Tesla hits $1 trillion market valuation

Tesla, Inc. has become the first carmaker to have hit the $1 trillion market value on Monday following news that Hertz is ordering 100,000 vehicles to build out its electric vehicle rental fleet by the end of 2022. The company joins trillion-dollar market cap companies like Apple, Amazon, and Microsoft. The company has defied doubters, and after being mocked for years for never producing two consecutive quarters of profit, it has now earned net income for nine in a row.

News of the deal brought Tesla’s stock to more than $998 midday, a new record-high one trading day after shares hit $900. The stock is currently up around 9%. Strong EU sales and bullish analyst calls further boosted Tesla’s stock price. Morgan Stanley’s Adam Jonas raised his price target on Tesla to $1,200 a share from $900 on Sunday. Jato Dynamics said Tesla’s Model 3 electric sedan became the first fully electric vehicle to top new car sales overall in Europe in September.

The deal, which will bring in a reported $4.2 billion for Tesla, is the largest ever purchase of electric vehicles, Bloomberg previously reported. Bloomberg also reported the cars are slated for delivery within the next 14 months and will be available to customers in the U.S. and parts of Europe as early as November, according to the people.

Tesla overtook Toyota in July 2020 to become the world’s most valuable carmaker by market value. Since then, its value has increased fivefold with the company now worth more than all other public automakers combined. It is the sixth American company to hit a trillion-dollar valuation following Apple, Microsoft, Alphabet, Amazon, and Facebook.

The deal comes more than a year after Hertz filed for bankruptcy protection during the height of the pandemic, as demand for travel and rental vehicles waned. This year, investors from Knighthead Capital Management and Certares Management said they would take over the company.