Tesla’s market value is approaching $ 1 trillion after the US electric car pioneer received an order for 100,000 of its vehicles from the rental company Hertz.
The automaker’s market value has soared during 2020 and 2021 as investors bet on accelerating sales of electric cars in the run-up to government bans on gasoline and diesel cars to meet climate targets.
Shares of Tesla rose as much as 7% to $ 973 on Monday after Hertz announced the order. Tesla would hit a $ 1 trillion (£ 727 billion) valuation if the shares hit $ 995.75, based on the number of shares disclosed in its latest filing.
It came after a record quarter for Tesla in which its Model 3 became the best-selling car in Europe in September. It was the first time that a battery electric vehicle topped the monthly sales charts in the region.
Hertz said the cars would be delivered by the end of 2022, and invested to build the largest electric vehicle rental fleet in North America. However, the car rental company did not detail how it would finance the purchase, which would likely reach $ 4 billion even with a volume discount.
Hertz filed for bankruptcy last year, and the Tesla ad was accompanied by a new ad campaign featuring Tom Brady, the veteran football quarterback.
The rise in Tesla’s share price added to the fortune of its CEO, Elon Musk. His net worth was already over $ 252 billion before earnings, nearly $ 60 billion more than Amazon founder Jeff Bezos, the richest man in the world behind the head of Tesla and the founder of the space rocket company. Blue Origin, a rival of Musk’s SpaceX.
Tesla sold 24,600 Model 3 cars in Europe during September, with a 2.6% market share that meant it outperformed established models of internal combustion engines like Renault’s Clio or Volkswagen’s Golf, according to figures compiled by Jato Dynamics. an automotive data company.
The Model 3 may not maintain its position at the top of the list because Tesla has previously boosted imports at the end of the quarter. However, it represents another milestone in the automotive industry as it prepares for the end of gasoline and diesel sales in the next decade in some markets. That includes a 2035 ban on all internal combustion engines in the UK, where the Model 3 is already the most popular electric vehicle.
Gasoline sales continue to dominate in Europe due to the lack of affordable battery electric vehicles, but there has been a big shift in diesel use due to air quality scandals. Before the coronavirus pandemic, there were 10.3 new diesel cars registered for every electric or plug-in hybrid vehicle, but that proportion has dropped to just 1.3, Jato said.
Tesla posted record quarterly sales last week, as well as record earnings of $ 1.6 billion. The successful sales of the Model 3 and its Model Y crossover meant that Tesla was the largest seller of battery electric vehicles in Europe in September.
Tesla’s European battery crown is likely to be challenged by Germany’s Volkswagen and Stellantis, the Franco-Italian combination of Peugeot and Fiat Chrysler.
Tesla’s rise to the top spot, also the first time a non-European model has achieved the distinction, coincided with falling sales for many of its traditional rivals, struggling to get hold of computer chips amid a protracted global shortage. . The crisis has hit automakers around the world, although Tesla has fixed some of the problems by rewriting the software so that it can use available chips.
Total car registrations in Europe fell to just 964,800 units during the month, a 25% decrease compared to September 2020 and a 24% drop compared to September 2019, before the coronavirus pandemic hit, Jato said.
George is Digismak’s reported cum editor with 13 years of experience in Journalism