Hertz has confirmed it placed an order for 100,000 Teslas, but Elon Musk claims he is unaware of any agreement.

On October 25, Hertz announced its plan to order 100,000 Tesla Model 3 cars by the end of 2022 and to enhance electric vehicle charging stations globally. However, Tesla's founder, Elon Musk, insists that no agreement has been finalized.

"I want to stress that no contract has been signed yet," Musk tweeted on November 1, shortly after the announcement. "Tesla has a far greater demand than production capacity, so we will only sell vehicles to Hertz at the same margin as consumers." Following Musk's tweet, Tesla's stock dipped by nearly 1% on Tuesday.

Compounding the uncertainty, Hertz issued a statement indicating that deliveries of Tesla vehicles have already commenced.

"As we shared last week, Hertz has placed an initial order for 100,000 Tesla electric vehicles and is investing in new EV charging infrastructure throughout its global operations. Deliveries of the Teslas have already begun, and we are experiencing strong early demand for these vehicles in our rental fleet, which reflects the market's interest in Tesla cars."

Hertz previously announced that Tesla vehicles would be accessible at airport and local locations across various U.S. and European markets starting in early November. TPG has reached out to Hertz for confirmation on vehicle availability and will update this post upon receiving a response.

In the statement released on October 25, interim CEO Mark Fields described electric vehicles as "mainstream," noting, "we're only beginning to see a surge in global demand and interest."

The statement went on to say, "The new Hertz aims to lead as a mobility company, starting with the largest EV rental fleet in North America and a commitment to expand our electric vehicle offerings while ensuring the best rental and charging experience for leisure and business customers worldwide."

If accurate, this news couldn't come at a more opportune time, as it helps Hertz cater to increasing fall and winter travel demand. The company anticipates that by the end of 2022, 20% of Hertz's global fleet will consist of electric vehicles. Furthermore, customers renting a Tesla Model 3 will have access to 3,000 charging stations across the U.S. and Europe.

The rental car crisis that travelers faced this spring, which we reported on extensively, was a result of companies struggling financially during the pandemic. These companies quickly sold off a significant portion of their fleets and canceled future orders, but as travel picked up again, rental car companies couldn't meet the revived demand.

This situation resulted in travelers arriving at airports or rental locations only to discover that their confirmed reservations had been canceled due to a shortage of vehicles. Destinations heavily dependent on tourism, such as Hawaii, experienced a 40% drop in rental car availability during the pandemic. In some instances, travelers resorted to renting U-Haul vans or trucks from home improvement stores to reach their destinations.

Like many other companies in the travel sector, Hertz faced severe challenges during the pandemic and filed for Chapter 11 bankruptcy last year, although it has since emerged from that status. The company has also implemented strategies to attract new members to its loyalty program while retaining current ones. This summer, Hertz announced that it would grant Five Star elite status to all new Hertz Gold Plus Rewards members and that existing members would earn double points on rentals until the year's end.