Hertz orders 100,000 Teslas, the single-largest EV purchase ever

Entertainment

Hertz Global Holdings Inc has placed an order for a whopping 100,000 Teslas in a huge first step toward electrifying its rental-car fleet, according to Bloomberg News.

Bloomberg‘s sources, who asked not to be identified, said that’s around $4.2 billion of revenue for Tesla. It will be the single-largest purchase ever for electric vehicles. The cars will be delivered over the next 14 months.

Bloomberg points out that the cost of the order implies that Hertz is paying list prices for the Teslas, and is thus not getting a discount for its large order, which car-rental companies usually get from automakers.

Tesla Model 3s will be available to rent at Hertz locations in major US markets and parts of Europe starting in early November, according to the source. Customers will of course have access to Superchargers, and Hertz is also building its own charging infrastructure.

Bloomberg writes:

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.

Teslas have been incredibly popular on San Francisco-based peer-to-peer car-sharing company Turo, with some people earning a living with a small Tesla fleet.

In response to the news, TSLA stock is up 5% in premarket.

Hertz filed for bankruptcy in May 2020 as a result of the pandemic travel slump. Demand for rental cars then swung sharply upward, partly due to the result of a car shortage, driven by high demand for used cars and supply chain disruptions, as well as a rebound in travel.

In a quick turnaround due to high demand for rental cars, Hertz officially emerged from bankruptcy on June 30, which allowed it to shed more than $5 billion in debt.

Read more: Tesla Model S vehicles now available at Hertz Rental Car at San Francisco SFO and Los Angeles LAX Airports


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