Electric vehicle maker Tesla temporarily reached a $1 trillion market capitalization for its first time after Hertz announced a $4.2 billion deal to purchase 100,000 electric vehicles to help build its fleet of electric vehicle rentals by late 2022.
According to Bloomberg, it’s the largest purchase transaction ever to take place for electric vehicles. Bloomberg said the delivery of the autos is slated to be completed over the next 14 months, while some parts of Europe and the U.S. will be able to purchase the electric vehicles as soon as November.
Once the news hit about the deal, Tesla hit a record-high. One trading day earlier, Tesla shares were at $900 per share. By 2:00 p.m. EDT Monday, Tesla shares were 9.44 percent higher, threatening to breach 1,000.00 per share and stood at 995.56 per share.
Analysts have been bullish about Tesla stock prices, and robust EU sales helped boost Tesla share prices further. Adam Jonas of Morgan Stanley raised his predictions of Tesla to $1,200 per share. Meanwhile, Jato Dynamics announced that the Model 3 sedan was the first completely electric vehicle to dominate new vehicle sales in Europe during September.
In May 2020, Hertz Corporation filed for bankruptcy protection after the company’s revenue declined during the economic downturn at the height of the pandemic. Rental vehicle and travel demands were down, leading to fewer bookings of rental cars. Investors from Certares Management and Knighthead Capital Management have since announced that they will take over Hertz.
Only a few companies have hit a market cap of 1 trillion, most notably big tech companies Amazon, Apple, and Microsoft.