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Tesla hits $1 trillion: What to know as company becomes just fifth US company to reach milestone

Tesla hits $1 trillion: What to know as company becomes just fifth US company to reach milestone


Tesla hits $1 trillion: What to know as company becomes just fifth US company to reach milestone

Elon Musk could become a trillionaire. Here’s what that means.Elon Musk could become the world’s first trillionaire. Here’s what that means.Staff video, USA TODAYTesla, the world’s most valuable automaker, just joined the trillionaire club.With its stock price closing at an all-time high of $1,024.86 on Monday, the company’s market value eclipsed $1 trillion. Shares of the electric-vehicle maker climbed another 2.6% on Tuesday, putting it on pace to end higher for a fifth consecutive day. Tesla, led by billionaire Elon Musk, is the fifth U.S. company to hit the milestone, which includes Apple, Microsoft, Amazon and Google parent Alphabet. The latest rally came after rental car company Hertz, which filed for Chapter 11 bankruptcy protection early in the COVID-19 pandemic, announced Monday that it plans to buy 100,000 cars from Tesla by the end of 2022 in a pivot toward electric vehicles. It’s among the largest electric vehicle orders ever placed.Hertz to buy 100,000 Tesla cars: Rental car company pivots toward electric vehiclesWhat’s next after Tesla deal?: Hertz will add Superchargers to some Valley locationsA recent streak of strong earnings and a bullish outlook from Wall Street analysts at Morgan Stanley have also added to optimism about Tesla’s stock. Here’s a breakdown of what is fueling Tesla’s eye-popping market cap: Hertz dealHertz’s move to buy 100,000 cars from Tesla by the end of 2022 is among the largest electric vehicle orders ever placed, matching the 100,000 electric vans that Amazon has ordered from startup Rivian. The deal is worth about $4.2 billion, estimated Wedbush Securities analyst Dan Ives.Hertz also plans to install thousands of electric vehicle charging stations at its locations.The move represents the largest investment by a rental car agency in technology widely considered the future of the automotive business but still viewed with caution by many Americans worried about running out of battery power while driving.Strong earningsLast week, Tesla posted a third straight record quarterly profit on the back of record deliveries.Tesla hit a record number of vehicle deliveries in the third quarter. It delivered 241,300 of its electric vehicles globally between July and September, up 73% from last year.To be sure, Tesla still faces challenges growing its earnings in the coming quarters due to supply-chain disruptions.“A variety of challenges, including semiconductor shortages, congestion at ports and rolling blackouts, have been impacting our ability to keep factories running at full speed,” the company told shareholders last week.Bullish Wall Street outlookOn Sunday, Adam Jonas, analyst at Morgan Stanley, raised his price target on Tesla’s stock to $1,200 a share from $900, citing higher vehicle sales volumes in the coming years following the company’s record third quarter profits and deliveries. Despite industry supply shortages, Tesla’s third-quarter sales surged by about 70%, according to his calculations, even though global automobile production fell by about 20%. Meanwhile, Jato Dynamics, a global supplier of automotive business intelligence, said Monday that Tesla’s Model 3 electric sedan became the first fully electric vehicle to top new car sales overall in Europe in September.

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