the CEO said in reference to Tesla’s share price which rose more than 8%. “Tesla has a lot more demand than production, so we will only sell cars to Hertz for the same consumer margin. The deal with Hertz has no effect on our economy. “
Meanwhile, Hertz stated that its plan to purchase 100,000 Tesla Model 3s by the end of 2022 what’s still there. Most had assumed that the rental agency had entered into an agreement to purchase the discounted walking vehicles. But there were no official details relating to the finances of the deal released at the time of the original announcement.
Mark Fields, Hertz’s interim CEO, said Tesla products are already arriving across the country. The company is obviously committed to purchasing electric vehicles as a way to fill its fleet after selling more cars than normal during a tough 2020 which included Hertz declares bankruptcy under Chapter 11. As a byproduct, it also scores social brownie points by pretending that buying a bunch of zero-emission vehicles means actively saving the environment while helping spur the electric revolution. This could also help test its fleet in the future by governments interested in applying incentives to companies that prioritize electric vehicles and punish those that maintain internal combustion.
Tesla’s goals are a little more difficult to define. Musks’ chatter somehow jeopardizes what Hertz is trying to do by making it seem like there was never a deal in the first place. If no deal has been signed, perhaps there has never been any deal and Hertz is simply trying to capture some of Tesla’s buzz by putting him in a position where he felt compelled to offer a wholesale discount. It could also be argued that it would have been in the automaker’s best interest to play along so that it could ride the stock market wave.
But the deal would have been worth a few billion and probably hurts Hertz more to abandon the plan than Tesla. The automaker has repeatedly said it wants to increase capacity to meet demand, so there aren’t many reasons to pursue fleet sales at this juncture. Our best guess is that Elon was publicly trying to negotiate a better deal with Hertz before the deal was finalized or simply called the rental agency bluff on a deal that never officially existed. The only other way to go with this is that Musk attempts to trick the market by depositing some news that would momentarily boost his previous earnings in the mud.
Listen, it would be wrong to openly say that Elon Musk has figured out how to use his status and platform to manipulate the market. But I’d be an idiot not to heavily imply that this was the case after seeing how his often pointless comments affect the valuation of stocks and cryptocurrencies. Then again, maybe I found myself just entertaining ridiculous theories it seems as the richest person in the skill set on the planet includes influencing finances on a macro level.
Regardless, it’s impossible to say whether or not it happened here. Tesla’s stock price resumed an upward trajectory after falling nearly 2% on Tuesday, just after Elon Musk’s Twitter statements gained ground in the media. Assuming he was trying to move the market, this is one of his minor achievements. Hertz shares also fell slightly. But the company’s valuation is still high after last week’s announcement that it would buy 100,000 electric vehicles.
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