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Hertz Says Deliveries Of Teslas Have Started Hours After Musk Tweets There’s “No Contract” Between The Two Companies

Courtesy of ZeroHedge View original post here.

Update 0856EST: To add to the confusion of whether or not Tesla does, in fact, have a deal with Hertz for sale of 100,000 vehicles, Hertz has said that deliveries "have already started". The following headlines crossed the wire moments ago:

*HERTZ SAYS DELIVERIES OF TESLAS HAVE ALREADY STARTED

*HERTZ DOESN'T DIRECTLY ADDRESS MUSK COMMENTS ON UNSIGNED PACT

*HERTZ SEES `VERY STRONG EARLY DEMAND' FOR TESLAS IN FLEET *HERTZ DOESN'T DIRECTLY ADDRESS MUSK COMMENTS ON UNSIGNED PACT

These comments seem to stand at odds with Musk's assertion that there's no contract in place yet. We will update the story as new details become available. 

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Tesla shares are down about 5% in pre-market trading after Elon Musk Tweeted late Monday night that the company's deal with Hertz – widely seen as the catalyst (other than call options) for moving the stock higher over the last week – still hadn't been formalized in a contract.

Once again, it looks to be a case of Elon Musk's Tweets disclosing "relatively material" information (especially given Tesla's stock price move over the last week which gained almost half a trillion dollar in 3 weeks!) that the market otherwise wouldn't have had access to.

Days after the company tacked on hundreds of billions of dollars in "value" following the announcement that Hertz would buy 100,000 Teslas, Musk nonchalantly tweeted in response to a chart of his company's stock: “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,” Musk wrote.

Recall, it has now been about 7 days since Tesla rocketed to new highs on the back of the Hertz announcement. 

Bloomberg reported at the time that the order marked the "single-largest purchase ever for electric vehicles" and will equate to about $4.2 billion in revenue for Tesla. 

It was also reported that the order would be delivered over the next 14 months and Model 3 vehicles would be available to rent at most Hertz locations starting in November. 

Hertz was said to be building its own charging infrastructure, in addition to allowing customers to have access to Tesla's Supercharger network. 

And Wedbush's Dan Ives was out with the pom-poms the day after the Hertz report, writing on October 26: “The Hertz deal we believe will be viewed as a tipping point for the EV industry as this 100k Model 3′s/$4 billion+ deal for Tesla speaks to more mainstream adoption for EVs as today only 2% of autos in the US are EV driven compared to 10%+ in China with rapid growth on the horizon. We believe this is the biggest transformation to the auto industry since the 1950′s with more consumers heading down the EV path over the coming years.”

We wonder if he knew there was no contract signed at the time. But we digress…

Adding to Tesla's misery on Tuesday, it was also announced that the company would be recalling over 11,000 vehicles sold since 2017 due to a communication error that "may cause a false forward-collision warning", according to Reuters.

The recall was "prompted after a software update on Oct. 23 to vehicles in its limited early access Full-Self Driving (Beta) population," the report says.

It marks the second such recall brought to the attention of the National Highway Traffic Safety Administration over the last week. The company also recalled almost 2,800 vehicles for suspension that could increase the risk of crash, we reported on October 29. 

And so, Tesla slumps pre-market. That is, in all likelihood, at least until the options market opens. 


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