In a significant first step toward electrifying its rental-car fleet and mainstreaming electric vehicles, Hertz Global Holdings Inc. has placed an order for 100,000 Teslas.
Tesla’s $3.5 billion acquisition of SolarCity, according to unnamed sources cited by Bloomberg, is worth about $4.2 billion in revenue based on reports prior to the company’s official announcement. It will be the single largest purchase ever for electric vehicles. From an already cramped supply of Tesla automobiles, the vehicles will be delivered over the next 14 months.
Hertz’ cost of the order indicates that it is paying list prices for the Teslas, implying that it isn’t obtaining a discount for its large purchase from automakers, as car-rental firms frequently do.
According to a source, Tesla Model 3s will be available to rent at Hertz locations in major US cities and certain areas of Europe starting November 4. Customers will have access to Superchargers as well as Hertz’s own charging stations, which it is currently building.
The electrification plan, which eventually will encompass almost all of Hertz’s half-million cars and trucks worldwide, is the company’s first big initiative since emerging from bankruptcy in June. And it signals that Hertz’s new owners, Knighthead Capital Management and Certares Management, are intent on shaking up an industry dominated by a handful of large players who are typically slow to change.
Turo, a San Francisco-based peer-to-peer car-sharing service, has been very popular among Tesla owners. Some individuals have made a good living with a modest Tesla collection.
Tesla stock has risen 8% in premarket in response to the announcement and a Morgan Stanley upgrade.
As a result of the pandemic travel slump, Hertz filed for bankruptcy in May 2020. Renting automobiles became increasingly popular, owing to the effects of a car scarcity caused by high demand for used vehicles and supply chain disruptions, as well as a resurgence in traveling.
On June 30, after a fast rise in demand for rental cars, Hertz officially emerged from bankruptcy, allowing it to offload more than $5 billion in debt.
An update from the press release:
In addition, Hertz is teaming up with seven-time Super Bowl champion and entrepreneur Tom Brady to showcase how it is making EV rentals fast, seamless and more accessible, as the company accelerates its commitment to lead the future of mobility and travel.
“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.