Tesla reached $1 trillion in market capitalization for the first time in its history on Monday after learning that Hertz will buy 100,000 cars from the company led by Elon Musk to create a fleet of electric vehicle rentals by the end of 2022.
The deal pushed Tesla shares to more than $1,024, a new record, after rising 12.66% in a single session. The world’s most valuable automaker, whose market value is more than 10 times that of General Motors, thus joined the elite club that includes Apple, Amazon, Microsoft and Alphabet.
The operation with Hertz, which has risen from its ashes after going through suspension of payments and its restructuring, will mean some 4.2 billion dollars for Tesla and is postulated as the largest purchase of electric vehicles in history, according to Bloomberg.
The vehicles will be delivered over the next 14 months and will be available to Hertz customers in the US and some European countries as early as November.
8 million cars a year
The announcement came after Morgan Stanley analyst Adam Jonas raised his price target on Tesla shares to $1,200 a share, up from $900 previously. Jonas now assumes that to achieve that goal, the company will build about 8 million vehicles a year by 2030, up from a previous estimate of about 6 million.
The analyst believes that Tesla will increase its vehicle sales in part because the company is vastly improving its production. Jonas alluded to the “giga press,” which is essentially a giant machine that molds a chassis out of a single piece of cast aluminum. In the last three months, Tesla shares have appreciated around 51%.
Tesla delivered a record 241,300 electric cars worldwide in the third quarter, even as it warned that supply chain headwinds would pressure margins. Not only that, the electric car manufacturer achieved a turnover of 13,757 million dollars in revenue and a net profit of 1,618 million, almost five times more than a year ago.
This dynamic has also made Musk the richest person on the planet. According to the Bloomberg Billionaires Index, the Tesla CEO has a fortune of $252 billion. During the day on Monday, it added at least another 3,860 million dollars and so far this year it has grown by at least 82,700 million dollars. Jeff Bezos, founder of Amazon, follows him in second position with a heritage that reached 193,000 million dollars this Monday.
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