There was no surprise in the industry that Tesla’s market value had surpassed the $1 trillion mark. The only surprise was the speed at which it had achieved membership of the very exclusive trillion dollar collective, which was previously only occupied by Apple, Facebook, Amazon, Microsoft, and the owners of Google, Alphabet.
When Tesla started, it struggled to increase production and cut losses, it also seemed the writing was on the wall with regards to its demise. It was only in 2020 that Tesla began to turn things around and became profitable. This was spearheaded by the CEO billionaire Elon Musk. As a result, the shares of Tesla have skyrocketed and increased even more so by the recent announcement in the media by Hertz’s 100,000 electric car order for its fleet of electric rental cars. This is the biggest order ever for a rental car company ordering electric vehicles. To many, this is seen as a massive vote of confidence where the industry and the world are heading.
How much did Hertz pay?
The order made by Hertz is reported as being worth $4.2 billion dollars for 100,000 Model 3s which will be delivered by Tesla over the next 14 months. This order will make up a fifth of Hertz’s global fleet. Plans have been made for Hertz to build a network of charging stations to accommodate the new electric car addition to its fleet.
In the US, Tesla has a range of approximately 350 miles per charge, but the country is still building and increasing its infrastructure of charging stations. Something the US government has acknowledged needs to be done sooner rather than later.
“Electric vehicles are now mainstream, and we’ve only just begun to see rising global demand and interest,” said Hertz interim CEO Mark Fields.
What Tesla has achieved is truly remarkable. It has taken the world by storm with its innovation and perseverance. The $1 trillion dollar milestone has made it the first-ever carmaker to reach this greatness, and more shockingly it only took Tesla an incredible 11 years. To put it in perspective, the likes of Amazon became a public company 23 years ago and only joined the elite club in January 2020.
Production-wise, Tesla is far from being the biggest car manufacturer and makes up less than 1% of global car sales but is now worth the same as nine of the largest carmakers in the world, including giants like VW and Toyota.
Tesla is so innovative and groundbreaking, it’s treated by Wall Street as a technology company and not a car company.
Comparing numbers with competitors
Last year Tesla manufactured approximately half a million cars, compared to Volkswagen which made 9.3 million, Toyota produced 7.2 million and Renault-Nissan-Mitsubishi Alliance manufactured a combined 6.8 million vehicles.
Tesla’s target is to manufacture 20 million vehicles a year and to reach this goal it will need an annual sales growth of 50%.
Some bad news has marred what’s deemed extremely good news with the trillion-dollar announcement, Tesla has had to withdraw its latest software update for Autopilot, the self-driving software platform for its cars. A multitude of complaints of technical issues has led to the software being pulled until the new driver assistance software has been re-released.
Electric cars seriously becoming a player in the market
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