Hertz Says It's Buying 100,000 Teslas, But Elon Musk Tweets 'No Contract Signed'

Hertz announced an order of 100,000 Tesla electric cars to add to its fleet last week, although Elon Musk tweeted "no contract has been signed yet" between the companies on Monday, the Associated Press reported.

Hertz responded to Musk's tweet in an email Tuesday, saying that its plans haven't changed.

"As we announced last week, Hertz has made an initial order of 100,000 Tesla electric vehicles by the end of 2022 and is investing in new EV charging infrastructure across the company's global operations," the company said in an email. "Deliveries of the Teslas already have started, and consumer reaction to our commitment to lead in electrification has been beyond our expectations."

News of the deal last week triggered an increase in Tesla's stock, driving the market value over the $1 trillion mark for the first time. Shortly after the market closed Monday, an account called Tesla Silicon Valley Club tweeted about Tesla's 8.5 percent gain and thanked Musk. Musk tweeted a reply hours later: "You're welcome! If any of this is based on Hertz, I'd like to emphasize that no contract has been signed yet."

Financial details of the deal, such as how much Hertz could pay per car or the total price of the deal, were not revealed, although Musk said in the same tweet reply Monday that Hertz would not be receiving a discount.

"Tesla has far more demand than production, therefore we will only sell cars to Hertz for the same margin as to consumers," Musk's tweet said. "Hertz deal has zero effect on our economics."

For more reporting from the Associated Press, see below.

Tesla
Last week, Hertz announced an order of 100,000 Tesla electric cars to add to its fleet, although Elon Musk tweeted “no contract has been signed yet” between the companies on Monday. Above, a Tesla electric vehicle sits in a charging station at a dealership in Dedham, Massachusetts, on February 18, 2021. Steven Senne/Associated Press

In an interview with AP last week, Mark Fields, Hertz's interim CEO, said that Teslas were already arriving at the company's sites and should be available to rent sometime this month.

It's not entirely clear why Musk would complicate or potentially sabotage the Hertz deal, but public comments like his tend to be about gaining leverage in negotiations.

Bill Selesky, a senior analyst with Argus Research, suggests Musk understands his brand's value as a leader in electric vehicles and is trying to wring as much as he can out of Hertz.

"Hertz, if they do a deal with Tesla, will instantly be recognized as part of the EV revolution, not the problem," Selesky said.

Shares of Tesla fell 1.5 percent in early trading Tuesday, to $1,190 per share.