Tesla value surges past US$1 trillion as Hertz orders big

October 26, 2021October 26, 2021 Toby Hagon 2309 Views Tesla

Tesla’s stock priced has surged past US$1 trillion for the first time off the back of analyst price target updates, vehicle price increases and an order of 100,000 cars from rental company Hertz.

The Tesla market capitalisation briefly topped AUD$1 trillion in 2020 before dropping back, but it has now surged past the benchmark US$1 trillion price tag, making it one of the world’s most valuable companies.

Tesla shares briefly hit US$1045.02 per share, before easing back to US$1024.86 per share as the New York Stock Exchange closed for the day.

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That was enough to give Tesla a valuation of US$1.1 trillion as it chases stock market darlings such as Apple (US$2.46T), Microsoft (US$2.31T), Alphabet/Google (US$1.84T) and Amazon (US$1.68T).

It also surges Tesla past Facebook again (US$927b).

Tesla is also worth many multiples of the giants that once defined American manufacturing: General Motors (US$84b) and Ford (US$62b). And it’s comfortably ahead of Daimler (owner of Mercedes-Benz, at about US$103b) and Volkswagen (US$150b).

Ford is looking to defend its traditional large truck manufacturing base with the upcoming all-electric F-150 Lightning, which is years ahead of the delayed Tesla Cybertruck. General Motors is also pushing ahead with electric utes including the Silverado and Hummer.

While many major car makers have big promises of imminent EV arrivals, Tesla is delivering now with cars that are popular with those transitioning from a traditional ICE car. That includes the Model 3 that is currently the only Tesla on sale in Australia; the Model Y SUV is due early in 2022.

The Tesla Model Y is due in Australia early in 2022

The new stock price high for the world’s biggest manufacturer of electric vehicles means the stock market now ranks Tesla as being almost four times more valuable than Toyota.

That’s despite Toyota selling more than 10 times more cars that Tesla, which is undergoing an increase in earnings per vehicle sold having recently reported a US$1.6b profit for the third quarter of 2021 after selling 241,391 cars.

It also means Tesla is now worth more than the combined value of Volkswagen, Daimler, Ford, General Motors and Toyota.

Tesla’s circa US$6700 profit per vehicle sold (and trending upwards) is something investors are no doubt interested in.

Those profits per vehicle should increase following a recent US$5000 price rise on the Model S and Model X in America, which came shortly after a US$2000 price increase for the Model 3 and Model Y. The updated Model S and Model X are not due in Australia until late 2022 at the earliest.

But investors will also no doubt be buoyed by recent increases in forecasts for the company, with one tipping Tesla’s share price to top US$1200.

That’s despite increasing competition from traditional car makers and newcomers such as Polestar, Rivian, BYD and Fisker.

Another bright light for the EV innovator is steadily growing sales and the imminent opening of two new manufacturing plants, one in Germany and the other in Texas.

Also key to the Tesla share price boom is an order of 100,000 vehicles by rental company Hertz, which announced “electric vehicles are now mainstream” in confirming the deal.

Hertz says the massive order – which amounts to about six weeks of Tesla’s global production at current rates – means EVs will make up more than 20 percent of the company’s global fleet.