Tesla’s stock price soared above $1,000 on Wednesday. The rise pushed the company’s valuation to around $190 billion—within striking distance of the world’s most valuable car company, Toyota, at $215 billion.
Tesla’s stock surge comes a week after one of Tesla’s leading electric vehicle rivals, Nikola, debuted its stock on public markets. Like Tesla, Nikola is building all-electric vehicles. But there are a couple of big differences. First, while Tesla initially focused on passenger cars, Nikola will initially sell trucks along with off-road vehicles and a jet ski. Second, while Tesla cars run on batteries, Nikola is focusing on fuel cells—though some vehicles will have a battery option.
Nikola’s first week on the stock market has been strong, with the stock price nearly doubling to reach Wednesday’s closing price of $65. This makes Nikola worth nearly $30 billion—on par with Ford—before it has shipped its first vehicle.
Nikola’s debut on the stock market apparently got Elon Musk’s attention. In a Wednesday email to staff, Musk reportedly wrote that it was “time to go all out” and bring the long-delayed Tesla Semi to market. The Semi was initially planned for production in 2019, but Tesla recently admitted that the ship date would slip to 2021. Two years ago, Nikola sued Tesla, arguing that Tesla’s design for the semi was too similar to Nikola’s own semitruck design. That legal battle continues to this day.
Elon Musk owns more than 34 million shares of Tesla, so his Tesla holdings alone are now worth more than $34 billion. Musk’s compensation package grants him large tranches of stock options after Tesla’s stock rises above certain benchmarks. Musk recently collected his first award, worth around $800 million. For Musk to collect this award, Tesla’s stock needed to stay above $100 billion for several months, and Tesla also needed to hit a revenue or profit target.
Musk is eligible for 11 more awards if Tesla’s stock continues to rise. The next threshold is a market capitalization of $150 billion. The stock is already well above that level, but for Musk to collect another award, the stock needs to stay above $150 billion for a few more months and Tesla needs to hit another revenue or profit milestone.
If the stock rises above $200 billion, Musk could become eligible for a third payday.