Hertz places largest fleet order of Tesla EVs to date

Early on Monday, rental car company Hertz confirmed in a press release that they have ordered 100,000 Tesla EVs for their fleet operations. The deal is worth $4.2 billion, and the vehicles are to be delivered to Hertz by the end of 2022. In addition to the EV purchases, Hertz will implement their own charging infrastructure across its operations globally.

Former Ford CEO Mark Fields is the recently appointed CEO at Hertz. He states in the release, “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.”

The fleet of EVs announced Monday appears to be all Tesla Model 3s which will be available in major markets across the US and in select European cities. The rental agency will be establishing an “expedited EV rental booking process through the Hertz mobile app” that’s differentiated from how current rentals are handled.

Once the order has been fulfilled, more than 20% of their fleet worldwide will be fully electric, and more than 100 markets globally will be supported by Level 2 or DC fast charging.

Major investment fresh out of bankruptcy

Just four months ago, Hertz exited Chapter 11 bankruptcy as a leaner, more streamlined company. The rental company trimmed roughly $5 billion of debt and increased its liquidity with an excellent credit facility for operations. All of the creditors were to receive payment in full while Hertz was also able to serve investors with more than $1 billion in value.

The Bankruptcy Court judge, Mary Walrath, said that the culmination “surpasses any result that I’ve seen in any Chapter 11 case that I’ve faced in my 20-plus years.”

The investment into a fleet of Tesla cars seems to demonstrate a new business model for Hertz. They’re also the only member of the Corporate Electric Vehicle Alliance that’s a rental car service. Between these two positions, concluding that Hertz will continue expanding their fleet with many more EVs in the future seems to be a given.

Opportunity to try EV before you buy

The move to an electrified fleet of EVs makes sense for Hertz, especially with access to Tesla’s Supercharger network, effectively reducing fuel expenses and enhancing the customer experience. Though the transition to electric might be inevitable for Hertz and other rental agencies, it comes with perks for customers as well.

Those interested in the viability of an EV for their own household or business can rent one to ‘test its metal’. Most importantly, by trying an EV, shoppers can determine whether an EV’s range will be sufficient for their needs.

For carmakers other than Tesla, it will be key to get electrified models into the rental fleet as soon as possible for the same reasons. However, the option to try a Tesla won’t necessarily culminate in a Tesla purchase. Car buyers are still shy to buy from a carmaker without a strong dealer network.

Did you enjoy this article from Jason Unrau? Read other articles on CBT News here. Please share your thoughts, comments, or questions regarding this topic by submitting a letter to the editor here, or connect with us at newsroom@cbtnews.com.