CALIFORNIA: Tesla surpasses $1 trillion valuation after Hertz order

CALIFORNIA: Tesla surpassed a market value of
$1 trillion, making it the fifth such firm to reach the milestone.

Shares in
the electric carmaker climbed 12.6% after it struck a deal to sell 100,000
vehicles to the car rental firm Hertz.

Tesla has
been the world’s most valuable carmaker for some time, but brands like Ford and
GM make more cars.

Previously
only Apple, Microsoft, Amazon and Google-owner Alphabet have reached a $1tn
valuation.

For
years, Tesla struggled to ramp up production of its cars, leading some investors
to speculate it would fail.

But last
year the company, led by billionaire Elon Musk, upped its game and became
profitable for the first time, prompting its shares to take off.

The deal
with Hertz is the biggest-ever rental car order for electric vehicles and seen
as a further vote of confidence.

Hertz
will pay $4.2bn for 100,000 Model 3s over the next 14 months, which amounts to
about a fifth of its fleet. The rental firm will also build a network of
charging stations.

Teslas
have a range of about 200 miles per charge, but there is a dearth of charging
infrastructure in the US – something the Biden administration hopes to change.

“Electric
vehicles are now mainstream, and we’ve only just begun to see rising global
demand and interest,” said Hertz interim boss Mark Fields.

Tesla
produced around 500,000 cars in 2020 – far lower than the likes of Volkswagen
(9.3 million), Toyota (7.2 million) and the Renault-Nissan-Mitsubishi Alliance
(6.8 million).

However,
Mr Musk has set an annual sales growth target of 50% and eventually hopes to
reach 20 million vehicles a year.

On
Monday, it emerged that Tesla had withdrawn its latest update of Autopilot, the
“full self-driving” car software, after drivers complained of
problems.

Some
drivers reported intermittent issues such as safety alerts sounding, despite no
danger being present.

The firm
has not said when the driver assistance software will be re-released.

In
August, the US National Highway Traffic Safety Administration opened a formal
safety probe into Autopilot system, which is in 765,000 US vehicles.

The
investigation comes following a series of 11 crashes involving Tesla models and
emergency vehicles since 2018.