Securing Major Customer Rental Companies
Evaluating Momentum for Electric Vehicle Transition
Musk's Asset Size Leads Amid Stock Surge
[Asia Economy New York=Special Correspondent Baek Jong-min] On the 25th (local time), U.S. electric vehicle company Tesla joined the $1 trillion market capitalization club, serving as evidence of the advent of the electric vehicle era and the restructuring of the industry. Elon Musk, CEO, who promised to open the era of electric vehicles, is also seeing his promise become a reality. On this day, Musk's personal assets surpassed the market capitalization of ExxonMobil, the world's largest oil company.
On this day, Tesla's stock price surged unusually by 12.66%. While there were expectations that Tesla's stock price would enter the $1,000 range, it was unexpected that it surpassed $1,000 just one day after entering the $900 range on a trading day. The Wall Street Journal reported that Tesla's stock price has risen exactly tenfold since the COVID-19 outbreak in March last year.
U.S. media evaluated that the announcement by rental car company Hertz to purchase 100,000 Model 3 cars, which led to Tesla's stock price surge, symbolically confirmed Tesla's status in the electric vehicle market and showed the transition to the electric vehicle era. Bloomberg News reported, "It has paved the way to make electric vehicles mainstream."
Other rental car companies are also expected to sequentially introduce electric vehicles. CNBC evaluated that Hertz sounded an alarm to rental car companies that had hesitated to adopt electric vehicles. Since the rental car industry, a major buyer of cars, has turned to electric vehicles, it means that companies that purchase cars in large quantities may also start buying electric vehicles one after another. The New York Times also analyzed this as a sign that the momentum for the transition to electric vehicles is growing. Hertz plans to start renting Model 3 vehicles from November.
This contract is also expected to resolve doubts about Tesla's production capacity, which was considered a weakness. Hertz explained that the reason for choosing Tesla as a partner was that it is the only company capable of mass-producing electric vehicles. Despite the global supply chain crisis, Tesla has been praised for responding quickly to semiconductor shortages based on its own semiconductor design capabilities.
The situation that CEO Musk worried about just four years ago in 2017, saying "We are in production hell," has now become a thing of the past. While Tesla is racing ahead, traditional automotive giants like GM and Ford have lost the advantage of mass production.
With the stock price surge on this day, Tesla's market capitalization surpassed $1 trillion. The $1 trillion market capitalization club in the U.S. stock market has only been experienced by Apple, Microsoft, Amazon, Alphabet, and Facebook. Facebook recently left the $1 trillion club due to internal whistleblower issues. CEO Musk, who has also experienced bankruptcy crises in the past, celebrated joining the $1 trillion club just before the market closed by tweeting, "1 trillion dollar club is amazing (Wild $T1mes!)."
It took Tesla 18 years to reach a market capitalization of $1 trillion after its founding. This is compared to Google taking 21 years, Amazon 24 years, Apple 42 years, and Microsoft 44 years. Tesla joined the $1 trillion club just three years after Apple did, rapidly catching up with big tech companies. The Wall Street Journal reported that it took Tesla less than two years to grow from $100 billion to $1 trillion, while Amazon took eight years.
With Tesla's stock price surge, Musk's assets also soared vertically. According to Equilar, a corporate governance data company, the value of Tesla shares and stock options held by Musk amounts to $297 billion. This is greater than the market value of Toyota, the second-largest automaker by market capitalization.
Bloomberg News reported, "Musk's assets have surpassed ExxonMobil's market capitalization ($272.4 billion)." Musk has also solidified his position as the richest person in the U.S. The assets of Jeff Bezos, founder of Amazon and ranked second, stand at $193 billion.
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