Hertz Says Tesla Has Started Shipping Cars, Despite Musk’s Tweet

Hertz says Tesla has already begun supplying cars to its rental fleet, although Tesla CEO Elon Musk tweeted Monday night that the automaker has yet to sign a contract with the company.

Musk said on Twitter that he would like to “emphasize that the contract has not yet been signed.” He also said that the “Hertz deal will have no impact” on the automaker’s economy as it “will only sell Hertz vehicles at the same margins as consumers.”

Lauren Luster, director of public affairs for Hertz, declined to discuss specific details of the deal, but said the company remains “on track,” announcing last week that it would offer 100,000 Tesla electric vehicles by the end of 2022.

“As we announced last week, Hertz has placed an initial order for 100,000 Tesla EVs and is investing in new EV charging infrastructure across the company,” she said in an email statement. “Tesla shipments have already begun. We see very high early demand for Tesla in our rental fleet, which reflects the market demand for Tesla vehicles. ”

Hertz shares hit a new 52-week high of $ 46 per share during Tuesday morning trading, up 35%. Tesla shares fell slightly to less than $ 1,175 a share.

Tesla Model 3 electric cars at Hertz airport.

Photo by E. R. Davidson.

Tesla did not immediately respond to comment.

Investors have traditionally frowned upon automakers when they sell large numbers of vehicles to their fleet. This is because cars and trucks sold to rental companies are usually discounted, with such deals being used to reduce bloated inventories and increase their overall vehicle supply.

Tesla hit a $ 1 trillion market capitalization for the first time a week ago after Hertz announced it would expand its battery-electric vehicle fleet with “an initial order of 100,000 Tesla by the end of 2022.”

Hertz interim CEO Mark Fields said last week that the car rental company began negotiations with Tesla “months ago” to buy cars. He described it as a “great relationship” and part of Hertz’s move to lead car rental companies in the management of a large fleet of electric vehicles.

The announcement was accompanied by a commercial featuring seven-time Super Bowl champion Tom Brady next to parked Tesla Model 3 electric sedans in a Hertz garage.

Two days after announcing the initial order for 100,000 Tesla, Hertz said it will provide up to half of the cars available for rent by Uber drivers by 2023. The company said that “if successful,” the program could be expanded to 150,000 vehicles over the next three. years.

Hertz “indicated that this ambition could be influenced by factors beyond its control, such as a shortage of semiconductor chips or other constraints.”

During the growing coronavirus pandemic, Hertz filed for bankruptcy protection, but as travel recovered somewhat and demand for rental cars increased, investors from Knighthead Capital Management and Certares Management said they would take over the company.

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