TSLA Tesla Inc

By Heather Somerville 

Tesla Inc. will be added to the S&P 500 index on Dec, 21, S&P Dow Jones Indices said in a statement Monday.

The move comes at a time Wall Street expects the electric-vehicle maker to post its first full-calendar year of profit in 2020. Tesla has posted a profit in the first three quarters of the year despite the pandemic that led local authorities in California to order the company to temporarily close its lone U.S. car plant.

Inclusion in the benchmark that gauges the U.S. stock market requires an accumulation of four consecutive quarters of net profit. Tesla has strung together five for the first time in its history.

Being added to the S&P 500 is the latest milestone for the company which has enjoyed, unexpectedly to many, a dramatic ascent this year, despite the challenges of the coronavirus pandemic. CEO Elon Musk said he tested positive for the virus last week.

Tesla in the third quarter delivered a record nearly 140,000 cars and is on pace to hit a target of 500,000 vehicle deliveries for the year, a goal not long ago deemed implausible.

Tesla shares jumped more than 10% in after-hour trading following news it would join the index. Shares in the company have quadrupled this year. It became the world's largest car maker by market valuation, despite producing far fewer vehicles than rivals such as Toyota Motor Corp. and Volkswagen AG.

The company was overlooked for inclusion in the index in September, briefly halting Tesla's dramatic share price increase. The index didn't elaborate on its reasoning at the time, but some analysts pointed to the company's heavy reliance on regulatory credits to bolster its bottom line.

Tesla will replace an S&P 500 company that will be named closer to the effective date.

Write to Heather Somerville at Heather.Somerville@wsj.com

(END) Dow Jones Newswires

November 16, 2020 18:11 ET (23:11 GMT)

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