Tesla Surpasses $1 Trillion, Elon Musk Is Now Worth More

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What has happened?

Tesla surpassed a market value of $1 trillion on Monday, making it the fifth such firm to reach the milestone.
Previously only Apple, Microsoft, Amazon and Google-owner Alphabet have reached a $1tn valuation.
Tesla has been the world’s most valuable carmaker for some time, but brands like Ford and GM make more cars.
Shares in the electric carmaker climbed 12.6% after it struck a deal to sell 100,000 vehicles to the car rental firm Hertz.
For years, Tesla struggled to ramp up production of its cars, leading some investors to speculate it would fail.
But last year the company, led by billionaire Elon Musk, upped its game and became profitable for the first time, prompting its shares to take off.

Following the jump in its share price, Mr Musk’s 23% stake in the business is worth around $230bn.
The deal with Hertz is the biggest-ever rental car order for electric vehicles and seen as a further vote of confidence.

Hertz will pay $4.2bn for 100,000 Model 3s over the next 14 months, which amounts to about a fifth of its fleet.
The rental firm will also build a network of charging stations.
Teslas have a range of about 350 miles per charge, but there is a dearth of charging infrastructure in the US – something the Biden administration hopes to change.

Only a handful of publicly traded companies have managed to achieve $1 trillion and they are all technology companies.
Amazon joined this elite club in January last year, 23 years after becoming a public company.
In comparison, it took Tesla headed by Elon Musk just 11 years.
What makes Tesla’s achievement all the more remarkable is that it is the first carmaker to hit this milestone.
Tesla is now worth as much as the combined market cap of the nine largest carmakers around the world, including automotive giants like Volkswagen and Toyota.
Yet Tesla makes up less than 1% of global car sales.
Elon Musk and company are being rewarded for anticipating the future direction of the industry.
While Tesla may be a car company, Wall Street treats it – and values it – like a tech company.
However, Mr Musk has set an annual sales growth target of 50% and eventually hopes to reach 20 million vehicles a year.

Elon Musk’s net worth has surpassed $300 billion, making him the first person on the planet to reach that milestone.
It also means the Tesla chief executive is worth tens of billions more than the second-richest person on earth, Amazon.com founder Jeff Bezos.
Musk was worth $302 billion as of Thursday, according to the Bloomberg Billionaires Index.

At more than $300 billion, Musk’s net worth is higher that Pakistan’s GDP for 2020-21, which stood at $278.3 billion (at current market prices) in 2020-21.
With the Hertz deal, his wealth increased by $36 billion with the deal, the biggest one-day gain in the history of Bloomberg’s Billionaire Index, a daily ranking of the world’s richest launched in 2012.

However, the majority of Musk’s net worth is tied up in shares and options of Tesla, and some analysts believe the company’s stock is overvalued.
He also owns Space X, which is a private company valued at $100 billion.

In an article published Wednesday, The New York Timessaid Tesla is very “different” from other trillion-dollar companies.
Among other factors, it noted that Tesla has a junk bond rating, which means a high yield but high risk.
“Tesla’s nearly $10 billion in long-term debt was recently raised to BB+, one level below investment grade,” it wrote.
The report also said “Tesla’s sales and earnings are far lower than others”.
Its sales forecast for next year is about $6 billion, which is one fifth of Amazon’s forecast, according to the NYT
Then there is the 2018 fraud lawsuit by the US Securities and Exchange Commission that Musk and Tesla settled for $40 million, although without admitting guilt.
The commission had alleged that Musk misled investors by tweeting about a potential buyout of his company.