Musk says Tesla hasn’t signed a contract with Hertz, halts stock rally

Tesla Inc top boss Elon Musk said the electric carmaker had not signed a contract with Hertz, more than a week after the car rental firm announced a massive deal with the electric car company.

Tesla’s shares fell 5% to $1,146 (about R17,698) in premarket trading, after a steep jump following the news of the biggest-ever order — 100,000 electric cars for Hertz — on October 25, which helped Tesla breach $1-trillion (roughly R15,421,030,000,000) in market capitalisation.

Musk tweeted late on Monday: "If any of this is based on Hertz, I'd like to emphasise that no contract has been signed yet."

"Hertz deal has zero effect on our economics."

Tesla and Hertz did not immediately respond to a request for comment.

Interim Hertz CEO Mark Fields told Reuters last week the order will primarily include Model 3 vehicles. Considering Tesla's cheapest Model 3 sedan starts at about $44,000 (about R679,000), the order could be worth about $4.4bn (about R67.9bn) if the entire order were for the mass-market sedan.

"Tesla has far more demand than production, therefore we will only sell cars to Hertz for the same margin as to consumers," Musk said.