If you regularly rent a car from Hertz, you will soon be offered an electric vehicle in the US and Europe. This is because the car rental giant has placed an astounding order for 100,000 electric cars from Tesla!
The order, which is reportedly made up of Model 3 units, will start delivering soon because drivers will rent them beginning from November this year. Tesla will supply all the cars within 14 months, despite the global chip shortage affecting the automobile industry.
Hertz’s order is worth $4.2 billion and will represent a good percentage of Tesla’s annual output. This is a great move for Hertz, who might have blocked out other car rental companies looking to strike such a deal.
For Tesla, it means a massive chunk of money. The deal’s effect has also been seen on its share price, which soared to above $1000, giving the company a valuation of more than $1 trillion, which only a handful of companies can boast of.
Despite the number of cars involved, Hertz is reportedly paying close to the regular price for the trim it selected, meaning there was no discount. Interestingly, Hertz is not flooding its business with the base trim but instead has gone for a trim with more features.
The car rental company is on the path to electrifying its more than 500,000 rental cars and has emerged as the biggest company to embark on switching to electric.
Apart from deploying electric rental cars, Hertz will install its own public chargers, but its clients will still have access to Tesla’s global network of Superchargers.
This is the second time an electric vehicle will receive an order of 100,000 vehicles. The first time was when Amazon agreed to purchase 100,000 electric vans from Rivian in 2019, with the startup yet to put a single EV on the road.
Hertz has had an eventful few years recently. It went bankrupt last year due to the pandemic but was quickly rescued by a debt management company. Fast-forward to a year after, and it is signing up to purchase 100,000 electric vehicles!
Here is Hertz’s press release in part:
“Electric vehicles are now mainstream, and we’ve only just begun to see rising global demand and interest,” said Hertz interim CEO Mark Fields. “The new Hertz is going to lead the way as a mobility company, starting with the largest EV rental fleet in North America and a commitment to grow our EV fleet and provide the best rental and recharging experience for leisure and business customers around the world.
Today, 40% of US consumers say they are likely to consider an electric vehicle the next time they are in the market for a new vehicle, according to Pew. Global EV sales skyrocketed 200% in the last year and will likely continue to grow with commitments from global automakers to increase EV sales. For example, in August, three US automakers pledged to boost EV sales to 40-50% by 2030.
The growth is powered by electric vehicles’ high efficiency, positive user experience, and climate change benefits – coupled with battery breakthroughs and rapidly expanding charging networks. EV drivers also benefit from lower maintenance and fuel costs.
Beginning in early November and expanding through year end, customers will be able to rent a Tesla Model 3 at Hertz airport and neighborhood locations in US major markets and select cities in Europe. To learn more, visit hertz.com/ev.
Hertz also is installing thousands of chargers throughout its location network. Customers who rent a Tesla Model 3 will have access to 3,000 Tesla supercharging stations throughout the US and Europe.
Hertz will offer a premium and differentiated rental experience for the Tesla EVs. This includes digitized guidance to educate customers about the electric vehicle to get them on their way quickly, and coming soon, an expedited EV rental booking process through the Hertz mobile app.
With the current order, EVs will comprise more than 20% of Hertz global fleet and is expected to be supported by a combination of Level 2 and DC fast charging in approximately 65 markets by the end of 2022 and more than 100 markets by the end of 2023. Hertz said these ambitions could be affected by factors outside of Hertz’s control, such as semiconductor chip shortages or other constraints.”