Tesla Motors, Inc. has reached a big milestone on Monday October 25 – the company’s market capitalisation exceeded $1 trillion. It joins an ultra-exclusive club consisting of just Apple, Amazon, Microsoft and Alphabet, the parent company of Google.
Yesterday, Tesla’s share price skyrocketed over $100 from $909, breaching the $1,000 mark for the first time since its stock split back in August 2020, closing at $1,024.
The surge in the share price was because of a few things: Tesla’s solid Q3 2021 financial results reported last Wednesday, Micheal Burry, nicknamed ‘The Big Short’ closed his short positions on the stock last week, and Tesla’s new partnership with rental company Hertz.
The new partnership will see Hertz purchase 100,000 all-electric Tesla vehicles for its rental fleet. This will see approximately 20% of its fleet made up of Tesla vehicles, Hertz said. Tesla CEO Elon Musk said on Twitter that Hertz will gain zero discount on all of its Tesla purchases, and that the price will be the same as the consumer price.
Bloomberg reported that Tesla will generate $4.2 billion in automotive revenue from the deal, with Mark Fields, Hertz’s interim chief executive, saying the partnership will give Tesla greater exposure to the wider car consumer market and give Hertz the opportunity to differentiate itself from other car rental companies. Hertz customers will be able to rent a Tesla Model 3 in selected markets such as the US from early November and the company is planning to install thousands of EV chargers at its rental locations.
Fields also said:
“Electric vehicles are now mainstream, and we’ve only just begun to see rising global demand and interest..”
Hertz filed for bankruptcy in 2020 due to the economic and financial impacts COVID-19 as well as tough travel restrictions implemented across the US. However, the company emerged from financial hardship to get itself back on track as vaccines rolled out and the bankruptcy allowed Hertz to release itself from most of its debt.
Currently, Tesla’s stock remains over the $1,000 threshold on Tuesday.