Tesla Inc on Monday neared $1 trillion in market capitalization as the company founded by Elon Musk received its biggest-ever order from Hertz, which announced plans to buy 100,000 electric rental cars.

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Tesla shares opened up 4.5% at $950.53, a new record high, following the order. Shares were also buoyed by news of the company`s Model 3 becoming the first electric vehicle to top monthly sales of new cars in Europe.

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https://www.reuters.com/business/autos-transportation/tesla-delivers-241... 241,300 electric cars globally in the third quarter, even as it warned that supply chain headwinds https://www.reuters.com/business/autos-transportation/tesla-beats-quarte... would pressure margins.

Tesla`s cheapest Model 3 sedan starts at about $44,000, making this order worth about $4.4 billion, if the entire order were for its mass-market sedan.

Fields declined to say how much Hertz was paying for the order. Tesla was not immediately available for comment.

With the current order, Hertz said EVs will make up more than 20% of its global fleet.

"It (the order) puts an exclamation point under guidance for 50%+ growth in deliveries," Roth Capital analyst Craig Irwin said. "Another solid piece of evidence EVs are going mainstream."

The car rental firm also said it was installing thousands of chargers throughout its network. Customers who rent a Tesla Model 3 will have access to 3,000 Tesla supercharging stations throughout the United States and Europe.

"Electric vehicles are now mainstream, and we`ve only just begun to see rising global demand and interest," said Hertz interim Chief Executive Officer Mark Fields.

U.S. President Joe Biden has made it a priority to support the rollout of electric vehicles to combat climate change, but a lack of charging network infrastructure could remain a key hurdle to his ambitious plan.

Analysts at Morgan Stanley bumped their price target on Tesla by 33% as the brokerage expects the electric carmaker to keep posting higher volumes, reaching more than 8 million deliveries in 2030.

A Cox Automotive study said Americans are hesitant to buy EVs due to anxieties about the ranges of the vehicles and high price tags, as well as weak charging infrastructure.

Bloomberg News was first to report about the order.

Hertz had filed for bankruptcy protection last year as travel demand sank during the height of the pandemic and talks with creditors failed to provide relief.

It was rescued by a group of investors including Knighthead Capital Management, Certares Opportunities and Apollo Capital Management.