Elon Musk, the maverick chief executive of Tesla, has overtaken Bill Gates to become the world’s second-richest person with a $128bn (£97bn) fortune after the electric car company he helped found 17 years ago soared in value to more than $500bn. Musk, 49, has seen his personal fortune increase by $100bn so far this year as investors worldwide rush to buy shares in Tesla, which is seen as key in helping wean the world off its reliance on fossil fuels. Tesla shares, which have risen more than six-fold this year, jumped 4.6% on Tuesday to $546-a-share taking its stock market value to $517bn. The shares have increased dramatically in recent days as investment funds rush to buy stakes in advance of Tesla’s debut on the US blue chip S&P 500 index next month. In January, the shares were changing hands at $86. Musk, who owns 20% of Tesla’s shares, saw his wealth jump by $7.2bn to $128bn on Tuesday, overtaking Microsoft co-founder Bill Gates. Amazon’s Jeff Bezos remains the world’s richest man, according to the Bloomberg Billionaires Index. Musk’s move up the world wealth rankings comes just a week after he overtook Facebook’s Mark Zuckerberg to take the third-placed slot. In January, Musk was in 35th place. Bezos holds a $182bn fortune, which has swelled by $67bn so far this year. Musk’s wealth could soar higher as Tesla’s share price growth puts Musk on target for a bonus deal that could pay him a record $55.8bn. In order to trigger the maximum payout Musk has to build Tesla into a $650bn company by 2028. When the scheme was created in 2018 it was valued at $55bn. Tesla’s debut on the S&P 500 on 21 December will be the biggest on record, and huge volumes of trading are expected to take place in the days before the inclusion. “[Tesla] will be one of the largest weight additions to the S&P 500 in the last decade, and consequently will generate one of the largest funding trades in S&P 500 history,” a spokesman for S&P Dow Jones Indices said. Tesla’s inclusion in the index is significant because passive funds that track the S&P 500 will have to buy shares in the company. Some analysts reckon Tesla shares could climb even higher as governments, including the UK, set targets to ban internal combustion-engined vehicles in an attempt to avert the global heating crisis. Dan Ives, managing director of equity research at Wedbush Securities, said there was huge demand for Tesla’s flagship Model 3 car in Europe and China. Ives raised his price target for Tesla from $500 to $560 and increased his “bull case” from $800 to $1,000. Ives said Tesla was likely to achieve its goal of 1m electric car deliveries by 2023. “The Tesla bull story is now all about a stepped-up EV [electric vehicle] demand trajectory into 2021,” he said in a research note to clients. “Overall we are seeing a major inflection of EV demand globally with our expectations that EV vehicles ramp from about 3% of total auto sales today to 10% by 2025.” Tesla has the highest market value of any car company in the world, even though it makes far fewer vehicles than others. It is expected to deliver up to 500,000 electric vehicles this year, compared with Japanese carmaker Toyota’s annual production of about 10m. About three-quarters of Musk’s net worth comes from his stake in Tesla, but he is also involved in spacecraft through his company SpaceX. Last week it sent four astronauts to the International Space Station on its Falcon rocket and Dragon capsule under a commercial contract with Nasa. SpaceX is set to launch 60 broadband internet satellites into orbit. Gates, who co-founded Microsoft, was the world’s richest person for years before being knocked off the top slot by Bezos in 2017. Gates’s fortune is worth $127.7bn but would be higher had he not donated large sums to charity over the years. He has given more than $50bn to help fight diseases and tackle poverty, mainly through the Bill and Melinda Gates Foundation, which has also backed the development of Covid-19 vaccines. Musk has signed the Giving Pledge, the philanthropic initiative created by Gates and investor Warren Buffett to encourage the world’s richest people to commit to giving away at least half their wealth to charity. However, the Musk Foundation, a charity he founded with his brother in 2002, has given away less than $100m according to regulatory filings. The charity’s entire website extends to just 32 words or 259 characters – less than that allowed in one Twitter tweet, the medium favoured by Musk. The world’s richest people have seen their fortunes soar despite the pandemic as many have benefited from the shift to home working and online delivery. A report by Swiss bank UBS found that billionaires “did extremely well” during the coronavirus pandemic, growing their already-huge fortunes to a record high of $10.2tn.