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Musk says Tesla has not signed a contract with Hertz yet, halts stock rally

Tesla Inc’s top boss Elon Musk said the company had not signed a contract with Hertz, more than a week after the car rental firm announced a massive deal with the electric carmaker. Photo: File

Tesla Inc’s top boss Elon Musk said the company had not signed a contract with Hertz, more than a week after the car rental firm announced a massive deal with the electric carmaker. Photo: File

Published Nov 2, 2021

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TESLA Inc's top boss Elon Musk said the company had not signed a contract with Hertz, more than a week after the car rental firm announced a massive deal with the electric carmaker.

Tesla's shares fell 4 percent in early trading on Tuesday, after a steep jump following the news of the biggest-ever order - 100 000 electric cars for Hertz - on October 25, which helped Tesla breach $1 trillion in market capitalisation.

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Musk tweeted late on Monday: “If any of this is based on Hertz, I’d like to emphasize that no contract has been signed yet.

“Hertz deal has zero effect on our economics.”

Tesla did not immediately respond to a request for comment.

However, Hertz said in a statement that the deliveries of the Teslas had already started.

“We are seeing very strong early demand for Teslas in our rental fleet, which reflects market demand for Tesla vehicles.”

Hertz’s interim chief executive officer Mark Fields had told Reuters last week that the order would primarily include Model 3 vehicles. Considering that Tesla’s cheapest Model 3 sedan starts at about $44 000, the order could be worth about $4.4 billion, if the entire order were for the mass-market sedan.

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“Tesla has far more demand than production, therefore we will only sell cars to Hertz for the same margin as to consumers,” Musk said.

Separately, Tesla is recalling nearly 12 000 US vehicles sold since 2017 because a communication error may cause a false forward-collision warning or unexpected activation of the automatic emergency braking system, the National Highway Traffic Safety Administration said.

REUTERS

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