Just over a week ago, Hertz announced that it has placed an initial order for 100,000 Tesla EVs, but Elon Musk says that the deal has not yet been signed
by Isaac Atienza, on LISTEN 02:20On October 25, Hertz announced an initial order for 100,000 Teslas. The order would have given Hertz the title of having the largest electric vehicle (EV) rental fleet in North America. Unfortunately, this deal has not yet been signed by Tesla, according to a recent tweet by its CEO Elon Musk.
The tweet, however, does not specifically state that the deal won’t push through, so there could be a chance that Tesla will still fulfill Hertz’s order. However, while rental car companies often benefit from discounts when ordering vehicles in large quantities, this will not be the case with Tesla.
"Tesla has far more demand than production, therefore we will only sell cars to Hertz for the same margin as to consumers," says Elon Musk, CEO of Tesla. "Hertz deal has zero effect on our economics."
Following the announcement on October 25, the stock values of Tesla rose past $1,000 per share, pushing the company’s overall market value at more than $1 trillion. Hertz’s order led investors to think that EVs have reached a point of becoming mainstream.
Hertz recently came out of bankruptcy, and its deal with Tesla is supposed to be a bold move to eventually migrate away from gasoline-powered cars. If this deal indeed pushes through, EVs will make up 20 percent of Hertz’s fleet. The company even announced that in addition to the already existing Tesla Superchargers, thousands of Level 2 and DC chargers will also be installed throughout its location network. Bloomberg estimates that the value of Hertz’s order is worth $4.2 billion.
"Electric vehicles are now mainstream, and we've only just begun to see rising global demand and interest," said Hertz interim CEO Mark Fields. "The new Hertz is going to lead the way as a mobility company, starting with the largest EV rental fleet in North America and a commitment to grow our EV fleet and provide the best rental and recharging experience for leisure and business customers around the world."
After Elon Musk’s recent tweet, Tesla’s stock value fell by as much as 4 percent on Tuesday during afternoon trading, though the company is still valued at more than $1 trillion.
