Musk Tweets That Tesla/Hertz Deal ‘Not Signed,’ Stock Takes 5.2% Hit

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Tesla CEO Elon Musk said that “no contract has been signed yet” with Hertz, sending the stock down this morning. Last week, Hertz announced that it had acquired 100,000 Teslas in what represented the largest electric vehicle fleet in North America and one of the largest in the world, which sent the EV stock soaring.

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Replying to a tweet about the stock being on a winning streak, Musk tweeted: “You’re welcome! 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.”

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Tesla dropped as much as 5.2% today, while Hertz rose 6.9% after an initial decline, Bloomberg reported.

Following the announcement last week, Tesla hit a $1 trillion market cap, joining the trillion-dollar market cap companies such as Apple, Amazon and Microsoft.

Related: Hertz Will Make 50,000 Teslas Available to Uber Drivers

The Wall Street Journal reported that a Hertz spokeswoman appeared to stand by its earlier announcement and that deliveries of Tesla have already started.

“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,” the Hertz spokeswoman said. “We are seeing very strong early demand for Teslas in our rental fleet, which reflects market demand for Tesla vehicles,” she continued.

Last month, Tesla reported its third-quarter earnings, exceeding analysts’ expectations. In addition. Tesla exceeded delivery expectations, announcing that it had delivered 241,300 vehicles in the third quarter despite global supply chain issues that have hindered many carmakers.

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It’s not the first time Musk commented on the deal, tweeting last week that it was “strange that moved valuation, as Tesla is very much a production ramp problem, not a demand problem.”

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Last updated: November 2, 2021

About the Author

Yaël Bizouati-Kennedy is a former full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.

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