Tesla became the newest US tech giant, reaching a market value of $ 1 trillion (approximately Rs.75.550 billion) as investors cheered a major contract from Hertz and fought off criticism from a US auto security officer.
Elon Musk’s company shares closed at $ 1,024.86, up 12.7 percent, to top $ 1 trillion for the first time.
“Wild $ T1mes!” Musk said on Twitter.
The surge followed an announcement by rental car giant Hertz to buy 100,000 cars from Tesla by the end of 2022 in a mainstream automaker’s latest introduction of electric car technology.
The Hertz announcement last week followed strong Tesla gains, which showed the company’s resilience despite a semiconductor shortage that has weighed more heavily on other automakers.
Leading analysts at Morgan Stanley raised their target for Tesla from $ 894 to $ 1,200, indicating the company’s “extraordinary” revenue last quarter despite supply chain issues.
The Morgan Stanley Note predicted that Tesla will “demonstrate the trillion-dollar Tesla capabilities” over the next 12 to 18 months as it ramped up production and expanded its capabilities, model offerings and service offerings.
Criticism of the Security Council
At the rally on Monday, a letter from the National Transportation Safety Board was overlooked in which Musk was scourged for failing to implement key recommendations to protect the automaker’s driver assistance programs.
In a September 2017 report of a fatal incident in Florida, the NTSB concluded that Tesla’s driver assistance system tends to operate on roads for which it was not designed. Nor did Tesla’s program see any signs that the driver was no longer engaged.
The agency asked Tesla to take safety precautions to restrict the system to the areas for which it is intended and to warn the driver if he or she turns off.
The other five automakers who received the NTSB’s recommendations responded, outlining the steps they were taking.
“Tesla is the only manufacturer that has not officially responded to the recommendations,” wrote NTSB chair Jennifer Homendy.
Homendy described a second fatal accident in California in 2018, which also occurred on a road not intended for the driver assistance system and with an operator disengaged.
“Our crash investigations with your company’s vehicles clearly showed that the potential for abuse requires a change in the system design to ensure safety,” said Homendy.
But investors gave the Hertz announcement more weight.
The auto rental giant, which emerged from bankruptcy reorganization earlier this year, said the electric vehicles (EV) will be available “in major US markets and select cities in Europe” from early November, according to a press release.
“Electric vehicles are mainstream now, and we’ve only just begun to see increasing global demand and interest,” said Mark Fields, Hertz’s interim chief executive.
The deal with Hertz is “a huge win” for Tesla, said the Briefing.com website.
“Aside from the stroke of luck from the order itself, the availability of 100,000 new Model 3s on Hertz’s property is like a direct marketing campaign for Tesla,” said Briefing.
“After Tesla is first introduced, some of these Hertz customers could eventually become Tesla customers. In addition, the transaction represents another milestone in the wider acceptance of electric vehicles and at the same time opens up a completely new market for Tesla. “