Tesla (TSLA) shares were down as much as 5.2% on Tuesday after CEO Elon Musk tweeted that no contract for a deal with Hertz Global (HTZZ) had been signed yet after the car rental company revealed that it had ordered 100,000 Tesla vehicles.
Tesla shares still down 1.8% as of 10:51 a.m. on Tuesday, while Hertz shares were up over 11%.
Tesla's market cap shot up above $1 trillion for the first time ever last week after Hertz Global announced it had ordered the vehicles.
Replying to a recent tweet about the stock's parabolic move, Musk wrote: "If any of this is based on Hertz, I’d like to emphasize that no contract has been signed yet."
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
On Tuesday morning, Hertz issued a statement saying the Tesla order was made, and deliveries are already underway.
"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," the statement said.
"Deliveries of the Teslas already have started, and consumer reaction to our commitment to lead in electrification has been beyond our expectations."
The deal between the two companies is seen as a "major win-win" by Nicholas Colas, co-founder of DataTrek Research.
The arrangement is a "fascinating case study in how new and old industries still need each other to maximize the impact of disruptive technologies on the one hand and leverage that same technology to remake a stale business model on the other," Colas wrote in a recent note to investors.
Hertz Global Holdings came out of bankruptcy over the summer after entering Chapter 11 in May 2020 close to the onset of the COVID-19 pandemic.
This article was revised at 12:09 PM Eastern to include an updated statement from Hertz.
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