Tesla's market value has climbed above Volkswagen Group'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.
Tesla is already valued more than Ford Motor and General Motors combined.
The electric-car maker’s shares soared as much as 5.9 percent in early trading Wednesday, extending a 31 percent surge already this year.
At the pre-market high of $579.51, Tesla’s market capitalization was roughly $104.5 billion, exceeding Volkswagen’s $100 billion. Tesla opened regular trading Wednesday morning rising 4.1 percent to $569.47.
Musk, Tesla’s billionaire CEO, is eligible to receive the first tranche of an all-or-nothing pay award if the company’s market value stays above $100 billion for a sustained period. On paper, the first chunk of the award would net him about $346 million.
Tesla shares have more than doubled since the company reported a surprise third-quarter profit and told investors it was ahead of schedule opening its factory in China and bringing out its next product, the Model Y crossover.
Musk, 48, has built a commanding lead selling electric vehicles over established automakers.
VW Group is the world’s largest automaker, selling 10.97 million vehicles last year. Tesla delivered about 367,500.
Wall Street’s most bullish analyst on Tesla was behind Tuesday’s rally.
New Street Research analyst Pierre Ferragu predicted the company will sell 2 million to 3 million cars per year after 2025 at industry-leading margins. He raised his price target by $270 to $800, the highest among analysts surveyed by Bloomberg.
In another bullish report, brokerage Wedbush said on Wednesday that robust demand in China and Europe alongside "aggressive" trajectory of Gigafactory 3 production will boost fourth-quarter earnings.
Tesla is set to report its earnings on Jan. 29 after markets close.
Reuters contributed to this report