Elon Musk denies Hertz contact signed, despite announcement sending valuation rocketing

Elon Musk and the Hertz logo
Despite the denial, the car rental company has said vehicles are already being delivered. Photo credit: Getty Images

Tesla CEO Elon Musk says no deal has been signed with Hertz despite an announcement from the car rental company which sent shares in the electric vehicle manufacturer skyrocketing.

Last week Hertz publicly committed to ordering 100,000 Tesla vehicles before the end of 2022, which sent the market value of Tesla above US$1 trillion.

"Electric vehicles are now mainstream, and we've only just begun to see rising global demand and interest," Hertz interim Chief Executive Officer Mark Fields told Reuters at the time.

But a tweet from a Tesla shareholder thanking Musk for the increase in value of the shares drew a surprising response.

"You're welcome! If any of this is based on Hertz, I'd like to emphasise that no contract has been signed yet," Musk wrote.

"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."

Even stranger is the fact Hertz told the BBC that deliveries of the Teslas they'd ordered "had already started".

A spokesperson told the corporation: "As we announced last week, Hertz has made an initial order of 100,000 Tesla electric vehicles and is investing in new EV charging infrastructure across the company's global operations."

But the company wasn't willing to confirm whether a contract had actually been signed, telling LA Times reporter Russ Mitchell: "We don't discuss the details of our business relationships or discussions with any automaker or partner."

Musk's tweet drew further questions from Mitchell, who writes regularly on the billionaire.

"Did you know Hertz planned to issue a press release that day? Did you sign off on it?," he wrote.

"If there was no contract signed, why wait until this tweet (and after huge stock price rise) to make that clear?"

Musk's tweet caused a drop in value, with shares down four percent at one point. They've recovered slightly since and are now trading three percent down.

He has previously been fined US$20 million and forced to resign his role as chairman of Tesla after tweeting in August 2018 he was considering taking the company private.

The Securities and Exchange Commission (SEC) had sued Musk, saying his claims about funding were "false and misleading", before agreeing to the deal, which also cost the company a US$20 million fine.

As part of that agreement, he also agreed to have public statements about Tesla overseen by the company's lawyers.

Since then the SEC has written to Tesla at least twice indicating Musk's tweets hadn't been approved.

The share price spike after the Hertz deal was announced also saw directors cashing in on stock.

Board member Ira Ehrenpreis exercised options to buy 370,000 shares at US$50 each, before selling US$200 million of them after the stock crossed over the US$1000 mark.

Antonio Gracias, a board member whose term has just expired, also filed to sell US$610 million of shares on the same day.