Elon Musk briefly becomes world's fifth richest person

Elon Musk briefly became the fifth richest person in the world after Tesla' share price soared.

The Tesla founder's net worth reached £58.5bn, putting him ahead of Berkshire Hathaway founder Warren Buffett, Oracle founder Larry Ellison, and Indian petrochemical baron Mukesh Ambani.

However, Tesla's share price has since taken a small tumble, putting Mr Musk back in eighth place.

Tesla's market capitalisation is currently $292.31 billion, the largest of any car manufacturer. For contrast, Daimler, better known as Mercedes, currently has a market capitalisation of $48.93 billion.

The company's dominance is all the more remarkable given that Mercedes-Benz alone sold 935,089 cars in the first half of 2020, dwarfing the 179,050 delivered by Tesla in the same period.

However much can change - Tesla's share price has been highly volatile over the years and many industry executives and analysts question whether the company has the right formula for long-term success.

The electric car manufacturer has yet to deliver a full year of profits, and it has increased its debt load as Mr Musk has pushed to expand with new factories in China and Germany.

There is also regulatory risk - Mr Musk has clashed with U.S. market watchdogs, who demanded he step down as Tesla's board chairman after an aborted leveraged buyout proposal in 2018. U.S. vehicle safety regulators are also looking into a series of crashes of Tesla vehicles operating on Autopilot, a system that Musk has said will someday enable fully autonomous driving.

Mr Musk's relentless focus on innovation explains, in part, why he has disrupted the traditional auto world. In an interview at the 2020 Air Warfare Symposium he was asked about the importance of innovation among his employees.

"We certainly need those that do advanced engineering to be innovative," Mr Musk said. "The incentive structure is set up ... such that innovation is rewarded. Making mistakes along the way does not come with a big penalty. But failure to try to innovate at all ... comes with a big penalty. You will be fired."

Established car manufacturers are playing catch-up to Tesla, designing their own software operating systems and dedicated electric cars.

Mercedes will release its EQS next year - a four-door limousine built on a dedicated electric vehicle platform, with an operating range of 700 km. A new version of the Mercedes S-Class, which will have combustion and hybrid powertrains and semi-autonomous driver assistance systems, is due this year.