Musk went on to explain that demand for Tesla vehicles exceeds production, which means that the vehicles sold to Hertz will be traded at the same margin as to other customers. In other words, Elon does not plan to give any kind of discount for Hertz's massive order.
Moreover, Elon Musk went on to explain that the Hertz deal had a “zero effect” on Tesla's economics. Back in October, Musk commented another tweet that commented on the matter. He also underlined his opinion that it was strange that Hertz's announcement moved Tesla's valuation, as the company has a "production ramp problem" instead of a demand problem.
In other words, Tesla is now even more sought after despite Hertz's plans to buy 100,000 vehicles from the American automaker. With the entire discussion on the topic, the price of Tesla shares has rapidly increased by 33 percent after the initial announcement made by the company that specializes in renting vehicles to consumers.
After Musk's comments on the matter, the value of Tesla stock saw a small drop, which manifested itself in less than five percent of the highest price recorded after the Hertz announcement.
If Tesla does get to sign a deal with Hertz for the order of 100,000 vehicles, it could affect the company's delivery timetables for other customers. While some Twitter users speculated that Hertz might just order Tesla models one by one, it would be an unusual way to that many goods from a company.
Do not expect Hertz to buy 100,000 Tesla models on a one-by-one basis. It will be interesting to see how this plays out, though, especially since Tesla operates differently when compared to other automakers, especially when dealers are concerned.
You’re welcome!— Elon Musk (@elonmusk) November 2, 2021
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.