Tesla Inc. TSLA 1.32% and Hertz Global Holdings Inc. HTZZ 2.58% are negotiating over how quickly Hertz will receive deliveries from a bulk order of 100,000 Tesla electric cars for its rental fleet, according to people familiar with the matter.
Hertz on Oct. 25 said it had placed “an initial order of 100,000 Teslas by the end of 2022.” The press release included no statement from Tesla and Tesla Chief Executive Elon Musk on Monday raised doubt about the deal when he tweeted that no contract had been signed yet.
Some Tesla officials were surprised by how quickly Hertz said the order would be filled and had been expecting to deliver roughly 10,000 vehicles a year to Hertz, one of the people said. Another one of the people said the press release was shared with Tesla representatives. Wall Street expects Tesla to deliver nearly 900,000 vehicles globally this year.
“As we announced last week, Hertz has made an initial order of 100,000 Tesla electric vehicles and is investing in new EV charging infrastructure across the company’s global operations,” Hertz said, repeating a statement issued Tuesday. “Deliveries of the Teslas already have started.”
Hertz said Tuesday that it stood by its prior pronouncements. Hertz customers already have the option to rent a Tesla Model 3.
Rental fleet buys often continue to be negotiated by the auto maker and rental car company after an initial order is placed. Once the rental car company’s order is locked into the auto maker’s production schedule, a contract is typically signed, analysts and industry executives say.
In Hertz’s announcement last week, the company warned that the initial order from Tesla “could be affected by factors outside of Hertz’s control, such as semiconductor chip shortages and other constraints.”
Shortly after Hertz exited from bankruptcy in June, representatives of Hertz’s new owners began negotiating with Tesla in an effort to reach a deal, according to other people familiar with the matter.
The two sides haggled for months over the number of vehicles that Tesla would supply to Hertz, these people said. Hertz is also considering purchasing electric vehicles from other manufacturers as well, they said.
Mr. Musk wasn’t deeply involved in those Hertz negotiations, a person familiar with the situation said.
When the bulk order was announced by Hertz, shares of both stocks jumped on the news amid investor optimism that the rental-car company would get more Teslas out on the road. Football star Tom Brady was tapped to promote the pact for Hertz. With the stocks’ gains, Tesla became a $1 trillion company and Mr. Musk’s wealth surpassed $300 billion. On Wednesday, Hertz said some of its investors had filed to sell some of their shares.
Financial terms of the deal between Hertz and Tesla weren’t provided during last week’s announcement by Hertz. Based on list prices of the Model 3, the cost to Hertz would top $4 billion.
After Hertz’s announcement, some at Tesla became concerned that the deal would send a signal the electric-vehicle maker was increasing its manufacturing capacity or dedicating a big percentage of its annual car supply to Hertz, the person familiar with the situation said.
Tesla customers can face lengthy waits for vehicles. As of Wednesday, Tesla was estimating that new orders for its entry-level Model 3 wouldn’t be available for delivery in the U.S. until June.
“Tesla has far more demand than production, therefore we will only sell cars to Hertz for the same margin as to consumers. Hertz deal has zero effect on our economics,” Mr. Musk said in Monday’s tweet.
Mr. Musk’s actions on social media have been scrutinized in recent years. A 2018 Securities and Exchange Commission investigation alleged that Mr. Musk misled investors by tweeting about a potential buyout of Tesla when he posted “funding secured” on Twitter. Mr. Musk and Tesla each paid $20 million to settle that case. Mr. Musk agreed to have his statements overseen by Tesla lawyers.
—Alexander Gladstone contributed to this article.