Tesla, founded by Elon Musk, reaches a $1 trillion valuation after receiving a record 100,000 orders in a single day
Tesla, founded by Elon Musk, reaches a $1 trillion valuation after receiving a record 100,000 orders in a single day
A trillion-dollar valuation has now been achieved by Elon Musk's electric vehicle company, making it the sixth company in US history to achieve this milestone.
Following a more than 12 percent increase in its share price on Monday, which ended the day at $1,025, the company has joined the ranks of Apple, Microsoft, Google, Amazon, and Facebook as companies with a trillion-dollar valuation.
Tesla's stock price surge and subsequent increase in overall valuation are being bolstered by two pieces of positive news the company received on Monday, according to the company.
Tesla's stock price soared after Hertz, the rental car giant, announced that it had placed a record order for 100,000 Tesla vehicles for its fleet. This is the largest single order placed by the automaker in its history.
Tesla had a market capitalization of well over $900 billion as of Friday. After receiving additional comments from influential auto analyst Adam Jonas, who recently increased his price target for Tesla to $1,200 per share, Tesla surpassed the $1 trillion valuation mark for the first time ever on Monday.
The increasing value of Tesla cars
A current valuation of $2.5 trillion places Tesla at a lower than half of the value of Apple and Microsoft, which are each valued at $2.3 trillion. While recent streaks of strong earnings have assisted the automaker's stock price in October, the stock has gained nearly 30% since the beginning of the month.
The use of electric vehicles by consumers is rapidly increasing, and Tesla has been enjoying a successful run recently. It sold approximately 500,000 vehicles last year, but the company has already sold 627,000 vehicles this year, according to the company.
This increase comes at a time when other automakers are struggling to build cars due to a shortage of chips and are considering closing plants due to a shortage of parts.
Tesla is essentially operating at full capacity because chipmakers have been generous in sending their products to Tesla, as supplying EV makers is simply easier and more profitable than supplying traditional manufacturers of semiconductors.
This latest development comes only four months after Tesla was forced to recall 285,000 vehicles in China due to cruise-control malfunctions, a situation that occurred in the United States as well. However, the company expects to sell approximately 1 million vehicles this year, with annual sales increasing by 50% over the next four years, according to the company's forecast.
In Conclusion
Tesla became the second-fastest company in history to reach a $1 trillion valuation, doing so in just 18 years, making it the second fastest company in history.
For comparison, Facebook reached the $1 trillion mark in June 2017, 17 years after its founding, but it is far ahead of Alphabet's Google, which reached the milestone after 21 years in business.
With a market capitalization of $1 Trillion and a history of 24 years, 44 years, and 46 years, Amazon, Apple and Microsoft have all reached this milestone.
After Tesla's stock price soared by more than 20% in one day, Elon Musk's net worth increased by more than $20 billion. Musk owns a 22.4 percent stake in the electric vehicle company, according to Forbes. Musk has surpassed Bill Gates as the richest man on the planet, amassing a net worth of more than $250 billion.
