in when he made $165m out of the sale of PayPal to eBay in 2002, and went on to invest his fortune into rockets and electric cars.