Hertz Orders 100,000 Tesla Model 3 Vehicles; First Step Toward Electrifying Fleet

Kimberly Redmond  |

Video source: YouTube, CNBC Television

Hertz Global Holdings Inc (HTZZ) has placed an order for 100,000 Tesla Inc (TSLA) electric cars, the first step in the rental car company’s plan to electrify its fleet of a half million cars.

Starting in early November, the Florida-based company will offer Tesla Model 3 compact cars for rent at its airport and neighborhood locations in major US markets and certain European cities, Hertz announced Monday. 

According to USA Today, it is among the largest EV orders ever placed, matching the 100,000 electric vans Amazon.com (AMZN) purchased from start-up Rivian. 

In a statement Monday, Hertz’s interim chief executive officer Mark Fields said, “Electric vehicles are now mainstream, and we’ve only just begun to see rising global demand and interest. 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.”

Hertz is also investing in a company-owned charging network and plans to have 3,000 EV chargers in 65 US markets by the end of 2022 and 4,000 chargers across 100 markets by 2023. Hertz customers will also be able to use Tesla’s global network of 25,000 chargers for a fee, the company said.

News of the purchase was first reported by Bloomberg News, which estimated the deal to be worth $4.2 billion in revenue to Tesla. 

Bloomberg pointed out that the cost implies that Hertz is paying list prices for the Teslas and not getting a typical discount for its large order.

Fields told USA Today that Hertz chose Tesla because of its majority market share in EV sales, but said it is not forming an exclusive relationship with the Silicon Valley electric car company. 

"It is just the start for Hertz," he said. "We’re very much now looking to the future."

The company did not say how much Hertz will charge to rent the Teslas.

Monday’s announcement comes just a few months after Hertz emerged from bankruptcy proceedings.  

After the car rental market took a hit from pandemic-related travel curbs, Hertz filed for bankruptcy protection in May 2020. Under its reorganization plan, the company was provided about $5.9 billion of new equity capital by investors led by Knighthead Capital and Certares. 

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Source: Equities News

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