Elon Musk says Tesla has not signed deal with Hertz

Elon Musk says no contract has been signed with Hertz after the rental car company announced a deal that led to Tesla's market value surpassing $1 trillion.

Last week, shares in Tesla jumped 12.6% after Hertz said it had ordered 100,000 vehicles by the end of 2022.

However, Mr Musk tweeted: "I'd like to emphasize that no contract has been signed yet."

Yet Hertz told the BBC: "Deliveries of the Teslas already have started."

A spokeswoman said: "As we announced last week, Hertz has made an initial order of 100,000 Tesla electric vehicles and is investing in new EV (electric vehicle) charging infrastructure across the company's global operations."

Hertz refused to confirm if a contract had or had not been signed with Tesla in light of Mr Musk's tweet, adding it did not discuss details of its business relationships or discussions.

Tesla has not responded to the BBC's request for comment.

Major deal

The deal announced last week by Hertz with Tesla was the biggest-ever rental car order for electric vehicles.

"Electric vehicles are now mainstream, and we've only just begun to see rising global demand and interest," said Hertz interim boss Mark Fields.

It was reported Hertz would pay $4.2bn for 100,000 Model 3s over the next 14 months, which amounts to about a fifth of its fleet. The rental firm would also build a network of charging stations.

Hertz said that "beginning in early November and expanding through year end" customers would be able to rent a Tesla Model 3 at Hertz airport and neighbourhood locations at certain areas in the US and Europe.

But on Monday, Tesla boss Mr Musk tweeted: "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."

Tesla became the fifth company to surpass a market value of $1 trillion on 25 October, behind Apple, Microsoft, Amazon and Google-owner Alphabet.

In response to a tweet about the Hertz deal on 25 October, Mr Musk said it was "strange that moved valuation, as Tesla is very much a production ramp problem, not a demand problem".

He later added: "To be clear, cars sold to Hertz have no discount. Same price as to consumers."

Tesla shares have been trading down more than 4% in pre-market trading in the US.

It is not the first time that Mr Musk's tweets regarding his company have made the news.

In May 2020, he wiped $14bn (£11bn) off the carmaker's value after tweeting its share price was too high.

And two years earlier, a tweet about Tesla's future on the New York stock market led to regulators fining the company $20m and Mr Musk agreeing to have all further posts on the platform pre-screened by lawyers.

Recall

Tesla announced on Tuesday it was launching a pilot of 10 "supercharger" stations in the Netherlands, which will be available to all electric vehicle models.

As part of its charging network expansion plans, the company said opening up its charging sites to non-Telsa drivers was "critical for large-scale EV adoption".

Tesla has also been forced to recall 11,704 vehicles over a software problem that could cause "false forward-collision warnings and/or automatic emergency brake events".

A US National Highway Traffic Safety Administration notice said it was "not aware of any crashes or injuries" because of this problem. Tesla is fixing the problem with a software update.

Why is Elon Musk playing down talk of a deal with Hertz to sell 100,000 cars? After all, it sounds positive - and appeared to send the share price soaring.

Firstly, such a deal might actually be better news for Hertz than Tesla.

The car rental firm recently emerged from bankruptcy protection and wants to portray itself as a go-getting modern company. Running Teslas fits the bill.

But Tesla doesn't really need Hertz.

It's making cars as fast as it can, and insists there is no shortage of demand. Rental firms often buy surplus stock at a discount, but Mr Musk has made it clear if Hertz wants his cars it'll have to pay full price.

Meanwhile, the Tesla boss has an uneasy relationship with market regulators.

His public insistence that a deal with Hertz "has zero effect on our economics", and that no contract has yet been signed could be seen as a message that if Tesla's valuation is rocketing - increasing his personal wealth in the process - it isn't because of anything he has said.