Hertz Orders 100,000 Teslas, moves towards electrifying its fleet!

Hertz Global Holdings Inc. said it has ordered 100,000 Tesla vehicles by the end of 2022, a move aimed at including more electric vehicles in its car-rental fleet.

Hertz customers will be able to rent a Tesla Model 3 at airports and other sites in key U.S. markets and certain European cities beginning in early November and continuing until the end of the year, according to the Estero, Fla.-based firm.

With the latest purchase, electric vehicles will make up more than 20% of Hertz’s global fleet, the firm announced Monday. Electric cars were integrated into the rental car firm’s fleet in 2011, according to the corporation.

Hertz also announced it is adding thousands of electric vehicle charging stations to its network. Tesla Model 3 renters will have access to 3,000 Tesla supercharging stations across the United States and Europe, according to the firm.

By the end of 2022, Hertz intends to have a mix of level 2 and DC fast charging in around 65 markets and more than 100 markets by the end of 2023.

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

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Here’s more info to deep dive!

The finances weren’t announced though it’s speculated that such bulk orders come with some discounts.

After recovering from insolvency under new management, Hertz is making the investment. It filed bankruptcy in May 2020, due to a decline in reservations at the debt-ridden corporation.

According to the firm, the move into electric vehicles is part of “the new Hertz,” which focuses on electrification, shared mobility, and a digital-first experience. The new owners of Hertz want to modernize the century-old firm by introducing new software to better manage inventories and estimate consumer demand.

Hertz cautioned that variables outside its control, such as a scarcity of semiconductor chips and other restraints, might stymie its attempts to electrify its fleet.

The firm announced that it had teamed up with Super Bowl winner Tom Brady on a marketing campaign for electric car rentals.

Hertz’s revenue has recovered in the last year as travel restrictions have been relaxed and more Americans have received Covid-19 immunizations. At the same time, Hertz and other rental car firms have struggled to keep up with the rise in bookings, citing a dearth of vehicles to serve clients as the auto industry faces a supply deficit. Due to the shortage, rental car costs have risen, and renters have fewer alternatives.

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Tesla Inc. crossed $1 trillion in market value Monday, joining Apple, Microsoft and Alphabet amongst the US companies.

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He added, of the Hertz order: “Strange that moved valuation, as Tesla is very much a production ramp problem, not a demand problem.”

Tesla, last week reported a record quarterly profit, is worth more than the next nine largest auto makers by market capitalization combined.

Elon Musk did mention that no discount was provided and Hertz are paying the same price as other customers -

And as @ZakifromVested pointed Tesla doesn’t have a demand problem. They are supply constrained due to the huge demand from consumers for EV specifically a Tesla vehicle and have huge waiting lists. This should relax in 2022-23 as Tesla starts production and starts ramping up Giga Berlin and Giga Texas in parallel.

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Update: Musk said no contract has been signed yet and there’s more demand than production. He also added the fact that there is zero effect on Tesla’s economics on the order.

However, shareholders and analysts responded favourably to the idea of Tesla selling 100,000 fully electric vehicles to Hertz. The move was seen as a sign that battery-electric cars were going more mainstream.

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