Monday, October 25, 2021
After a bulk order from Hertz
Tesla cracks market value of one trillion dollars
The car rental company Hertz will order 100,000 electric cars for its fleet from Tesla by the end of next year. The mega-deal is immediately noticeable on the stock market: The shares of the US car manufacturer are increasing, its market value skyrocketing.
The US electrical manufacturer Tesla has briefly achieved an estimated company value of over a trillion dollars after a large order from the car rental company Hertz. The company’s shares rose a good nine percent that afternoon, giving the company a market cap of just under $ 1 trillion after briefly exceeding that level.
The surge followed Hertz’s announcement that it would buy 100,000 Tesla cars by the end of next year. The vehicles are to be offered in the future in the USA and in “selected cities in Europe”, as the rental company announced.
“Electric vehicles are now mainstream,” said Hertz managing director Mark Fields. Worldwide “demand and interest” would grow. Hertz wants to build “the largest electric vehicle fleet in North America and one of the largest in the world” according to its own statements.
20 percent electric cars at Hertz
With the new order from Tesla, more than 20 percent of the global Hertz fleet will consist of electric vehicles. Hertz has been offering electric cars since 2011. Customers will therefore be able to rent the Tesla “Model 3” from November. Hertz also wants to install thousands of charging stations at its locations.
The corona pandemic had propped Hertz – like other car rental companies – into a serious crisis last year. Hertz initiated insolvency proceedings, but has since been able to get out of the procedure. Last week, Tesla announced solid increases in profits and sales despite the shortage of materials on the world market. Apparently, the global problems are placing a much greater strain on other manufacturers.
A warning from the US traffic safety authority NTSB to Tesla because the company had not implemented important safety information for driver assistance programs, however, hardly seemed to have a negative effect on the market. Five other manufacturers, who had also received the recommendations, had responded and promised improvements, said the NTSB. “Tesla is the only manufacturer that has not officially responded to the recommendations,” said NTSB boss Jennifer Homendy.