Tesla’s stock shed value Tuesday after CEO Elon Musk said that a deal with Hertz, the largest single electric vehicle purchase, has not yet been finalized.
Last week, Tesla hit a $1 trillion market capitalization on news that car rental giant Hertz had agreed to purchase 100,000 Tesla vehicles in an effort to expand its fleet. Musk commented on the growth Monday night over Twitter and said that it should not have moved Tesla’s valuation.
“If any of this is based on Hertz, I’d like to emphasize that no contract has been signed yet,” Musk said in response to a post showing the electric vehicle manufacturer’s breakneck stock growth. “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,” Musk, the world’s wealthiest man, added.
HERTZ TO BUY 100,000 TESLAS IN LARGEST SINGLE ELECTRIC VEHICLE PURCHASE
Typically, manufacturers reduce prices for bulk sales to rental companies. Musk has suggested this was not the case in the Hertz deal and that Hertz agreed to buy the vehicles at market price, which he contends should not have a bearing on the value of Tesla.
“Strange that moved valuation, as Tesla is very much a production ramp problem, not a demand problem,” Musk said last week. “To be clear, cars sold to Hertz have no discount. Same price as to consumers.”
In a statement provided to the Washington Examiner, Hertz asserted Tuesday morning that the deal is on and that some of the fleet has already started to arrive at the company’s facilities.
“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 company said. “Deliveries of the Teslas already have started. We are seeing very strong early demand for Teslas in our rental fleet, which reflects market demand for Tesla vehicles.”
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Tesla’s stock was down nearly 3% after Musk’s tweet about the Hertz deal not being inked.
The Washington Examiner contacted Tesla for comment but did not immediately receive a response.
