Elon Musk Disputes Hertz Tesla Order

Hertz and Tesla Order: A Developing Situation

Recent reports indicated that Hertz intended to acquire 100,000 Tesla Model 3 vehicles for its rental services. However, Elon Musk has clarified that this order isn't yet finalized, as no formal agreement has been executed, according to Gizmodo.

Initial Announcement and Market Reaction

Hertz initially publicized a substantial investment aimed at establishing the largest electric vehicle (EV) rental fleet in North America. This included a plan for an initial order of 100,000 Teslas by the close of 2022.

This announcement, alongside a Bloomberg report and positive sales figures from Europe, contributed to a surge in Tesla’s market capitalization, pushing its value beyond $1 trillion.

Financial Context and Scrutiny

Hertz emerged from bankruptcy just four months prior, following a $6 billion acquisition by Knighthead Capital Management and other investment firms. Consequently, the announcement of a $4.2 billion EV purchase naturally drew considerable attention.

It’s important to note that Hertz’s original statement didn’t explicitly confirm a signed contract or purchase order. The wording regarding the “initial order” suggested the order placement, rather than vehicle delivery, might occur by the end of 2022.

Musk's Clarification and Impact

Musk’s statement on Twitter followed a message of gratitude from “Tesla Silicon Valley Club” regarding Tesla’s recent stock performance. He sought to moderate the enthusiasm surrounding the potential Hertz deal.

Musk asserted that any agreement with Hertz would not influence Tesla’s sales figures or profitability. He emphasized that Tesla currently experiences higher demand than its production capacity.

“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.”