Ever witness two people arguing and you know full-well they’re both right? It’s kind of sad, especially if you can’t convince them there’s no winner, they’re both correct from their own perspective, and it’s time to agree to disagree on the specifics.
It seems this is likely what happened with the recent Tesla / Hertz deal. Hertz almost certainly ordered 100,000 cars from Tesla, and it may already be ordering more to get ahead of the growing queue. Upon checking Tesla’s website, the rental car company saw that Model 3 orders placed today (or whenever the orders were placed) are estimated to be delivered before the end of 2022, though no other normal customer is ordering 100,000 cars at a time. Keep in mind, we have no idea how Hertz placed its order.
Tesla CEO Elon Musk made it clear later on Twitter that Hertz doesn’t get a special price or a deal. Rather, they have to order cars at full price like any regular customer. Apparently, that wasn’t clear enough for some people, so Musk chimed in again and said there was no contract between Tesla and Hertz, though he did add “yet.”
With everything Musk has said about huge demand and production constraints, Tesla would be crazy to sign a contract to sell 100,000 or more Model 3 sedans to a rental company when it can’t even fill orders for individuals.
That said, Hertz is right. It did order 100,000 cars (as far as we know, unless it’s lying out loud). Musk is right. No contract was signed, Hertz doesn’t get special treatment, peoples’ Model 3 orders won’t be pushed behind another 100,000 cars.
Now, the media is saying Tesla and Hertz are in a disagreement about the timeline for the order. Since there’s no contract, Tesla doesn’t have to meet any deadline for delivering the cars. Hertz assumes the cars should arrive by the end of 2022, since it ordered as a regular customer, and the estimated delivery timeline is shown on Tesla’s website. However, it’s an estimate for a reason, and it changes all the time. Ask anyone who’s ordered a Tesla in the past.
Hertz also said Tesla has already started delivering the cars. If Hertz ordered 100,000 cars, there’s no reason Tesla can’t begin delivering some here and there, just as it’s delivering some individual folks’ orders while others are still waiting. Hertz told The Wall Street Journal:
“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. Deliveries of the Teslas already have started.”
The publication also said sources familiar with the matter mentioned that Tesla and Hertz are “hammering out the details of a deal” related to the timing of deliveries. Does this mean an actual contract is coming? It’s hard to say, but we need to move on here. There’s really nothing to see. Both sides are right based on their own perspectives.
Hertz will have Tesla vehicles for rent, some beginning now, and many more later. This appears to be an ongoing situation, where Hertz will order more Teslas over time, just as it does with gas-powered cars. Everyone who orders a Tesla, and pays for it, gets a Tesla. It’s just a matter of how long they have to wait. If more concrete information becomes available, we’ll provide a new story.
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