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.
Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.