No deal yet to sell 100,000 Tesla to Hertz, says Elon Musk
A single announcement by Hertz helped Tesla CEO Elon Musk to make $36 billion in a single day. Now, Tesla CEO has revealed that the electric car manufacturer has made no such deal with car rental service aggregator Hertz.
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Elon Musk's latest tweet on Monday seems to contradict Hertz's announcement. The car rental service provider Hertz on October 25 announced that they would be purchasing 100,000 new Tesla electric cars. Its announcement helped Tesla become one of the few companies in the world to achieve a market capitalisation of $1 trillion.
In response to a Tweet by Tesla Silicon Valley Club, which posted a graph of Tesla's stock price and thanked Musk, Tesla CEO wrote, “You’re welcome! If any of this is based on Hertz, I’d like to emphasize that no contract has been signed yet."
He also wrote that the electric car manufacturer has far more demand than its production capability. Therefore it will only sell cars to Hertz for the same margin as to consumers. He also mentioned that the Hertz deal has zero effect on Tesla's economics. “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," Musk added.
Interestingly, if you read the release by Hertz carefully, there is nowhere written that it signed a deal with Tesla.
“As consumer interest in electric vehicles (EV) skyrockets, Hertz today is announcing a significant investment to offer the largest EV rental fleet in North America and one of the largest in the world. This includes an initial order of 100,000 Teslas by the end of 2022 and new EV charging infrastructure across the company’s global operations," this was what Hertz wrote in its release.
Clearly, Hertz never said that it had signed a purchase order with Tesla. However, the market and enthusiasts reacted differently as they thought the deal has been finalized. No matter what happened, the ultimate gainer was Tesla.