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Tesla squanders some of $300 billion gain on Musk’s Hertz tweet

Tesla shares sunk in early trading on Tuesday after founder Elon Musk cast doubt on a deal to supply Hertz with rental cars.

The Hertz announcement last week of an agreement for Tesla to supply the car rental firm with 100,000 of its electric autos helped push Musk’s company to a $1 trillion market valuation alongside tech titans like Amazon, Microsoft, Google and Apple.

But Musk on Monday said no agreement had been finalized.

“If any of this is based on Hertz, I’d like to emphasize that no contract has been signed yet,” Musk tweeted in response to a chart showing Tesla’s share price ascending.

“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.”

Meanwhile, Hertz said it’s already receiving cars under its plan to add 100,000 Tesla electric vehicles through 2022, without responding directly to a market-moving tweet from billionaire Elon Musk that said there’s been no signed contract between the companies yet.

The rental-car company unveiled its EV initiative last week, a deal with potential to change the industry and speed consumers’ adoption of EVs. Shares of Tesla Inc. fell in early trading Tuesday after Musk, its chief executive officer, tweeted there was no contract yet and reiterated that Hertz wouldn’t get any special pricing.

“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,” Hertz said in an emailed statement Tuesday. “Deliveries of the Teslas already have started. We are seeing very strong early demand for Teslas in our rental fleet, which reflects market demand for Tesla vehicles.”

Tesla shares were trading 2.3% lower just after the open on Wall Street.

Separately, the US National highway Traffic Safety Administration on Tuesday announced the recall of nearly 12,000 Tesla cars due to errors with their communication software.

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