Everyone kevin here, so we've got a lot of drama this morning because of what elon musk just said on twitter. Regarding the heartsteal and tesla look so last week we heard that hertz was going to order 100 000 tesla vehicles. 100, 000 tesla vehicles is not just a massive amount of vehicles, potentially as much as 10 of tesla's 2021 production and a substantial portion of tesla's 2022 production, but it also marks the first time such a large order has been placed by a rental car company for An ev an electric vehicle ever it's a massive order and it's very, very, very bullish for tesla, because it reiterates that the tesla brand is one that stands for low maintenance, fuel efficiency and cost effectiveness being as cost effective as or potentially even more cost effective than A toyota camry and the toyota camry is often seen as the gold standard of cost efficacy in cars, so this is really really bullish for tesla. On top of that, hertz later came out and suggested that hey we're not limited to buying a hundred thousand vehicles.

We want to buy a hundred thousand vehicles and use well all of them in our car rental fleet. We actually want to dedicate 50 000 of them to our uber partnership, where individuals who work for uber can rent tesla model threes from us for around 300 a week and then drive uber with those which is phenomenal, because then, when you're done with it, you could Just give it back to hurts and somebody else can rent it out for the uber partnership. But beyond this the uh hurts ceo came out and suggested that they're not limited to a hundred thousand. If this goes well, they might order another hundred thousand.

On top of that - and so this has been extremely bullish for tesla, not just because of uh what what it says, the massive testament that it is for the vehicles, but the fact that it's also a big order, it's a lot of of dollars. Now we know that uh hurts based on the valuation of how much they're spending on this uh 100 000 vehicle order is not getting a discount this. This is good because, usually rental car companies require that auto automotive manufacturers provide discounts for bulk orders, and some people think that, well, if i'm going to order in bulk, i should be able to get a discount. That may be true.

If you have a product that doesn't easily sell in bulk, but if you have a product, that's high quality and at a perfect value to where there's plenty of demand for it. Otherwise supply and demand, dictates and says you do not need to lower the price. And that's exactly what's happening here with tesla tesla is not lowering the price for hurts his partnership or hurts his deal in ordering a hundred thousand vehicles and potentially another hundred thousand vehicles or more vehicles thereafter, however, the stock market. However, right now, we've got a little bit of drama over this because of what elon musk just said on twitter.

Take a look folks, so somebody tweeted yesterday super tesla stonks, thank you elon musk and they post a picture here of tesla at record highs over twelve hundred dollars. Twelve hundred thirteen dollars and elon musk says the following: you're welcome. If any of this is based on hertz i'd like to emphasize that no contract has been signed yet 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. Okay, now there are a few things to unpackage here. First, the bears are going to look at this and go oh, my gosh did did people lie about this hurts deal? Is this all fugazi uh is this? Is this all made up so executives can sell shares at high prices and uh the sec needs to investigate tesla because uh tesla's a fraud? That's what you're gon na hear from the bears now uh a logician uh, not not to be confused with magician, but somebody who uses logic is first going to break down a few things here. First, no contract has been signed yet look, even though it's easy to say that hertz can just go to tesla.com and buy the cars themselves and pay the same price as everybody else.

I get it realistically somebody's not going to sit there. It hurts and check out on a hundred thousand different vehicles if anything that would also just bog down tesla's ordering system. So i would expect that there would be some form of contract. There will also be some form of cost savings for tesla these.

This is the fact that they can bulk deliver the vehicles they don't have to one by one deliver the vehicles. They can drop them all off in the same location. They can truck them all into the same location. Uh.

There are cost savings uh with a financing. They could be bulk financed. There are a lot of different cost-saving measures that could be used when you do a bulk order, so there is going to likely be some form of modest price adjustment. However, as elon musk makes clear here, hertz will only receive the vehicles at the same margin, in other words, the same bottom line to tesla.

So it's kind of like hey look, you know, look, we don't have to deal with all the uh. You know coaching you, through this process the financing, the the deliveries easier. All these things, that's gon na save us 500 in cost per car uh. You know what we can pass that along to you, that's not providing a discount, above and beyond any kind of savings that are being created out of the scale of the transaction right, so elon musk here has not given hertz.

The middle finger is saying: we're just not going to work with you at all. Go use the website he's saying like we will work with you. We haven't signed a deal yet we're working on it, but let's be clear - and this is the more important message elon musk here is saying - we don't need hurts, we don't need to provide vehicles to hertz to have demand. We have plenty of demand.

We are not reliant on hurts and so elon musk. In my opinion, this is actually quite bullish. He's really coming across here is in in some sense, slightly cavalier. Like hey, you know this all hertz deal is cool and all i certainly hope the stock isn't running because of the hurts deal because should be running because of me.

You know, in other words like we're doing great we're. We've got plenty of now uh and we don't really need more demand. What we need is more production. Elon musk has always lamented how much how the production constraints that tesla has and how long it takes to actually scale production now uh this uh by at least according to gary black, and this is gary black's opinion he's great.

I spoke with him yesterday on the channel i'll, be posting the full interview uh on on my channel today. You can still see it yesterday, though uh one thing that's very interesting, though, is gary black says this sounds a whole lot like what elon musk said. Uh you know of gosh at this point, that'd be uh over a year ago, uh, actually more than a year ago, when elon musk says uh that the stock price feels like it's too high. This was back pre-split when the stock price price was like 750 dollars.

The darn things fell to 640 dollars and uh and people kind of lost it. Thinking that, oh, my gosh, the ceo thinks the stock prices. Do i gary black thought that this was a very similar potential tweet here which could and is likely going to affect the price of tesla at least temporarily, and we do see that tesla is down about three percent here in the pre-market? Let's do a quick little update here, yeah we're down about 3.61 percent, just off that 1200 uh. We were up about one percent in the pre-market, so we're really down about four and a half percent.

If you consider that extra percent there uh just on this hertz tweet so anyway uh my opinion, this is actually bullish. It's not that big of a deal uh and hey if the stock cools great now, there's also the potential risk that uh this tweet here ends up being something like a robin hood style catalyst or, should i say, a freezing catalyst where it cools the momentum on The stock it cools the gamma, squeezing that we've been seeing with the stock. It lets the the sort of markets uh catch up with the fact that the price has gone up and uh. It could potentially slow down the sort of insane rally that tesla has had and create another potential buying opportunity, especially if the price does rotate back to the downside.

So anyway, i'm a buyer at lower prices. I think this is great uh either way. This is no matter how you slice this. This great news, in my opinion, so uh here, are my thoughts.

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