Tesla becomes first $1 trillion car brand

Tesla has become the first car-maker to achieve a $US1 trillion ($A1.3t) valuation after the price of its shares leapt by 12.7 per cent.

Triggering the investment frenzy was news that car rental giant Hertz had placed a fleet order worth $US4.2 billion ($A5.6b) for 100,000 Model 3 sedans.

According to Hertz, the huge order of battery-powered sedans will satisfy its ambition for 20 per cent of its entire vehicle fleet to be pure-electric by the end of 2022.

Complimenting the deal, the vehicle rental firm says it will install thousands of chargers throughout its network to boost its EV infrastructure.

Tesla, meanwhile, now becomes one of only five companies trading globally worth more than a trillion dollars, alongside Apple, Microsoft and Google parent company Alphabet.

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

"The new Hertz is going to lead the way as a mobility company, starting with the largest EV rental fleet in North America and a commitment to grow our EV fleet and provide the best rental and recharging experience for leisure and business customers around the world."

Hertz says it expects 40 per cent of all US rental customers will consider renting an EV once the Model 3s become available and, to help EV newbies out, it will produce digital guidance for customers to explain the charging process and help them locate chargers.

The decision to introduce EVs on the Hertz fleet follows a 200 per cent increase in sales of electrified vehicles globally.

After Tesla's share price rally, CEO Elon Musk's 23 per cent stake in the car-maker is now estimated to be worth an incredible $US230 billion ($A306b).

As part of the new supply deal with Hertz, Tesla will deliver 100,000 Model 3s over the next 14 months.

Despite accounting for less than one per cent of all cars sold annually worldwide, Tesla is now worth as much as the nine largest car-makers combined, including the Volkswagen Group and Toyota.

However, concerns remain among some investors that, despite being first and foremost a car-maker, Wall Street continues to treat (and value) Tesla like a tech company, albeit one at the centre of recent high-profile investigations into the safety of key pieces of technology including its semi-autonomous Autopilot driver-assist system.