Tesla's market value rose above $1 trillion on Monday after Hertz announced an order of 100,000 Tesla Model 3 sedans and a consulting firm reported that the Model 3 was the best-selling vehicle of any kind in Europe last month, a first for any electric vehicle. Tesla is the first trillion-dollar automaker and joins a very elite club of companies worth more than $1 trillion, including Apple, Amazon, Google's Alphabet, and Microsoft.
"Most automakers do not boast about sales to rental car companies, often made at discounts to unload slow-selling models," Reuters notes. "But for Tesla and its investors, Hertz's decision to order 100,000 Tesla vehicles by the end of 2022 showed electric vehicles are no longer a niche product, but will dominate the mass car market in the near future." Hertz interim CEO Mark Fields agreed, telling Reuters that "electric vehicles are now mainstream, and we've only just begun to see rising global demand and interest."
Tesla's cheapest Model 3 retails for about $44,000, making Hertz's deal worth about $4.4 billion, Reuters estimates, but Tesla CEO Elon Musk expressed bemusement that Hertz's order "moved valuation," tweeting that "Tesla is very much a production ramp problem, not a demand problem." If the order is fulfilled in full, Teslas will make up about 20 percent of Hertz's entire rental fleet, starting in about November 2022.
Tesla is struggling with supply chain backlogs like most other companies, and there's not guarantee its valuation will remain above $1 trillion. Facebook was briefly worth more than $1 trillion earlier this year, but has since fallen below that mark.