Tesla Inc. Now Worth US$1 Trillion Dollars

So, Tesla shares moved past the Trillion Dollar mark on Monday, making it only the fifth company in human history to have done so and thus becoming the most valuable car company in the world.

On Monday, there was a sudden spike of over 12% after car rental company Hertz announced that they would be purchasing 100,000 cars. In many ways, this all makes very little sense. Hertz of course have been using Ford and GM in the US of A for decades and, of course, both of those companies sell far more cars than Tesla and have bona fide international distribution. Both of those cars companies also make EVs, with the Ford Mustang Mach-E and Chevy Bolt being two of the top-selling EVs in the US.

But when you look at the other members of the Trillion Dollar Club, it may make a little more sense. This elite club of five includes Apple, Amazon, Microsoft and Alphabet (owners of Google), so in many ways, the valuation of Tesla has more to do with being a Tech valuation than an Automaker valuation. It took Amazon some 23 years to be a member of the Trillion dollar club. Elon Musk’s Tesla has done it in only eleven years, so I guess it is fair to say he has the bragging rights for now.

This is the biggest single order for Es and is significant as it comes from one of the rental car giants. Hertz will pay over four billion dollars for 100,000 Tesla 3s over the next year or so but interestingly, this will only account for about 22% of its rental fleet. The rest will still be good old gas-guzzling Fords and GMs. The Tesla 3 only has a range of about 200 miles so, and not forgetting the scarcity of EV charging infrastructure in the US of A, Hertz will have to build their very own network of charging stations.

Not bad for a company that is still junk-rated and whose debt is considered speculative-grade. Well done, Elon. We salute you.

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