When Hertz goes electric, it goes electric. The EV space has hardly recovered from the shock of the purchase of 100,000 Tesla EVs, but the car rental company is procuring another 65,000 EVs, this time from Polestar.
Polestar, the brand formed by Volvo and its parent company, Chinese Geely, has secured a large order of EVs from Hertz. The order includes 65,000 Polestar battery-electric vehicles. All the cars will be delivered over five years. Renters can start driving the Polestar in North America from the spring of 2022, while Australians will have access to them in late 2022.
Neither company divulged the financial details of the deal, but the Polestar 2 starts at $49,000, meaning the contract may be worth more than $3 billion. Hertz is reportedly paying the full price for the Tesla cars, so it is safe to say Polestar can get away with offering no discount as there is no shortage of buyers for the EVs.
Hertz had about half a million vehicles in its fleet worldwide as of last year. The company was rescued from bankruptcy thanks to the pandemic affecting its business model. It became saddled with a high amount of debt but got a second chance after an investment of almost $6 billion led by Knighthead Capital Management and Certares Management.
After putting bankruptcy behind, Hertz embarked on electrifying most of its cars and vehicles. With the two orders from Tesla and Polestar amounting to 160,000, the car rental company has made significant progress.
Polestar has grown in stature in the automobile industry after its formation. It has become one of the most prominent EV brands after starting out as a performance brand.
The company wants to go public through a special purpose acquisition company (SPAC), like Rivian and Lucid Motors did last year.
It is not surprising that Hertz is attracted to Polestar, which has positioned itself as a rival to Tesla by offering premium vehicles with sleek well-thought-out designs. It also places an emphasis on sustainable materials.
Polestar currently has two models with one of the most simple naming schemes; the Polestar 1, a hybrid coupe, and Polestar 2. Both models will be joined by the Polestar 3 SUV in 2022, and Polestar 4 compact SUV in 2023. The Polestar 5 sports sedan will come in 2024.
Polestar has revealed a roadster concept car named the Polestar O2.
When Hertz announced the massive contract with Tesla, the EV company stocks soared, pushing the market cap to above $1 trillion, the first for an automobile company. This deal may not have a similar effect on Polestar, as its shares have not started trading yet.
The only other larger car order is Amazon’s contract with Rivian to build 100,000 electric delivery vans for the online shopping giant. However, Amazon is a significant investor in Rivian.