Tesla CEO Elon Musk said that his electric car company has “no demand problem” — he was responding to a tweet by investor Ross Gerber who is the CEO of the investment firm Gerber Kawasaki. Ross congratulated Tesla and Elon Musk on getting a huge order of 100,000 Tesla Model 3 cars by car rental giant Hertz.
The TSLA stock price has been constantly rallying since the news of this massive order broke on Wednesday. Upon crossing $1,000 per share, Tesla gained a market valuation of $1 trillion — a landmark achievement by an 18-year-old automotive company.
However, Musk was surprised that this order ended up moving the valuation of the company, “Strange that moved valuation, as Tesla is very much a production ramp problem, not a demand problem,” he said.
What Musk is trying to imply here is that even if Tesla did not have the Hertz 100k Model 3 order at hand, the automaker still had to make cars at full capacity throughout 2022.
During the Q3 2021 Earnings Call, Tesla CFO Zachary Kirkhorn revealed that Gigafactory Shanghai combined with the Fremont car factory have reached an annual production rate of 1 million cars.
Production is expected to start at Gigafactory Texas and Giga Berlin in the coming weeks and months which will further add to Tesla’s capacity.
Elon Musk revealed an interesting fact about the Hertz order, “To be clear, cars sold to Hertz have no discount. Same price as to consumers,” he clarified. At $43,990 apiece multiplied to 100k Model 3 cars, this makes it a $4.2 billion dollar deal. And according to Hertz, it’s just an “initial order“, there’s more to come in the future.
The Tesla stock price is till surging today, as of this writing one TSLA share is trading at ~$1050 at NASDAQ. This has pumped the market valuation of Tesla to $1.04T.
October 25, 2021, was the biggest day in Tesla history since its IPO, the share price increased a staggering $115 per share, the biggest ever for TSLA in a single day. Rob Maurer from Tesla Daily podcast explains it better with his expertise with Wall Street (video below).