Tesla's market value reaches $1 trillion following 100K cars order from Hertz

Auto manufacturer Tesla, on Monday, hit the $1 trillion market cap following news that American car rental company Hertz was making an order for 100,000 vehicles. Hertz with its latest order plans to build its electric vehicle rental fleet by the end of 2022. Following the news, Tesla’s market valuation surged joining the trillion-dollar market cap group of companies with Apple, Amazon and Microsoft.

According to CNBC, news of the giant deal took Tesla’s stock to a new record high. The share of the auto company was trading at more than $1,045 a share midday on Monday. Having traded at $900 a day before, Tesla stocks closed up 12.66% at about $1,024 a share later in the day. Strong sales in the EU region was yet another factor in Tesla’s stock price boost.

Currently, market analysts are backing Tesla for a continued rally to reach new highs. CNBC also reported that Morgan Stanley’s Adam Jonas on Sunday raised his price target on Tesla to $1,200. Meanwhile, Jato Dynamics on Monday stated that Tesla’s Model 3 electric sedan became the first fully electric vehicle to top new car sales overall in Europe for the month of September, further increasing demand for the vehicle.

Elon Musk confirms Tesla valuation jump

Meanwhile, Tesla CEO Elon Musk confirmed his company’s market cap achievement. Celebrating the milestone, Musk took to his official Twitter handle and tweeted the same minutes before the market closed for the day. “Wild $T1mes!” the Tesla CEO wrote. According to Bloomberg, Tesla’s deal with Hertz, which will be completed for $4.2 billion, is the largest ever purchase of electric vehicles. It also stated that the delivery of the 100,000 vehicles will be done in the next 14 months. The deal comes only a year after Hertz filed for bankruptcy protection during the coronavirus pandemic period.

Earlier this month, Tesla had informed that it delivered around 241,300 electric vehicles in the third quarter even though it struggled with a global shortage of computer chips that have hit the entire auto industry. According to Associated Press, Tesla, which is based in Palo Alto, California, saw sales from July through September beat Wall Street estimates of 227,000 sales worldwide. Tesla’s third-quarter sales rose 72 per cent over the 140,000 deliveries that the firm made for the same period a year ago. It revealed that Elon Musk’s electric vehicle company has sold around 627,300 vehicles so far this year.

Image: AP