Tesla CEO Elon Musk talks to media as he arrives to visit the construction site of the future US electric car giant Tesla, on September 03, 2020 in Gruenheide near Berlin.Odd Andersen | AFP | Getty ImagesTesla will replace Apartment Investment and Management Co. in the S&P 500 when the electric vehicle company joins the index before trading begins on Dec. 21, S&P Dow Jones Indices said Friday.Tesla will also be added to the S&P 100, replacing Occidental Petroleum in that index.S&P Dow Jones Indices previously announced on Nov. 16 that Tesla would join the S&P 500. Tesla’s size — it’s the largest company ever to be added to the benchmark index — prompted the index provider to seek feedback from the investment community over whether to add Tesla all at once or in two separate tranches.S&P Dow Jones Indices ultimately decided on the former, announcing on Nov. 30 that it would add Tesla at its full float-adjusted market cap on Dec. 21.”In its decision, S&P DJI considered the wide range of responses it received, as well as, among other factors, the expected liquidity of Tesla and the market’s ability to accommodate significant trading volumes on this date,” the index provider said. Tesla’s addition to the S&P 500 will be based on the closing prices on Friday Dec. 18, coinciding with the expiration of stock options and stock futures, which should help facilitate the addition because of the high trading volume, S&P said.S&P Dow Jones Indices has not yet announced Tesla’s weighting in the index.There’s currently over $11.2 trillion in assets benchmarked to the S&P 500, with roughly $4.6 trillion of the total in indexed funds, meaning significant portfolio adjustments will have to be made to make room for Tesla.According to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, $80 billion worth of Tesla stock will have to be bought by index investors. He noted that trading volatility could be exacerbated by Tesla not being a member of the S&P 1500, S&P 400 Midcap or S&P 600 Small Cap indices.Fund managers that must buy the index will try to buy Tesla as near the Dec. 18 closing price as possible. “It’s probably going to be one of the biggest market on close buy orders of all time,” said Peter Boockvar, chief investment strategist at Bleakley Advisory Group.- CNBC’s Patti Domm contributed reporting.Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world.