Tesla stock falls after Elon Musk tweets that a deal with Hertz is not signed

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A Tesla electric vehicle sits in a charging station at a dealership on Feb. 18, 2021, in Dedham, Mass. Shares of Tesla tumbled around 4% in premarket trading on Nov. 2 after its CEO and founder Elon Musk tweeted that a deal to sell 100,000 cars to Hertz had not been signed, suggesting it was not final.

Steven Senne/AP

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Steven Senne/AP

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Tesla’s market value hits $1 trillion after Hertz agrees to buy 100,000 of its cars

News of the deal last week triggered a rally in Tesla’s stock, driving the world’s most valuable automaker’s market value over the $1 trillion mark for the first time. Before Tuesday’s dip, shares had risen about 33% in the week since the deal was announced.

Musk suggested in the same tweet reply on Monday night that Hertz would not be getting a discount and that the deal was inconsequential to his company’s bottom line.

«Tesla has far more demand than production, therefore we will only sell cars to Hertz for the same margin as to consumers,» Musk’s tweet continued. «Hertz deal has zero effect on our economics.»

Hertz says Teslas are arriving and should be available to rent in November

In an interview with The Associated Press last week, Mark Fields, Hertz’ interim CEO, said that Teslas were already arriving at the company’s sites and should be available to rent sometime this month.

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It’s not entirely clear why Musk would complicate or potentially sabotage the Hertz deal, but public comments like his tend to be about gaining leverage in negotiations.

Bill Selesky, a senior analyst with Argus Research, suggests Musk understands his brand’s value as a leader in electric vehicles and is trying to wring as much as he can out of Hertz.

«Hertz, if they do a deal with Tesla, will instantly be recognized as part of the EV revolution, not the problem,» Selesky said.

Shares of Tesla fell 3.6% in midday trading Tuesday, to $1,164 per share.