Elon Musk says Tesla (TSLA) hasn't signed contract with Hertz on 100,000 car order yet

Tesla CEO Elon Musk tweeted again, letting a fan on Twitter know that the deal with Hertz on 100,000 cars has yet to be closed.


Hey there cowpokes and buckaroos, it's time for another late night news story from your ole buddy Captain Business. Tesla's stock closed at an all-time high share price of $1208.59, valuing the company at $1.2 trillion market capitalization earlier in the day. CEO Elon Musk tweeted a reply about the recent move in shares of the company to a fan earlier tonight, signaling that the Hertz vehicle order was not that big of a deal.

In case Elon deletes the tweet here's a transcript of the whole thing

You’re welcome!

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.

Tesla (TSLA) shares are up nearly 40% in the last two weeks, largely on the news of this Hertz deal. As Musk said in the tweet, Tesla faces a number of supply chain constraints. During the TSLA Q3 2021 earnings conference call, the company explained that even if all factories were up and able to run at full capacity that they would be unable to do so due to the current logistics, labor, port, and chip shortage issues they face. As Elon Musk put it in his tweet, "Hertz deal has zero effect on [Tesla's] economics." 

Is Elon Musk trying to pull the plug on TSLA's massive run on Hertz news?
Is Elon Musk trying to pull the plug on TSLA's massive run on Hertz news?

This is the kind of chaotic honesty from a CEO that Tesla shareholders have had to deal with for many years. Musk's tweets have gotten him into trouble with the SEC in the past, but this time he seems to be attempting to throw cold water on the recent run in the stock. As the largest shareholder of the company, one may think Elon Musk would want the company to continue to go to the moon, but he has said for quite some time that he believes the stock is giving them a lot of credit for executing on their future. Tonight's tweet is another example of this honesty that may frustrate traders of TSLA shares, but has come to be appreciated from fans and loyal long-term shareholders.

It is important to note that Musk points out that demand for Tesla vehicles outweighs supply to the point where the company does not need to cut some fleet purchase agreement deal with Hertz, and that may factor into why a contract has yet to be signed. In the meantime, Hertz will just have to pay the same price per vehicle as John and Jane Q. Public. Tom Brady's sponsorship deal probably depends on it. Outside of Tampa Bay Quarterbacks, it really does seem like the Model Y and Model 3 are hit vehicles that have a long road ahead of them. 

What do you make of all this, partners? Is Tesla all hat and no cattle or are they going to grow into their trillion dollar valuation once these supply issues settle down? And when are these supply chain issues going to go away? I am trying to upgrade my GPU. Let us know in the Shacknews Chatty comments thread below.

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