Electric car manufacturer Tesla reached a $1 trillion valuation.
On Monday, shares rose nearly 13% in value, hitting a price of $1,024.86 by market close. The stock price has more than doubled in the past year; at the end of October 2020, shares sold for roughly $420.
The Wall Street Journal reports that a deal with rental car company Hertz caused the price surge:
Helping Tesla cross the mark Monday was news that Hertz Global Holdings Inc. had ordered 100,000 vehicles from the electric vehicle maker to stock its rental-car fleet, a major bulk purchase that could help the car company get more of its cars into the hands of mainstream consumers.
Electric vehicles will comprise more than 20% of the company’s global fleet with the current order, Hertz said Monday. The rental-car company said it introduced electric vehicles into its fleet in 2011.
Tesla is reaching the highest levels of profitability in its history. The firm — which is led by entrepreneur and SpaceX CEO Elon Musk — brought in $13.76 billion in revenue during the third quarter of 2021.
In the second quarter, it earned $12 billion in revenue and $1.1 billion in profit, exceeding analysts’ expectations of $11.4 billion in revenue and $600 million in profit.
Musk, who was absent from the most recent earnings call, explained in July that the company’s greatest challenge is securing microcontroller chips: “Fear of running out is causing every company to overorder — like the toilet-paper shortage, but at epic scale.” Nevertheless, Tesla avoided the shortage by developing software for chips made by new suppliers.
Earlier this month, Musk announced that Tesla would move its headquarters from California to Texas.
“It’s tough for people to afford houses, and people have to come in from far away,” Musk explained. “There’s a limit to how big you can scale in the Bay Area. In Austin our factory is like five minutes from the airport, 15 minutes from Downtown.”
Last year, Musk expressed frustration with the state’s aggressive COVID-19 lockdown policies and their effect upon production. He threatened to leave the state on social media: “Frankly, this is the final straw. Tesla will now move its HQ and future programs to Texas/Nevada immediately. If we even retain Fremont manufacturing activity at all, it will be dependen [sic] on how Tesla is treated in the future.”
“Tesla is the last carmaker left in CA,” Musk observed.