Hertz Global Holdings, Inc. (HTZZ) announced two major deals increasing its investment in the electric vehicle (EV) market. The car rental company is partnering with Tesla, Inc. (TSLA) and Uber Technologies, Inc. (UBER) to expand its reach with EVs.
Elon Musk tweeted late on Monday, Nov. 1, 2021, that the deal between Tesla and Hertz for 100,000 cars hadn't yet been signed. He also said that cars would be sold to Hertz at the "same margin as consumers."
Hertz has committed to an initial order of 100,000 Tesla vehicles by the end of 2022. EVs will eventually make up about 20% of the company's global fleet. Hertz will also work to improve charging station infrastructure across its network.
- Hertz is looking to electrify the car rental business, expanding its network of EVs and charging stations.
- The car rental company has committed to an initial order of 100,000 Tesla cars by the end of 2022.
- Hertz is also partnering with Uber to make more electric vehicles available for rent.
Tesla shares rose by more than 12% since the announcement of the deal with Hertz, pushing the company's valuation to more than $1 trillion. Tesla has been burdened by many production delays and challenges meeting demand. Supply chain issues and difficulties with acquiring semiconductor chips could put a wrench in the plans to meet new production demands associated with the Hertz deal.
Nearly 40% of U.S. consumers are likely to consider buying an electric vehicle for their next car. Confidence in EVs has grown, as sales have increased by about 200% in the past year. Automakers are jumping on board as well, with three brands announcing that they will increase EV sales by 40% to 50% by 2030.
With more electric vehicles on the road, there is a need for more charging stations across the country. The partnership with Tesla will give Hertz customers access to 3,000 Tesla supercharging stations. Hertz will also include digital guidance to teach customers about the electric vehicle and eventually make it easier to rent EVs through its mobile app.
Electric Uber-Hertz Rental
Partnering with Uber, Hertz will make up to 50,000 Tesla vehicles available to rent by 2023. Starting Nov. 1, drivers in Los Angeles, San Francisco, San Diego, and Washington D.C. can rent Tesla cars from Hertz through this program. Customers will receive a preferred weekly rate for these Hertz rentals, including insurance, maintenance, and unlimited miles.
These announcements come as the appetite to incentivize consumers to buy electric vehicles has increased across the country, including at the federal level. There are several pieces of legislation that could encourage people to purchase an EV over a car with an internal combustion engine, possibly adding up to a potential $12,500 in tax credits.
However, the some of the incentives for electric vehicles could end up boosting some automakers over others. The legislation has faced criticism from Tesla founder Elon Musk because an additional credit for automakers does not apply to his non-unionized facilities. Although Musk may be unhappy with that part of the bill, other credits included in the legislation could boost sales for Tesla's more economically priced Model 3.