Hertz deal 'isn't signed yet' - Tesla's Musk
By Abigail Townsend
Date: Tuesday 02 Nov 2021
(Sharecast News) - An agreement between Hertz and Tesla, which helped the US car manufacturer's market value surpass $1trn for the first time, has not yet been signed, Elon Musk said late on Monday.
US rental firm Hertz announced last week that it had ordered 100,000 electric cars from Tesla, with it reported that it would pay around $4.2bn for the fleet over the next 14 months. Shares in Tesla surged nearly 13% following the announcement.
At the time, Hertz interim chief executive Mark Fields said: "Electric vehicles are now mainstream, and we've only just begun to see rising global demand and interest." Hertz also said it would build a network of charging stations.
However, late on Monday Tesla chief executive Musk - who owns around 20% of the company - tweeted: "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."
Tesla's New York-listed shares closed on Monday up 8% at $1,208.59, giving it a market value of $1.2trn. However, they were off 6% in pre-market trading as at 1000 GMT on Tuesday.
Neither Hertz nor Tesla have yet commented further on Musk's tweet.
Car manufacturers often sell cars to rental companies at a discount. However, investors embraced the Tesla-Hertz deal as a sign that electric vehicles were becoming more mainstream.
Only four other companies have seen their market values surpass $1trn: Google-owner Alphabet, Amazon, Apple and Microsoft.
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