Elon Musk has put an end to Tesla’s (TSLA) historic rally by saying the Hertz agreement “is not signed” and adds that he does not believe it has any effect on Tesla’s economy.
Tesla’s share (TSLA) rose more than 55% in the last month alone.
The majority of the increase came after Hertz’s announcement that they were ordering 100,000 Tesla vehicles, and then partnered with Uber to give 50,000 of them to their drivers with the option of 100,000 more.
This sent Tesla’s share price marked.
It culminated in an 8% increase yesterday alone, which saw Tesla’s valuation rise to $ 1.2 trillion.
But this morning, Tesla’s rally has officially stopped, with the stock falling 5% in pre-market trading.
The marked drop comes after a tweet from Elon Musk in the middle of the night.
A Twitter user thanked Musk for the stock price hike, and while the CEO responded by first apparently accepting credit with a “you are welcome”, he quickly poured cold water on the rally by saying the Hertz deal should not have this. kind of influence:
The CEO said that “no contract has been signed” on the Hertz agreement and it should not have a strong effect on Tesla’s economy as the company is production limited:
“If any of this is based on Hertz, I would 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 to the same margin as to consumers. The Hertz agreement has no effect on our economy. “
When the rally first started, Musk had already pointed out that it would not speed up Tesla’s total deliveries, as the company is limited by production, not demand.
The first part of Musk’s comment is a bit worrying, as Hertz made it clear that they were “placing” an order with Tesla for 100,000 Model 3 vehicles.
They have already taken deliveries of some of them.
Since Hertz did not receive any specific discount for their order, it is possible that they went through the regular ordering process and simply put a deposit of $ 100 per. car to claim that they “placed” the order, which may not constitute a “signed” agreement.
As for the second part, it is technically true, but as we discussed Electrek podcast last week, I think the Hertz deal has more benefits for Tesla and the broader EV adoption beyond just adding 100,000 vehicles to Tesla’s lag.
In the long run, when these vehicles are in operation in both the Hertz and Uber fleets, it will help get more people to try electric cars and accelerate the market shift towards electric vehicles.
It will also encourage other large fleet managers to think bigger when it comes to electrifying their fleets.
This is just another signal that if you are considering buying a new car, like Hertz, you should consider buying an electric car.
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