Hertz to buy 100,000 Teslas in largest single electric vehicle purchase
Hertz to buy 100,000 Teslas in largest single electric vehicle purchase

By Zachary Halaschak, Economics Reporter

Rental car giant Hertz said it will soon offer the largest rental fleet of electric vehicles in the United States after agreeing to purchase 100,000 cars from Tesla.

The company announced the purchase on Monday and said that all the vehicles would be delivered by the end of next year. It also announced new electric vehicle charging infrastructure investments across Hertz’s global operations.

“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.”

The single purchase amounts to about $4.2 billion in added revenue for Tesla, according to Bloomberg, citing sources with knowledge of the deal. The behemoth purchase appears to indicate that Hertz, fresh out of bankruptcy, paid near list prices for the fleet, despite bulk orders from rental car companies usually including major markdowns.

Tesla Model 3 sedans, the newest models of which start at about $40,000, will be available for Hertz customers to rent in U.S. and European markets beginning in November.

Hertz’s stock jumped by about 14% on Monday morning upon news of the deal, and Tesla’s stock bounded upward by more than 6%.

The rental car company cited Tesla’s positive user experience, the electric vehicle’s high efficiency, and climate change as driving factors behind the purchase. After the full order of 100,000 vehicles is rolled out, electric cars will make up more than 20% of Hertz’s global fleet, the company said.

Hertz also enlisted the help of NFL quarterback Tom Brady, a seven-time Super Bowl champion, to help raise awareness about its electric fleet. The company released two ads featuring the Tampa Bay Buccaneers star.

“Hertz is changing the game when it comes to the future of mobility and has come through for me time and time again,” Brady, who drives an electric vehicle himself, said in a statement. “Although the company has been around for over 100 years, their constant evolution, especially now, is something that is amazing to be a part of.”

The purchase comes amid a supply chain crunch that has affected the entire rental industry. Rental car prices have surged as new vehicle production has been blunted by shortages caused by a lack of computer chips, as well as the pandemic, which initially forced rental companies to sell off excess vehicles.

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