Tesla's Model 3 is now Europe's best-selling car in a first for an electric vehicle

Tesla has become a trillion dollar company after its shares jumped by almost a tenth on Monday following an order for 100,000 cars from Hertz.

The car rental company placed the record order worth about $4.2bn as part of an ambitious plan to electrify its fleet, Bloomberg first reported.

Tesla’s Model 3 will be available to rent at Hertz locations in major US and European cities from next month. Customers will have access to Tesla’s network of superchargers and Hertz is also building its own charging infrastructure. 

Shares hit a record $996.57 in New York, briefly pushing the company to a $1bn valuation before falling back slightly. 

The stock has risen by 41pc this year – almost double the gain in the S&P 500 that it joined in December.

Tesla joins an elite club of US companies that includes Apple, Microsoft, Amazon and Alphabet worth more than $1 trillion.  

Tesla Model 3

Credit: Chesnot/Getty Images

Tesla was also boosted by its Model 3 claiming the title of Europe’s bestselling car – the first time an electric vehicle has overtaken its conventional rivals.

JATO Dynamics said 2.6pc of new cars sold in September were the Model 3, accounting for about 24,600 sales in 26 countries including the UK. Sales were almost 60pc higher than the same month last year.

The Model 3 starts at £42,500 in Britain.

About 18,270 Renault Clios were sold last month, down almost a quarter on last year, putting it in second place.

Felipe Munoz at JATO attributed Tesla’s strong showing to its “intensive end of quarter sales push” and other car makers cutting production because of the ongoing chip crisis that is skewing the overall market.

Tesla has Europe’s biggest share of the electric vehicle market at 24pc, with Volkswagen on 22pc and Vauxhall and Peugeot owner Stellantis on 13pc.

Total vehicle sales fell 25pc to 964,800 as the chip crisis forced manufacturers to halt production lines, squeezing supplies of new cars.

Car companies are focusing on more expensive models such as electric vehicles, which is having an impact on the market share for petrol and diesel cars.

In addition, low-emission vehicles often come with state subsidies as governments try to encourage drivers to buy them.

Copy of Tesla Model 3 production

Market share for electric vehicles has almost doubled over the past year to 23pc of the European car market, while petrol has dropped two percentage points to 57pc and diesel has plunged 10 percentage points to just 17pc.

Mr Munoz said that before the pandemic just one electric car was registered for every 10 vehicle, but they were now almost equal.

“Shifts of this magnitude are rare, and a number of factors have contributed. In addition to incentives, manufacturers have enhanced their offering with more models and better deals, and many are shifting their limited supply of semiconductors to the production of electric vehicles, instead of internal combustion vehicles,” he said.

JATO’s analysis also predicted that SUVs could soon account for one in every two cars sold in Europe, having continued their climb to represent 46.5pc of the market. Five years ago SUVs had a market share of just 25pc.

Mr Munoz said: “If the trend continues, the roads of Europe could look similar to the US, where more than half of new car sales are SUVs.”