Tesla has displaced Volkswagen as the world's second most valuable carmaker, after a dramatic rise in share price pushed its market value to more than US$100bn (GBP76.1bn).

The milestone sets the stage for chief Elon Musk to collect billions in pay tied to hitting that target, the BBC reported.

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Tesla's share price had more than doubled since October, when the firm reported a rare quarterly profit.

Its valuation was second only to Toyota which has a stock market valuation of more than $230bn.

The BBC noted some analysts said the rise in price reflects Tesla's performance in recent months, during which it has opened a factory in Shanghai and met its production goals.

This month, Tesla said it had delivered more than 367,500 cars last year – up 50% from 2018. Investors expect the new factory to act as a springboard that will allow it to capture more of the Chinese market.

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Despite the increase, Tesla's sales remain small compared to those of its competitors.

Volkswagen delivered almost 11m vehicles last year while Toyota sold more than 9m in the first 11 months of 2019.

Tesla has also never made an annual profit and it is facing investigations after complaints about battery fires and unexpected acceleration, the BBC said.

If Tesla sustains the $100bn valuation, it could unlock the first piece of a $2.6bn compensation package for Musk.

The plans call for Musk to receive payouts in shares over 10 years, with the first award contingent on the firm reaching $100bn in market capitalisation and sustaining that value over both a month, and six-month average.

Tesla also had to reach $20bn in revenue and earn $1.5bn, after adjusting for items like taxes – thresholds the carmaker reached in 2018.

Tesla was valued at about $55bn when the pay deal was approved, the BBC added.