Elon Musk, Hertz Seem to Disagree on Their Deal

Musk says there's no contract, while Hertz says the first of 100K Teslas are being delivered
By John Johnson,  Newser Staff
Posted Nov 2, 2021 1:10 PM CDT
Elon Musk: No, We Haven't Signed a Deal With Hertz
Tesla CEO Elon Musk.   (AP Photo/Matt Rourke, file)

Last month, Hertz made big headlines by announcing it had a huge deal with Tesla to buy 100,000 electric cars. The news sent shares of Tesla soaring. Now comes this twist courtesy of Elon Musk: "I’d like to emphasize that no contract has been signed yet," the Tesla CEO tweeted Monday night, per the Wall Street Journal. Then he tossed a little more cold water on the partnership: "Tesla has far more demand than production, therefore we will only sell cars to Hertz for the same margin as to consumers," he wrote. "Hertz deal has zero effect on our economics." Hertz, meanwhile, is standing by its original announcement.

"As we announced last week, Hertz has made an initial order of 100,000 Tesla electric vehicles and is investing in new EV charging infrastructure across the company’s global operations," said a company spokesperson. In fact, deliveries of Teslas have already started, and the company is "seeing very strong early demand for Teslas in our rental fleet," she added. So what's going on with the semantics? CNBC adds some context, noting that investors often frown on automakers that make big sales to rental companies, because the vehicles often go at a discount and the deals are an easy way to inflate sales.

That may be why Musk isn't too eager to trumpet a Hertz partnership and why he's emphasizing that Tesla isn't giving a discount. At current prices, 100,000 Teslas would go for more than $4 billion; Tesla produced 238,000 vehicles in the third quarter, so at that rate, Hertz's buy would represent about 10% of annual production. For those who see a pattern of Musk using his tweets to manipulate Tesla's share price (though in this case, Musk's Monday tweet sent the stock down), Erik Shilling of Jalopnik has a less sinister theory: Musk's tweets are "consistently bad," he writes. "Also, he’s a weird guy with a ton of different interests and not enough time for any of them, much less time to overthink tweeting." (Read more Elon Musk stories.)

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