Herz stocks up with 100,000 Teslas
The car rental company Hertz has ordered 100,000 electric cars from Tesla. These are to be delivered by the end of 2022. Customers will be able to rent the Tesla Model 3 at selected Hertz locations in the USA and Europe from the beginning of November this year.
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The car rental company justifies the investment by saying that “consumer interest in electric vehicles (EVs) is skyrocketing”. With the 100,000 Teslas, Hertz aims to offer the “largest EV rental fleet in North America and one of the largest in the world”. It is still unclear how many of the vehicles are intended for North America and what proportion will be rented in Europe.
For the Tesla rental fleet, Hertz has also announced the installation of “thousands of charging stations” at its locations. Hertz has not gone into further detail at this point – for example, whether DC chargers will also be included or whether the charging points will be available for public use. However, the car rental company has confirmed that Model 3 rental customers will have access to Tesla Superchargers.
The 100,000 vehicles are expected to be delivered by the end of 2022, though Hertz is already citing that this ambition could be affected by factors outside the company’s control. Here, Hertz is alluding to the global semiconductor crisis and other pressures on international supply chains.
Despite such precautionary statements the company still says that the first vehicles will enter the fleet much sooner: the first Model 3s are to be offered at Hertz stations at major US airports and in selected cities in Europe as early as the beginning of November. Digitised instructions are to be provided for the Model 3s, and an accelerated booking process is also to be introduced for the electric cars via the Hertz app “in the near future”.
“Electric vehicles are now mainstream, and we’ve only just begun to see rising global demand and interest,” said Mark Fields, interim CEO of Hertz. “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.”
Fields has been interim CEO at Hertz since the beginning of the month, only sitting on the board of directors since June. Fields is best known internationally for his time as Ford CEO, running the US carmaker from 2014 to 2017. Fields, incidentally, refers to the “new Hertz” as the car rental company was forced to file for bankruptcy in the wake of the Corona crisis. The Tesla order is the first major deal after the bankruptcy was completed.
Hertz says that with the current order, electric vehicles make up more than 20 per cent of its global fleet. The major order is also very significant for Tesla. Tesla is officially targeting 750,000+ deliveries this year, with the company already at 632,521 deliveries after three quarters. This makes 850,000 deliveries seem realistic for 2021.
Hertz has not disclosed the financial scope of the deal or the exact Model 3 variant. The news agency Bloomberg reported on the order before the company’s announcement, citing a purchase volume of around 4.2 billion dollars or 3.6 billion euros. Since Tesla is not known for offering discounts, the order volume suggests that it is primarily the Model 3 SR+.
Update 26 October 2021
Shortly after the major order from Hertz came to light, Elon Musk clarified via tweet that – as suspected above – there was no volume discount. “To be clear. Cars sold to Hertz have no discount. Same price as consumers,” Musk said.
The major order, worth billions, had triggered further hype around Tesla on the stock market. As a result, the company cracked the one trillion dollar stock market value mark. Musk described the process as “strange” because Tesla does not have a demand problem, but cannot keep up with production.
Update 12 July 2022:
Tesla’s partnership with Hertz has now expanded to sixteen new US cities. Among many others, these include Boston, Las Vegas, New York City, Philadelphia, and San Diego. Other electric car companies are also making deals with the rental agency. Earlier this year, Polestar made a deal with Herz for 65,000 units of the Polestar 2. Deliveries started in June.