Elon Musk has confirmed that Tesla didn’t give Hertz a discount on its order of 100,000 electric cars.
It would be recalled that Elon Musk’s wealth recently equaled that of Bill Gates and Warren Buffet combined. But analysts said one of the reasons for that is because Gates and Buffet give billions of dollars away to charity, while Musk rarely gives that much.
It has left many thinking the wealthiest man in the world might not be as generous as his colleagues.
As was reported on Tuesday, global rental car giant Hertz announced that it placed an order of 100,000 Model 3 electric vehicles with Tesla. This reportedly shot Elon Musk’s personal wealth up by US$25 billion due to Tesla share price upsurge following the order.
The order is part of the rental car company’s effort to electrify and modernize its fleet.
A source told Bloomberg that the deal was valued at $4.2 billion, which could mean that Hertz is not getting a deep discount on the cars like it usually does.
Rental car companies have been known to get deep discounts when placing large fleet orders.
For some of them, it’s part of their business model to get discounts on large fleet orders and sell the vehicles for close to the same price they bought it after it’s been used as a rental for a while.
Now Tesla CEO Elon Musk has confirmed on Twitter that Tesla didn’t give Hertz a discount on the order:
To be clear, cars sold to Hertz have no discount. Same price as to consumers.
If the value reported by Bloomberg is accurate, it would put the average price of the Model 3 ordered by Hertz at $42,000.
The Model 3 currently starts at $44,000, but that’s after a $2,000 price increase that Tesla implemented last week.
If the rental car company placed the order last week, it could have indeed paid $42,000, the same price as customers placing new orders at that time, and only ordered Standard Range Plus Model 3 vehicles.
Meanwhile, Tesla now estimates that people placing new orders now for the Model 3 Standard Range Plus in the US would get their cars in June 2022.
Hertz said that it plans to take delivery of all 100,000 Model 3s it ordered by the end of next year.
As we reported yesterday, Tesla’s stock price surged following the news and it pushed the automaker’s valuation past $1 trillion.
In another tweet, Musk questioned the surge following the news of the Hertz order:
Strange that moved valuation, as Tesla is very much a production ramp problem, not a demand problem.
Musk has often said that he believes Tesla’s valuation was too high, even before this most recent surge.
However, he also recently said that he believes Tesla is worth $3,000 per share (3x as much as now) by 2025 “if they execute well.”