Elon Musk Says Tesla Hasn’t Signed a Contract With Hertz Yet Despite the Hype

Elon Musk Says Tesla Hasn’t Signed a Contract With Hertz Yet Despite the Hype
File photo of Elon Musk, the wealthiest person in the world, in Delaware over the summer defending against a lawsuit brought by SolarCity shareholders. (Photo: Matt Rourke, AP)

Billionaire Elon Musk admitted in a late night tweet his electric car company Tesla hasn’t yet signed a contract with Hertz, despite an announcement by the rental car company on October 25 that it would be buying 100,000 new Teslas. Musk’s tweet seems to contradict Hertz’s purchase announcement last week — or, at the very least, the spirit of the announcement — which helped Tesla become one of just a handful of companies to achieve a market cap of $US1 ($1.35) trillion.

Musk’s tweet late Monday came as a response to a Twitter user called Tesla Silicon Valley Club, which sent out a graph of Tesla’s stock price and thanked the billionaire. But Musk apparently felt this was the time to come clean about all the hype.

“You’re welcome! If any of this is based on Hertz, I’d like to emphasise that no contract has been signed yet,” 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,” Musk continued.

But what about the big announcement last week that Hertz was going to buy 100,000 Teslas? If you read the press release very, very closely, there’s arguably some wiggle room that allows for the fact that no contract has been signed:

As consumer interest in electric vehicles (EV) skyrockets, Hertz today is announcing a significant investment to offer the largest EV rental fleet in North America and one of the largest in the world. This includes an initial order of 100,000 Teslas by the end of 2022 and new EV charging infrastructure across the company’s global operations.

Technically, Hertz, which left bankruptcy just four months ago, never said it had signed a purchase order for the vehicles. And you could even read the phrase “initial order of 100,000 Teslas by the end of 2022″ to mean that the order won’t be finalised until the end of 2022, not that the cars will be delivered by the end of 2022.

Obviously, people got a very different impression from the announcement by Hertz last week when the company put out a new TV ads featuring Tom Brady. And Tesla didn’t issue a press release, perhaps because it doesn’t have a public relations department anymore. Hertz did not respond to a request for comment overnight.

You only need to look at the headlines after Hertz’s announcement to see that everyone thought Hertz had formally ordered the cars from Tesla.

All of this does raise the question of why Musk felt it was important to respond to the anonymous Tesla Silicon Valley Club’s Twitter account about such a consequential deal and not issue some kind of press statement. News outlets monitor Musk’s Twitter account closely, given the fact that he wields an enormous amount of power, but there are some things that should probably be done the old fashioned way. Musk did, after all, make $US36 (A$48) billion in a single day all thanks to Tesla’s stock price after the Hertz announcement.

Elon Musk, the wealthiest person in the world, made another $US24 (A$32) billion on Monday, bringing his net worth to $US335 (A$450) billion. But Musk is apparently still sceptical that his money should be used to feed the poor. The billionaire founder of SpaceX tweeted his doubts on Sunday that a one-time donation of $US6 (A$8) billion would save 27 million people from starvation.

Musk said he’d sell Tesla stock and make the donation if $US6 (A$8) billion would solve world hunger, but the director of the UN’s World Food Program explained it wouldn’t fix world hunger forever, just address the immediate needs of 27 million people who are on the verge of starvation. Musk seemed unmoved by the plea for help.

The UN World Food Program, which won the Nobel Peace Prize in 2020, was founded in 1961. The program delivers 15 billion rations annually, at a cost of $US0.61 (A$0.82) per ration, according to the program’s website.

Musk, who has a reputation as a real prick, paid $0 in federal taxes in 2018 and it’s clear that no single person should be solely in charge of how $US335 (A$450) billion is spent. Tax the man and tax him now, we say, maybe before his house of cards collapses.