Tesla Joined an Elite Club of Companies on Monday

Tesla Joined an Elite Club of Companies on Monday

Only several companies in history reached a $1 trillion market cap and Tesla is one of them. It hit a $1 trillion market cap on Monday following news that car rental company Hertz is ordering 100,000 vehicles from the carmaker. One of the major electric carmakers joined trillion-dollar market cap companies like Apple, Amazon, and Microsoft.

Information about the deal with Hertz brought Tesla’s stock to more than $1,045 a share midday. On Monday, its stock closed up 12.66% at about $1,024 a share. Currently, its price stands at $1,070.20. Bullish analyst calls and strong EU sales also helped to boost the company’s stock price. Adam Jones from Morgan Stanley raised his price target on Tesla from $900 a share to $1,200 a share two days ago.

On Monday, the company’s CEO billionaire Elon Musk celebrated the milestone on Twitter a minute before market close. He wrote Wild $T1mes!

An agreement with Hertz is an important moment in Tesla’s history. The deal with Hertz is the largest ever purchase of electric cars. It will bring in a reported $4.2 billion for the carmaker. Tesla will deliver 100,000 vehicles within the next 14 months. Customers will be able to drive eclectic cars soon.

The deal with Hertz comes more than a year after Hertz filed for bankruptcy protection during the height of the Covid-19 pandemic. At that time, demand for travel and rental vehicles was quite low.

Tesla and its rivals

Electric vehicles gained popularity in the U.S. Americans prefer to buy Tesla’s vehicles. In 2020, the company a lot of electric vehicles in the U.S. But the situation is starting to change as so-called traditional automakers and start-ups invest billions in new electric vehicles to compete against Tesla.

Carmakers such as General Motors and Volkswagen plan to build electric vehicles almost exclusively over the next decade or so. Other carmakers also plan to build only electric vehicles.

The current leader’s market share of all-electric vehicles this year is already expected to drop to 56% in 2021. In 2020, Tesla’s market share was 79%.

The company’s current dominance is over a relatively insignificant market. In spite of the amount of attention and hype regarding EVs, sales of EVs and plug-in hybrids remain minuscule. But the industry is developing as more and more are willing to buy electric vehicles. IHS Markit expects EVs to make up about 40% of the U.S. car industry by 2030.