Elon Musk now more valuable than Exxon’s market capitalisation

Elon Musk (Illustration: Moneycontrol)

Tesla Inc surpassed $1 trillion in market value on October 25 after landing its biggest-ever order from rental car company Hertz, a deal that reinforced the electric car leader's ambitions to top the entire auto industry in sales over the next decade.

Tesla CEO Elon Musk also celebrated the electric vehicle maker reaching the milestone $1 trillion market cap. With this, Musk is now more valuable than international gas company Exxon's market capitalisation.

Wild $T1mes!

— Elon Musk (@elonmusk) October 25, 2021

Also reacting to the news, closer home, Zerodha co-founder NIthin Kamat wrote on Twitter: "No longer just a car company, soon a sovereign nation?" He also attached a picture of the company's stock price on NASDAQ in his post.

No longer just a car company, soon a sovereign nation? @elonmuskpic.twitter.com/fk25ugcdr0 — Nikhil Kamath (@nikhilkamathcio) October 25, 2021

Tesla shares surged as much as 14.9 percent to $1,045.02, making it the world's most valuable automaker according to Reuters calculations based on its latest filing. Tesla shares closed up 12.7 percent at $1,024.86.

Musk further expressed surprise at the velocity of the surge, in a reply to Ross Gerber, co-founder of the investment fund Gerber Kawasaki and a Tesla shareholder.

"Strange that moved valuation, as Tesla is very much a production ramp problem, not a demand problem," he said.

Notably, Tesla is the first carmaker to join the elite club of trillion-dollar companies that includes Apple Inc, Amazon.com Inc, Microsoft Corp and Alphabet Inc.

Most automakers do not boast about sales to rental car companies, often made at discounts to unload slow-selling models. But, for Tesla and its investors, Hertz's decision to order 100,000 Tesla vehicles by the end of 2022 showed electric vehicles are no longer a niche product, but will dominate the mass car market in the near future.

Tesla Chief Executive Elon Musk has set an annual sales growth target of 50 percent, on average, eventually reaching 20 million vehicles a year. That would be more than twice the volume of current sales leaders Volkswagen AG and Toyota Motor Corp.