Tesla joins trillion-dollar valuation club after new EV rental deal

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Tesla recently reported a fivefold increase in its net income compared to last year, despite a global chip shortage affecting the auto industry.

Tesla has become the sixth US company to exceed $1tn in valuation, after landing a major deal with car rental company Hertz.

It joins Apple, Amazon, Microsoft, Facebook and Google parent company Alphabet in the trillion-dollar league of tech companies, and holds onto its position as the world’s most valuable carmaker.

Florida-headquartered Hertz has made an initial order of 100,000 Teslas by the end of 2022 and new EV charging infrastructure across the company’s global operations. The move will mean that EVs comprise more than a fifth of Hertz’s total global fleet.

“Electric vehicles are now mainstream, and we’ve only just begun to see rising global demand and interest,” said Hertz interim CEO Mark Fields in a statement. “Hertz is going to lead the way as a mobility company, starting with the largest EV rental fleet in North America.

Last week, Tesla reported net income of $1.62bn in the third quarter of the year, up from $331m in the same period last year, despite a global chip shortage that has affected the automobile industry among other sectors.

The company’s growth has been particularly strong in China, where, according to CNBC, sales have grown to nearly half the size of its US sales. China’s share of Tesla’s global sales is now at 22.6pc, up from less than 20pc last year.

A surge in Tesla’s share price yesterday (25 October), which crossed the $1,000 mark for the first time, prompted CEO Elon Musk to express his surprise on Twitter.

Last week, Musk said he wants Tesla to capitalise on the rise in demand for EVs by setting a sales growth target of 50pc, eventually selling 20m vehicles a year. That is more than twice the volume of current auto sales leaders Volkswagen and Toyota, according to Reuters.

Tesla also announced the launch of new research and data centres in Shanghai yesterday, in a bid to comply with the Chinese government’s request to ensure that data collected in the country stays in the country.

In the US, however, the auto giant has been facing fresh regulatory pressures. The US National Transportation Safety Board (NTSB) voiced its concern over Tesla rolling out its full self-driving software. In a letter to Musk, the NTSB interim chief said that Tesla has not officially responded to the its questions about the automated driving system’s safety.

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