Tesla Exceedes $1 Trillion Market Cap After the Hertz Deal
On Monday 25th October, the automaker Tesla Inc, roared past $1 Trillion in market value after it landed its biggest order, from a car rental company Hertz which consists of manufacturing 100,000 cars, a deal so significant that refortified the Tesla boss’s ambitions to one-up the entire automobile industry in sales again and maintain it for the next decade possibly even. Despite brands like Ford and GM having an advantage over making more cars, Tesla is currently the world’s most valuable automaker company as its shares skyrocketed $1,045.02 and closed at +14.9%.
Tesla Boss Elon Musk expressed his joy online in a series of tweets; "Strange that moved valuation, as Tesla is very much a production ramp problem, not a demand problem," Musk replied to a tweet made by Ross Gerber who’s a co-founder of the investment fund Gerber Kawasaki and a shareholder in Tesla. "Wild $T1mes!" Elon Musk wrote this in a separate tweet. Among the Elite club of trillion-dollar, Tesla is the first car maker company, previously only Apple Inc., Amazon.com Inc, Microsoft Corp, and Alphabet Inc managed to achieve this feat.
The deal of Hertz buying 100,000 vehicles from Tesla by the end of 2022 proves that electric vehicles will no longer be a niche product that would only target the elite class but rather it will be dominating the whole car market in near future. "Electric vehicles are now mainstream, and we've only just begun to see rising global demand and interest," said Hertz interim Chief Executive Officer Mark Fields in an interview. The ambitious Tesla Chief executive Elon Musk is, he set a growth target of 50% on annual sales and set an objective of making 20 million cars in a year; which is more than twice the volume of current sales leaders Volkswagen AG and Toyota Motor Corp.
The consumer demand for electric vehicles is increasing every passing day, as the Tesla Model 3 was the best selling vehicle of any kind in the European markets last month, as reported by consulting firm JATO Dynamics on Monday.
Previously, Tesla had trouble complying with the Chinese government over regulatory issues, but it appears that Tesla is resolving those problems by opening a new research and data center to find a common ground with the native government. On Monday, though, Tesla came under further regulatory scrutiny in the United States. The new head of the National Transportation Safety Board wrote to Musk, asking why Tesla was releasing its "Full Self Driving" software despite the fact that the business had not addressed the NTSB's queries about the automated driving system's safety; "It (the Hertz order) puts an exclamation point under guidance for 50%+ growth in deliveries", Roth Capital analyst Craig Irwin said. "Another solid piece of evidence EVs are going mainstream."
Despite all the challenges Tesla is facing, it has started to turn up the profit under the leadership of Elon Musk, Tesla was able to earn that record net income even as the vast majority of its sales came from its cheaper Model Y and Model 3 electric vehicles. The company also generated $13.76 billion in revenue in the third quarter, a 56% increase from the $8.77 billion it reported in the same period last year. Revenue was also 15% higher than the $11.96 billion reported in the second quarter of 2021. The Tesla stock is often fumed by Musk’s tweet which like an explosion vanished with the moment but the stock has been steadily rising these days.
The Hertz deal is a game-changer for Tesla, as it not only helped them enter the trillion-dollar club, but also earn them bragging rights over others.
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