Last week, a press release from Hertz indicated that the rental company had placed an order for 100,000 Tesla Model 3s for its rental fleet. Late yesterday, however, Elon Musk tweeted that the order is far from firm, saying that “no contract has been signed yet,” Gizmodo has reported.
Hertz’s announcement stated that it made “a significant investment to offer the largest EV rental fleet in North America… [which] includes an initial order of 100,000 Tesla’s by the end of 2022.” That release and a report from Bloomberg, combined with other good news about sales in Europe, may have motivated investors to push Tesla’s value over the $1 trillion mark.
If any of this is based on Hertz, I’d like to emphasize that no contract has been signed yet.
Tesla has far more demand than production, therefore we will only sell cars to Hertz for the same margin as to consumers.
Hertz deal has zero effect on our economics.
— Elon Musk (@elonmusk) November 2, 2021
Hertz only left bankruptcy four months ago after being purchased by distressed-debt firm Knighthead Capital Management and other firms for $6 billion. As such, announcing a purchase of 100,000 EVs valued at around $4.2 billion obviously raised eyebrows.
As Gizmodo pointed out, though, Hertz technically never said it signed a contract or purchase order for the vehicles. The phrase “an initial order of 100,000 Tesla’s by the end of 2022” could be taken to mean that the order itself and not the vehicle deliveries will happen at the end of 2022. Tesla itself never responded to the initial news.
Musk’s tweet came in reply to Twitter user “Tesla Silicon Valley Club,” which was thanking him for Tesla’s recent stock price rise. He appeared to want to dampen down some of that hype, however, stating that any Hertz deal would have no impact on the company’s sales and bottom line.
“Tesla has far more demand than production, therefore we will only sell cars to Hertz for the same margin as to consumers. Hertz deal has zero effect on our economics.”
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