Hertz has purchased 100,000 Tesla vehicles for its rental offerings in the U.S. and in parts of Europe, as the company pushes to try to electrify its fleet of rental cars, the company announced Oct 25.
But Elon Musk said no contract had been signed and that Hertz would be subject to the same pricing and supply chain constraints as other consumers, causing Tesla stock to drop on Nov. 2 after reaching record highs and pushing past a trillion dollar valuation following the Hertz announcement.
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.
— Elon Musk (@elonmusk) November 2, 2021
The order will make 20% of Hertz's cars electric, and is part of a broader push by the company to electrify most of its fleet, according to a Bloomberg report. Tesla car renters will be able to access the current Tesla charging stations across the U.S., and Hertz plans to help install thousands of additional chargers throughout its network.
The deal was worth more than $4 billion revenue to Tesla and is the largest order ever placed to the company, according to the Bloomberg report. It's one of the largest purchases of electric vehicles ever, along with Amazon's agreement to buy 100,000 electric trucks from Rivian. Rivian is still ramping up production, though, while Tesla is ready to go: Hertz expects that the first section of its order will arrive in November of this year, though the company warned that its plans over the next few years could be delayed by semiconductor chip shortages or other supply chain issues. Tesla CEO Elon Musk said in late September that he believes the semiconductor chip shortage is a "short-term problem" that should be over by the end of 2021.
Climate TRACE's data show emissions at the facility-level.Image: Climate TRACE