Hertz States Tesla's Deliveries Have Started, Elon Musk Claims the Deal Has Not Been Signed

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【Summary】Hertz practically came back from the dead with a massive order of 100,000 Teslas by the end of 2022, but there seems to be some confusion with Tesla’s CEO on whether the deal is actually happening.

Original Vineeth Joel Patel    Dec 13, 2021 6:00 AM PT
Hertz States Tesla's Deliveries Have Started, Elon Musk Claims the Deal Has Not Been Signed

Roughly a week ago, Hertz announced that it would be placing an initial order of 100,000 Teslas by the end of 2022 for customers to rent. The deal practically brought the rental car company back from the dead, which was on the verge of bankruptcy just a year ago. Hertz reportedly ordered Tesla Model 3 cars in an estimated deal of $4.2 billion. While Hertz was happy to report the news, there seems to be a disagreement between the two companies.

Have The Deliveries Started?

According to CNBC, Hertz recently stated that Tesla has already started to deliver cars to the rental company for fleet use. This makes sense, as Hertz's original press release last month stated that customers would be able to rent a Model 3 as early as November. That led us to believe that Hertz was getting its first deliveries in November. Good news for Hertz and consumers that are interested in trying out an electric car.

Unfortunately, Tesla CEO Elon Musk has put out a tweet that makes us question whether Hertz is actually receiving any electric cars from the brand. As CNBC pointed out, Elon Musk took to Twitter to state that there's no deal in place with Hertz.

"If any of this is based on Hertz, I'd like to emphasize that no contract has been signed yet. 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," tweeted Musk.

Hertz Says It's On Schedule

This puts Hertz in an awkward position. Does the brand have an order for 100,000 EVs? Hertz's director of communications, Lauren Luster, declined to provide any specific details on the agreement, but stated that the company is "on plan" for its original announcement. "As we announced last week, Hertz has made an initial order of 100,000 Tesla electric vehicles and is investing in new EV charging infrastructure across the company's global operations," said Luster in a statement to CNBC. "Deliveries of the Teslas already have started. We are seeing very strong early demand for Teslas in our rental fleet, which reflects market demand for Tesla vehicles."

From an investor standpoint, investors tend to frown upon large fleet deals for automakers, because they tend to sell vehicles in large quantities at a discounted rate. Additionally, large lease deals are meant to increase total vehicle deliveries for a quarter or end-of-the-year figures, as well as to reduce bloating inventories.

Musk didn't explain when Hertz would be getting its order. But, he did reiterate just how bad Tesla's production issues are. If a deal hasn't been signed yet, we wonder if Tesla will build consumer cars before switching focus over for Hertz. We have a lot more questions, but without a PR team for Tesla, we doubt we'll be getting them anytime soon.

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