On Monday, Tesla became the sixth company to exceed the $1 trillion market capitalization threshold.
The electric carmaker’s stock jumped 12.6 percent after it agreed to sell 100,000 vehicles to Hertz, a car rental company.
For a long time, Tesla has been the most valued manufacturer in the world, although giants like Ford and GM produce more vehicles.
Only Apple, Microsoft, Amazon, and Alphabet, the parent company of Google, have before achieved a $1 trillion value.
Tesla has struggled to build up manufacturing of its cars for years, prompting some investors to believe the company will fail.
However, the business, helmed by billionaire Elon Musk, stepped up its game last year and became profitable for the first time, causing its stock to soar.
Mr Musk’s 23 percent stake in the company is now worth over $230 billion, according to the increase in its share price.
The Hertz agreement is the largest-ever rental car purchase for electric vehicles and is considered as a sign of confidence.
Hertz will spend $4.2 billion over the next 14 months on 100,000 Model 3s, or nearly a quarter of its fleet. A network of charging stations will also be built by the rental company.
Teslas have a range of around 200 miles on a single charge, but there is a scarcity of charging infrastructure in the United States, which the Biden administration aims to address.
“Electric vehicles have become mainstream, and we’ve just recently began to witness increased worldwide demand and interest,” said Mark Fields, interim CEO of Hertz.
In 2020, Tesla will make roughly 500,000 cars, significantly fewer than Volkswagen, which will create 9.3 million, Toyota, 7.2 million, and the Renault-Nissan-Mitsubishi Alliance, which will produce 6.8 million.
Mr Musk, on the other hand, has set a goal of 50 percent annual sales growth, with the goal of eventually reaching 20 million vehicles per year.
Tesla said on Monday that its newest upgrade of Autopilot, the “full self-driving” car software, had been withheld due to driver complaints.
Some drivers have noticed concerns with safety alarms blaring even when there is no risk.
The date for the re-release of the driver assistance software has not been announced by the company.
The US National Highway Traffic Safety Administration launched a formal safety investigation into the Autopilot technology, which is installed in 765,000 US vehicles, in August.
Since 2018, there have been 11 collisions involving Tesla cars and emergency vehicles, prompting the inquiry.