Hertz orders 100,000 Teslas, bringing electric vehicle maker market value to $ 1,000 billion – Orange County Register


By Tom Krisher | The Associated Press

Hertz said on Monday it would buy 100,000 electric vehicles from Tesla, one of the largest battery-powered car purchases in history and the latest proof of the country’s growing commitment to EV technology.

Purchase by one of the world’s leading car rental companies reflects its belief that electric vehicles are increasingly accepted by environmentally conscious consumers as an alternative to vehicles powered by combustion engines internal oil-fired.

The Hertz order helped push Tesla’s stock price up nearly 13% into record territory on Monday night. The stock traded at $ 1,024.84, bringing the total market value of the world’s most valuable automaker to just over $ 1,000 billion for the first time. The increase also added $ 23.7 billion to the net worth of Tesla CEO Elon Musk, the richest man in the world. It is now worth just over $ 253 billion, according to Forbes.

In an interview with The Associated Press, Mark Fields, Hertz’s interim CEO, said Tesla’s were already arriving at company locations and should be available for hire from November.

Hertz announced on Monday that it would buy 100,000 electric vehicles from Tesla. (AP File Photo / David Zalubowski)

Hertz said in its announcement that it will complete its purchases of Tesla Model 3 small cars by the end of 2022. It also said it will establish its own electric vehicle charging network as it strives to produce the largest rental fleet of electric vehicles in the North. America.

Fields would not say how much Hertz is spending on the order. But he said the company had sufficient capital and a healthy balance sheet after exiting bankruptcy protection in June.

The deal is probably worth around $ 4 billion, as each Model 3 has a base price of around $ 40,000. It also tops the list for single company electric vehicle orders. In 2019, Amazon ordered 100,000 electric delivery vans from Rivian, a young manufacturer of electric vans, pickup trucks and SUVs. Amazon is an investor in Rivian, based in Irvine.

Read more: Why Southern California is a New Electric Vehicle Mecca, with Rivian, Lordstown, and Karma

In his interview with the AP, Fields made it clear his belief that electric vehicles are becoming more widespread and that Hertz intends to be one of the leading providers of electric vehicles to rental customers. He pointed to surveys showing that over the past five years, consumer interest in electric vehicles has increased dramatically.

“More are ready to try and buy,” he said. “It’s quite astonishing.”

Fields said Hertz, which is based in Estero, Fla., Is also in talks with other automakers to purchase additional electric vehicles as it expands its electric vehicle fleet as more models come onto the market.

Hertz is also investing in its own charging network. Fields said it expects 3,000 chargers in 65 locations across the United States by the end of 2022 and 4,000 by the end of 2023. Many sites will be located in Hertz locations such as airports. , he said, while others will be in the suburbs. areas.

Customers could also use Tesla’s large charging network for a fee, Fields said. The company has a network of around 25,000 chargers around the world.

Fields declined to say how much Hertz will charge to lease the Teslas or whether they would be more expensive to customers than gasoline vehicles.

Daniel Ives, technology analyst at Wedbush Securities, wrote in a note to investors on Monday that Hertz’s order represents a “major feather in the hat” for Tesla and shows that widespread adoption of electric vehicles is underway “in the market. part of this coming green shift “. tidal wave hitting the United States “

China and Europe are ahead of the United States in vehicle electrification. But demand in the United States is accelerating, Ives noted, with Tesla in the lead, followed by startups Lucid Motors, General Motors, Ford and others looking for a potential $ 5,000 billion market opportunity over the course. of the next decade.

In an interview, Ives said he expects other car rental companies to follow Hertz’s lead.

“It is also a red flag for the rest of the industry,” he said.

Ives suggested the deal would help Tesla and other manufacturers by giving thousands of consumers the experience of driving electric vehicles that might not have otherwise been able to.

“This is the ultimate test drive,” he said. “For a company that doesn’t normally market, this is the best branding and marketing deal they’ve ever made,” he said of Tesla.

Hertz’s order could also help ease a nationwide shortage of rental cars, he said. Automakers have cut production and sales to car rental companies due to a global shortage of computer chips.

Still, Ives said he didn’t expect Hertz to receive a significant number from Tesla until the automaker’s new plant near Austin, Texas begins production at the end of the year. next.

Hertz will likely charge customers more to lease Model 3s compared to conventional combustion-engine vehicles, Ives noted.

Hertz Global Holdings Inc. filed for bankruptcy in May 2020, two months after the coronavirus erupted across the country. It was one of the first large companies to be brought down by the pandemic as infections increased and halted global travel for businesses and vacationers.

In October, Hertz appointed Fields, a former CEO of Ford Motor Co., as interim general manager.

Shortly after Hertz’s announcement on Monday, the National Transportation Safety Board issued a letter from its chairman berating Tesla for failing to respond to recommendations from several fatal crash investigations involving the driver assistance system partially automated company autopilot. The agency recommended four years ago that Tesla limit where its autopilot system can operate and that it better monitor drivers to make sure they are careful.

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