Tesla Inc on Monday neared $1 trillion in market capitalization as the company founded by Elon Musk received its biggest-ever order from Hertz, which announced plans to buy 100,000 electric rental cars.
Tesla shares opened up 4.5% at $950.53, a new record high, following the order. Shares were also buoyed by news of the company’s Model 3 becoming the first electric vehicle to top monthly sales of new cars in Europe.
The news from Hertz comes as Tesla is coping with a backlog of unfulfilled orders for its vehicles and continuing supply chain disruptions, but it does solidify the mainstream appeal of electric cars.
Interim Hertz Chief Executive Mark Fields in an interview told Reuters the order, delivered by the end of 2022, will primarily be Model 3 vehicles.
Tesla vehicles will start being available at Hertz rental facilities in November.
Hertz has around 430,000 to 450,000 vehicles worldwide, Fields said. He said Hertz would work with other automakers producing electric vehicles.
Tesla would have to top $995.75 to become a company worth a trillion dollars, according to Reuters calculations based on its latest filing.
The world’s most valuable carmaker will join an elite club that includes Apple Inc, Amazon.com Inc, Microsoft Corp and Alphabet Inc
The world’s most valuable automaker delivered a record here 241,300 electric cars globally in the third quarter, even as it warned that supply chain headwinds here would pressure margins.
Tesla’s cheapest Model 3 sedan starts at about $44,000, making this order worth about $4.4 billion, if the entire order were for its mass-market sedan.
With the current order, Hertz said EVs will make up more than 20% of its global fleet.
The car rental firm also said it was installing thousands of chargers throughout its network. Customers who rent a Tesla Model 3 will have access to 3,000 Tesla supercharging stations throughout the United States and Europe.