Tesla became the first automaker valued above US$1 trillion in October 2021. Its market capitalization crossed the threshold after rental company Hertz announced an order for 100,000 Tesla vehicles, which intensified investor enthusiasm.
Tesla was founded in 2003 and initially focused on proving that battery-powered cars could be desirable and commercially viable. The Model S, Model 3, Model X and Model Y expanded its lineup, while large factories in the United States and China increased production capacity.
Tesla’s valuation was far higher than the traditional automobile industry’s because investors were pricing in future electric-vehicle growth, software revenue and energy businesses. Market capitalization is not the same as production volume: Toyota and Volkswagen generally build more vehicles, even when Tesla’s stock-market value is higher.