Tesla stocks rise after Hertz says they struck a deal, but Musk says “no contract has been signed”

by ian

Ian Patrick, FISM News


Tesla co-founder and CEO Elon Musk responded to his company’s rise in stock by shutting down a rumor that rental car company Hertz had already purchased thousands of Tesla cars in a supposed deal between the two companies.

Hertz announced on Oct. 25 that it will be purchasing “an initial order of 100,000 Teslas by the end of 2022,” in a press release posted on their website. Hertz claims that demand and interest in electric vehicles (EVs) has increased dramatically in the past few years and this deal is “a significant investment to offer the largest EV rental fleet in North America and one of the largest in the world.”

The company then began running ads promoting their foray into providing EV fleets featuring Super Bowl Champion Tom Brady.

Upon the news, Tesla’s stock soared even reaching a $1 trillion market cap putting it among the ranks of other such companies like Apple and Microsoft. Musk tweeted at the time that it was “strange” that the deal “moved valuation” since the price of cars sold to Hertz would be the same amount as those sold to a consumer.

On Nov, 1, one Twitter user thanked Musk directly for the rise in stock to which Musk replied “You’re welcome!” However, assuming that the rise was because of the Hertz announcement, Musk also tweeted that he would “like to emphasize that no contract has been signed yet” and that the “Hertz deal has zero effect” on calculating their economics.

Obviously this news didn’t hit Tesla’s stock too well because it immediately began to drop as soon as Musk mentioned the deal hasn’t technically happened yet. But Hertz didn’t back down from its previous statement.

Lauren Luster, director of communications at Hertz, said in an emailed statement corroborated by multiple news outlets that the rental company is still “on plan” with their 100,000 Tesla offering and that Tesla deliveries “already have started.”

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

Hertz’s interim CEO Mark Fields said they will mostly be purchasing Model 3 Tesla sedans in their order.