Tesla shares rose to an all-time high Monday morning following reports that Hertz placed an offer to purchase 100,000 vehicles. Hertz, a car-rental company in bankruptcy, is looking to revive its struggling business by embracing the electric-vehicle marketplace.
Tesla cars are displayed in a Palo Alto store. NurPhoto via Getty Images
The Key Facts
Tesla stock rose more than 4% to $952 in the early trading hours on Monday. This surpasses Friday's all-time closing high at $909.68 and propelling its market value to approximately $36 billion. Pre-market trading began immediately after Bloomberg reported that Hertz had ordered the vehicles to arrive before the end next year in a larger effort to electrify its rental car fleet. Wedbush analyst Dan Ives stated Monday that the $4.2 billion price tag made this order the largest ever for electric vehicles. Hertz stated that customers will be able rent the Tesla Model 3s at its locations starting in November. He also noted that the order will increase the proportion of electric vehicles within the company's global fleet to more than 20%. After falling by 3% Friday, shares of Hertz, which are traded over-the-counter, were about flat.
Hertz filed for Chapter 11 bankruptcy in May after the Covid-19 pandemic caused a huge disruption to the leisure sector. A new investor group helped the company shed more than $5 billion of debt and emerge from bankruptcy in June. Fields called the new Hertz while hinting at the company's plans to expand its electric-vehicle fleet in its restructuring efforts. This order is about 20% of nearly 500,000 Tesla vehicles sold last year.
Hertz is still in the initial stages of electrifying its rental cars fleet. However, Tesla's success in achieving this order highlights the wider adoption of electric-vehicles underway as part of the oncoming green tidal waves now hitting the U.S." Ives stated, pointing out Tesla as the clear leader among a burgeoning field that includes legacy carmakers GM, Ford, and newer firms Lucid Motors, Faraday Future, and Lucid Motors.
$940 billion This is Tesla's market capitalization after the latest boost. Tesla is now more valuable than Facebook, thanks to Hertz's surge.
Tesla CEO Elon Musk saw his fortune soar by $9.4 billion Monday morning, as shares of the company shot up. Forbes reports that Musk is the world's richest man, now worth $239 billion.
Hertz orders 100,000 Teslas in the Rental-Market Shakeup (Bloomberg).