Friday, October 07, 2022

Elon Musk says Tesla has not signed a contract with Hertz. Hertz says deliveries have already begun

CEO Elon Musk appears to have questioned the big jump in Tesla shares that followed his auto-announced deal with Hertz, tweeting that “the contract hasn’t been signed yet.” But Hertz objected that deliveries had already begun.

Musk responded to a tweet showing Tesla shares closed up 8.5% on Monday. “Please!” he wrote: “If any of this is based on Hertz, I would like to emphasize that the contract has not been signed yet.”

He cited an announcement last week that Hertz would buy 100,000 Tesla by the end of 2022 to help the car rental company build its electric vehicle fleet – news that raised Tesla’s market cap above $ 1 trillion for the first time.

The deal “did not affect our economy,” he continued, noting that “Tesla is in much greater demand than manufacturing, so we will only sell Hertz vehicles at the same margins as consumers.”

It is unclear what this means for the deal. Hertz has already directed a commercial with NFL star Tom Brady. And on Tuesday, its director of public affairs, Lauren Luster, said deliveries had begun at an “initial order” from the company and that it is also investing in electric vehicle charging infrastructure.

At the end of October, Hertz CEO Mark Fields said that his company’s largest investors had been in touch with Tesla for several months. Hertz, which also operates the Dollar and Thrifty brands, was hit hard in the early days of the pandemic, which disrupted business travel and rental demand. He filed for bankruptcy in May 2020 and only recently pulled out of it.

Fields says he wants a head start in a world where electric cars are the norm.

“We’re going to be experts in managing large, electrified fleets long before our competitors,” Fields said on CNBC’s Squawk Box.

Tesla shares fell sharply on Tuesday to close around $ 1,172, down 3%. Meanwhile, Hertz gained 5.9% to end the session above $ 36.

Analysts say it’s hard to imagine Musk’s benefit from disrupting the Hertz deal. If the company had paid $ 43,990 for the Model 3, as stated on Tesla’s website, the deal would have cost the automaker more than $ 4 billion. Loup Ventures’ Gene Munster says this is playing on the broader model of unpredictability that investors have learned to live with.

Musk tweeted last May that his company’s share price was too high, causing the price to plummet. In 2018, he lost his title of chairman of the board of directors after claiming that he had received $ 420 privatization funding for Tesla (an obvious marijuana joke) and later appeared to double the stake by smoking a joint on Joe Rogan’s podcast.

“What we learn over and over again – from Joe Rogan, 420 company, from saying that stocks are overvalued – is something that Ilona is really hard to read because his mood influences what he does.” Muenster said.

Musk’s broader approach “has always been Wall Street’s middle finger,” he said. “I don’t think there is any master of negotiation going on here, I think he just likes to keep investors on their toes.”

Musk put it differently in a tweet in April 2019: “My twitter at the moment is complete nonsense.”

In addition, Tesla will recall 11,700 vehicles due to the latest version of full self-driving mode, a spokesman for the National Highway Traffic Safety Administration confirmed on Tuesday.

An agency spokesman told The Post on Tuesday that Tesla notified the agency of a software bug after receiving reports of inadvertently activating the brakes of vehicles. The NHTSA is separately investigating possible flaws in Tesla’s autopilot system caused by a series of crashes involving emergency vehicles.

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