Topline
Shares of Tesla skyrocketed to a new all-time high Monday after recently bankrupt Hertz announced it placed the company’s biggest order ever, buying 100,000 Tesla cars in a bid to turn around its ailing car-rental business.
Key Facts
Tesla stock climbed more than 12% on Monday to about $1,025, surpassing a previous record of $909.68 set Friday and propelling the carmaker’s market value to slightly more than $1 trillion.
The surge started in premarket trading immediately after Bloomberg reported Hertz ordered 100,000 Tesla vehicles to be delivered before the end of next year as part of a broader effort to electrify its rental-car fleet.
In a Monday morning note, Wedbush analyst Dan Ives said the order marks not only Tesla’s largest order to date, but also the biggest electric vehicle order ever placed, thanks to a hefty price tag of $4.2 billion.
In a statement, Hertz said customers will be able to rent the Tesla Model 3s from its locations beginning in early November and pointed out the order will help electric vehicles constitute more than 20% of the company’s global fleet.
Shares of Hertz, which trade over the counter and are no longer listed on a major exchange, also jumped about 10% on Monday.
Crucial Quote
“While Hertz is in the early stages of electrifying its rental car fleet, Tesla getting an order of this magnitude highlights the broader electric-vehicle adoption under way as part of this oncoming green tidal wave now hitting the U.S.,” Ives said, pointing to Tesla as the clear leader in a burgeoning field of manufacturers that also include legacy carmakers GM and Ford, as well as newer firms Lucid Motors and Faraday Future.
Surprising Fact
The Hertz-fueled surge has helped make Tesla more valuable than social media giant Facebook, which is worth about $918 billion on Monday. In the United States, only Apple, Microsoft, Amazon and Google-parent Alphabet are worth more than Tesla.
Tangent
Tesla CEO Elon Musk’s fortune grew by a staggering $25 billion Monday as the company’s stock soared. The world’s richest person, Musk is now worth about $255 billion, according to Forbes.
Key Background
Hertz filed for Chapter 11 bankruptcy last May as the Covid-19 pandemic dealt a massive blow to demand in the leisure industry. The company emerged from bankruptcy this June after shedding more than $5 billion in debt, thanks in part to a new group of investors. In a Monday statement, Fields touted “the new Hertz” while teasing the company’s commitment to grow its electric-vehicle fleet as part of its restructuring efforts. The order represents about 20% of the nearly 500,000 vehicles Tesla sold last year.
Further Reading
Elon Musk Is Nearly $14 Billion Richer After Hertz Order Pushes Tesla Stock To Record Levels (Forbes)
Hertz Orders 100,000 Teslas in Rental-Market Shake-Up (Bloomberg)
