Tesla & Hertz
Last week, car rental company Hertz announced that it ordered 100,000 electric vehicles from Tesla (#tesla). Investors were bullish on the news and quickly bought up Tesla shares, sending the company’s market capitalization past $1 trillion. Buying over 100,000 Tesla vehicles is a far cry from the bankruptcy Hertz experienced during the emerging covid pandemic.
Although Hertz claims Tesla has already started delivering cars for Hertz’ fleet, Tesla CEO Elon Musk says this isn’t true. On Monday night, Musk tweeted he’d like to “emphasize that no contract has been signed yet.” Musk also wondered why the Hertz deal sent Tesla’s stock soaring. He says it’s strange the deal increased Tesla’s valuation since they are selling the cars to Hertz for the same price they sell to consumers.
Strangely, the two companies are claiming two different things. Has Tesla started delivering the cars to Hertz or not? If deliveries haven’t begun, is Hertz lying to the public?
Hertz says talks with Tesla about purchasing its electric vehicles began months ago as Hertz looks to lead rental companies in adding EVs to its inventory. After publicly announcing the deal, Hertz said that up to half of the Tesla cars will be available for Uber drivers to rent by 2023. If successful, Hertz said it could purchase 50,000 more EVs over the next three years.
Despite Musk’s refutation that deliveries have begun, Hertz stock reached a new 52-week high on Tuesday.
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.