Currently reading: Tesla boss: $4.2 billion deal with Hertz has not been signed
Elon Musk clarifies status of landmark transaction which sent Tesla's value soaring above $1 trillion
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2 mins read
2 November 2021

Tesla boss Elon Musk has clarified that the landmark deal between his EV firm and rental giant Hertz, which made headlines last week, has not yet been officially finalised. 

Hertz publicly detailed the purchase of 100,000 Tesla Model 3s in a deal worth $4.2 billion (£3bn), which prompted a huge spike in Tesla's valuation, making it the first car manufacturer ever to reach a value of $1 trillion (£725bn), with shares in the company rising by 12.6%.

At the time, Tesla was one of five companies globally trading above this valuation milestone.

But now, a week later, Musk has taken to twitter to confirm that the deal has not yet been signed, and suggested that the purchase of 100,000 Model 3s would not have any financial impact above what is normal for the brand. 

Commenting on a graph showing Tesla's skyrocketing share price, Musk said: "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."

Importantly, Musk has not indicated that the deal is in danger of falling through, but the fact that Hertz will have to pay standard retail prices for its new rental cars means they will have the same bearing on Tesla's yearly results as general-market customer cars. With demand outstripping supply, too, no solid timeframe has been given for the delivery of the Hertz cars. 

If the deal goes to plan, 20% of the company’s rental fleet will be battery electric by the end of 2022. The vehicle rental firm will also install “thousands” of EV chargers throughout its location network.

"Electric vehicles are now mainstream, and we've only just begun to see rising global demand and interest," said Hertz interim CEO Mark Fields. 

"The new Hertz is going to lead the way as a mobility company, starting with the largest EV rental fleet in North America and a commitment to grow our EV fleet and provide the best rental and recharging experience for leisure and business customers around the world."

Hertz says it will offer a “premium and differentiated rental experience” with its Tesla cars, including digital guidance for customers about EVs and an expedited rental booking process set to arrive in the near future. 

It says that 40% of its US customers are likely to consider an EV when next renting a vehicle, due to a 200% global rise in sales of electrified models. 

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The Apprentice 3 November 2021
Fine in principle, but quite a steep learning curve for someone on a short hire as the controls are very different to normal vehicles. I predict quite a few accidents as new drivers try to find a control on screen.
Paul Dalgarno 3 November 2021
The Apprentice wrote:

Fine in principle, but quite a steep learning curve for someone on a short hire as the controls are very different to normal vehicles. I predict quite a few accidents as new drivers try to find a control on screen.

Like any other rental car then? Strange that my Model 3 is the most intuitive car to learn I've ever driven. Foot on brake, into D away you go.

The Apprentice 3 November 2021
Paul Dalgarno]</p><p>[quote=The Apprentice wrote:

Fine in principle, but quite a steep learning curve for someone on a short hire as the controls are very different to normal vehicles. I predict quite a few accidents as new drivers try to find a control on screen.

Like any other rental car then? Strange that my Model 3 is the most intuitive car to learn I've ever driven. Foot on brake, into D away you go.

Calm down fanboy jeez!  Most people will have driven a range of conventional cars and on the whole they will be used to their controls and the common variations, I had a new Ford Focus on hire yesterday, never driven one before but 85% was familiar.70 year old Barbara flying in from Florida to visit her daughter in Boston isn't going to find a Tesla screen particularly intuitive whilst driving from the airport compared to the usual Ford.

Of course people will get used to them in the long term and add its quirks to their 'internal database' but its a bigger jump than most models. Not sayings its a bad jump, just a bigger one.

HiPo 289 27 October 2021

Increasingly, the big question is which legacy car maker will be unable to compete and go bust first?   Tesla is 8-10 years ahead, especially in software.  Each major sales success, like this Hertz deal, heaps more pressure on fossil cars.  It's not looking good for companies struggling to transition away from internal combustion.  Car buyers should take note and move with the times.

bol 2 November 2021
HiPo 289 wrote:

Increasingly, the big question is which legacy car maker will be unable to compete and go bust first?   Tesla is 8-10 years ahead, especially in software.  Each major sales success, like this Hertz deal, heaps more pressure on fossil cars.  It's not looking good for companies struggling to transition away from internal combustion.  Car buyers should take note and move with the times.

I'm a happy Tesla driver, and I'm delighted by the transformative effect they're having on the industry, but I really hope that the legacy manufacturers can transition fast enough to survive and keep pushing things forward. 

Citytiger 2 November 2021
HiPo 289 wrote:

Increasingly, the big question is which legacy car maker will be unable to compete and go bust first?   Tesla is 8-10 years ahead, especially in software.  Each major sales success, like this Hertz deal, heaps more pressure on fossil cars.  It's not looking good for companies struggling to transition away from internal combustion.  Car buyers should take note and move with the times.

8-10 years ahead in software, they really are not, they have a problem with their cars software not recognising first reponder vehicles and crashing into them, killing 1 person and injury many others, and they have just had to roll back their latest update because it was released in Beta and didnt work, they have been heavily critisized by Thatcham for using owners as guinea pigs. Oh but their cars have electric whoopee cushions so thats a bonus. 

fadyady 26 October 2021
Two little facts.
Tesla Model 3 the best selling car of September in UK and Europe.