After Musk's Denial, What's Really Cooking Between Tesla And Hertz?

Hertz Global Holdings, Inc.'s HTZZ announcement in late October that it ordered 100,000 EVs from Tesla, Inc. TSLA was the main catalyst that helped the EV maker's stock eclipse the $1-trillion market cap mark.

Tesla, Hertz Negotiate: Tesla and Hertz are in talks over how quickly the car rental company can take possession of the bulk order, the Wall Street Journal reported Thursday, citing people familiar with the matter.

The two companies are working on the details of the deal, which will clarify the timing of deliveries, the report said. Tesla will supply Hertz with the vehicles at list price, with delivery times being a key issue, the WSJ reported. 

Hertz Unilaterally Announces Tesla Deal: Reports of negotiations between the two parties come after Hertz announced on Oct. 25 it plans to invest in an EV rental fleet in North America, with the investment to be spent on an initial order of 10,000 Teslas by the end of 2022 and new EV charging infrastructure.

Related Link: Why Tesla's Hertz Deal Is a 'Feather In Its Cap' And An Indicator Of Broader EV Adoption

Although Tesla shares gained on the announcement, it was quite surprising that the press release did not contain a statement from Tesla or its CEO Elon Musk.

A couple of days later, Hertz put out another release, wherein it said it is partnering with Uber Technologies, Inc. UBER to make up to 50,000 Teslas available by 2023 for drivers to rent when using the Uber network.

Musk Dampens Hertz Deal Optimism: Musk on Monday said in response to one of his Twitter follower's tweets regarding Tesla's stock price surge that no contract has been signed with Hertz yet.

The Tesla chief went on to say Tesla has far more demand than production and therefore will sell cars to Hertz at the same margin as to customers.

Some Tesla officials were surprised at how soon Hertz said the order will be filled, the WSJ report said Thursday, citing a source. However, another official reportedly said the Hertz press release was shared with Tesla.

If the Wall Street Journal report proves correct, the deal is still on, and the only issue is with respect to the timing of the delivery of the EVs. This assumes all the more importance against the current backdrop of semiconductor shortage and supply chain constraints.

Tesla shares gained 1.32% Thursday, closing at $1,229.91. Hertz shares were up 2.58% at $32.62. 

Related Link: Tesla Analysts Say Texas Shift 'Strategic Move,' Capacity Expansion Plans Increasingly Ambitious After Shareholder Meeting