Why Elon Musk Can’t Wrap His Head Around Tesla Stock’s Surge

By Benzinga
November 3, 2021 Updated: November 3, 2021

Tesla Inc shares soared on Monday and CEO Elon Musk expressed surprise that the news around car rental company Hertz Global Holdings is driving the surge.

What Happened

Tesla shares jumped last week after the news that the maker of Model 3 and Model S electric vehicles has landed its biggest ever order from a rental car company, helping Tesla hit the $1 trillion market cap for the first time.

Musk tweeted, saying he would like to “emphasize that no contract has been signed yet” between Tesla and Hertz after the latest sharp rise in shares of the electric vehicle company.

“Hertz deal has zero effect on our economics,” the Tesla CEO said.

Musk reiterated his stand that Tesla does not have a demand problem but it faces a production ramp issue. He had last week similarly said he found it strange that the news of the order moved up the valuation.

Why It Matter

Hertz made two announcements last week.

The car rental company said it would grow its fleet of battery-electric vehicles with “an initial order of 100,000 Teslas by the end of 2022.” Two days later, Hertz announced a partnership with Uber Technologies network to make up to 50,000 Teslas available by 2023 for drivers to rent.

Price Action

Tesla shares closed 8.49 percent higher at $1,208.59 on Monday. The stock has risen about 32.8% since Oct. 22.

By Rachit Vats

© 2021 The Epoch Times. The Epoch Times does not provide investment advice. All rights reserved.