Chip Shortages Drive Vehicle Prices Higher

Tesla’s Recall and its Deal with Hertz Raise Questions Among Investors

Tesla Recalls 11,704 Vehicles

EV superpower Tesla (TSLA) has been making headlines for several reasons recently. For one thing, Tesla is recalling 11,704 vehicles which were sold in the US since 2017. The products being recalled include Model S, X, 3, and Y vehicles.

The National Highway Traffic Safety Administration says the vehicles in question may have problems with their communication systems. These issues could cause the cars to put on their emergency breaks unexpectedly or to activate a false collision warning. Tesla has said it is not aware of any accidents caused by the communication issues.

Tesla Hits a $1 Trillion Market Cap

The recall is not the only reason why Tesla has been in the spotlight recently. The company generated buzz in late October after car rental company Hertz (HTZZ) announced that it planned to ramp up its EV offerings with an order of 100,000 cars from Tesla. Hertz has launched a commercial featuring Tom Brady to let consumers know about its plans for the deal with Tesla.

Many investors view the deal as a sign that EVs are becoming more mainstream. This resulted in Tesla hitting a $1 trillion market cap. Elon Musk, who owns about 20% of Tesla, became the world’s richest person due to the jump.

Tesla’s Deal With Hertz Is Called Into Question

As Tesla’s stock price rallied thanks to enthusiasm about the deal with Hertz, CEO Elon Musk tweeted a message which called the deal into question. Referring to Tesla’s rally he said, “If any of this is based on Hertz, I’d like to emphasize that no contract has been signed yet.” This seemingly contradicts an announcement from Hertz at the end of last month.

Investors are now left with a number of unanswered questions about the future of the Hertz-Tesla deal as well as the recall of Tesla cars.

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ABOUT Meg Richardson Meg Richardson is a writer specializing in markets, technology, and personal finance. She loves breaking down seemingly complex ideas and making them readable and interesting for everyone. She holds an MFA in writing from Columbia University. When she is not writing about finance, she enjoys running in Central Park and drawing cartoons.

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