Tesla has surpassed $1 trillion market capitalisation for the first time ever, after its shares surged over 9.5%. The company’s shares hit a record high of more than $998 after American car rental company Hertz placed an order for 1,00,000 Tesla cars.
This milestone is an enormous achievement for Tesla that places it in an elite group of companies that also includes Google parent Alphabet, Amazon, and Facebook, though it’s still in the shadows of Apple’s and Microsoft’s $2-trillion-plus market caps.
Tesla also became the second-fastest company ever to reach the $1 trillion mark. It comes after Tesla inks a deal with rental giant Hertz, which recently emerged from bankruptcy, had agreed to buy 100,000 EVs from Tesla. The deal will push the car rental giant’s EV offerings to 20% of its global fleet and is reportedly worth $4.2 billion.
Tesla Chief Executive Elon Musk has set an annual sales growth target of 50%, on average, eventually reaching 20 million vehicles a year. That would be more than twice the volume of current sales leaders Volkswagen AG and Toyota Motor Corp.
Hertz’s rescue is led by a group of investors including Knighthead Capital Management, Certares Opportunities and Apollo Capital Management.
“We absolutely believe that this is going to be a competitive advantage for us,” interim Hertz CEO Mark Fields said of the Tesla order which is due to be delivered by the end of 2022.