November 28, 2021

Tesla: Hertz places an astronomical order for 100,000 cars

ECONOMY – Testa and Elon Musk make history a bit more. The firm of Elon Musk, boosted on Wall Street by a mega-order of 100,000 electric vehicles from the rental company Hertz by the end of 2022, entered Monday, October 25 in the very select club of companies worth more than $ 1 trillion on the stock market .

Investors have dismissed a new alert issued by the US office in charge of transportation safety, the NTSB, which sharply criticized the group on Monday for ignoring its recommendations on its driver assistance system .

The group’s share soared 12.66%, ending at $ 1,024.86 on Wall Street, giving it a market cap of $ 1,029 billion. Elon Musk also celebrated the news on Twitter. “Wild $ T1mes” (literally “wild times”), he posted, playing with the numbers and letters to write the amount, $ 1 trillion in English.

Only Apple, Microsoft, Google and Amazon are currently worth more in New York City. And Tesla is worth 12 times more than America’s biggest car seller, General Motors.

This outbreak also consolidates the position of the richest man in the world for Elon Musk, who according to the firm Factset, has about 17% of the shares of the company.

The stock had already climbed after the release of earnings last week for the automaker, which again saw record third-quarter sales and profits, despite supply issues and semiconductor shortages affecting the entire market. automotive industry. In other good news, the Tesla Model 3 ranked at the top of the European bestsellers in September.

Electric vehicles on the rise in the United States

For the boss of the car rental company, Mark Fields, these “have become consumer products” and this is only the beginning.

Hertz is betting heavily on this new strategy, even hiring American football star Tom Brady to promote it. With the Tesla, electric cars should represent more than 20% of its fleet.

“An order of this magnitude (…) highlights the gradual adoption of electric vehicles in the United States,” notes analyst Dan Ives of Wedbush. The country seems to be catching up with China and Europe, he says.

Even if the traditional manufacturers have recently put the accelerator on the electric, the group of Elon Musk keeps for the moment one step ahead. Not only is the growth of its turnover in a difficult context for the automotive sector is “extraordinary”, say analysts at Morgan Stanley. But the company is also one of the most profitable in the sector.

It will soon expand its production capacities by adding to its factories in Fremont, California and Shanghai, China, two new sites, in Texas and Berlin.

Fears about autonomous driving

Tesla will also be able to rely more and more on ancillary activities, such as its network of charging stations, its automobile insurance or its autonomous driving software, add analysts from Morgan Stanley.

On this last point, regulators do not always look favorably on the group’s progress, like the letter sent Monday, October 25 by the NTSB to Elon Musk.

The agency, which says it is “very worried”, criticizes him for never having explained how he intended to implement the recommendations issued after an accident in 2016 even though he is currently experimenting with new functionalities in real conditions.

In addition to the Autopilot system already offered on its cars, Tesla has been testing since early October a new version of its driving assistance system, nicknamed Full Self Driving Beta (or FSD Beta), with a group of drivers selected by him, without having previously referred to the competent authorities.

Design flaws

This test got another hook this weekend, with Tesla temporarily withdrawing a new version of FSD Beta shortly after launch for unspecified “issues”.

“You said ‘safety is always the top priority in designing a Tesla,’” the letter stresses. However, “this statement is completely undermined by the announcement that Tesla drivers can request to use FSD Beta both on highways and in urban areas when you have not remedied the design flaws” at the origin of several accidents, it is added.

The NTSB notably recommended to Tesla, as well as to five other car manufacturers, to incorporate tools in their driving assistance systems limiting their use to the conditions for which they are intended. It also recommended developing applications to determine the moments when the driver is no longer sufficiently attentive.

Only Tesla never responded, regrets the NTSB.

Also to see on The HuffPost: In a Tesla, he travels more than 500 km without touching the steering wheel