What used to be a sign of an unhealthy automaker is now potentially a good sign of growth because Hertz has said they have purchased 100,000 electric vehicles from Tesla.
Bloomberg is reporting that the purchase will total $4.2 billion for Tesla and be the largest EV purchase in history. Renters will have access to Tesla’s Supercharger infrastructure as well as Hertz’s own charging network that it intends to roll out.
Renters will be able to start using the Tesla Model 3 fleet vehicles in the United States and in Europe starting in November.
It’s no surprise that Hertz would opt for Tesla Model 3 vehicles for its first big EV purchase. While there are no more government incentives in the United States currently for the Fremont-built electric sedan, the Supercharger network is still the most robust and reliable network currently out there. Being able to have rental customers “refuel” their vehicles in tons of places is important to a rental company, not only for ongoing fleet operations but also customer service.
What’s more interesting is the company plans on rolling out its own charging infrastructure. Instead of just waiting for the government to come along, or Electrify America to continue its rollout, Hertz is taking matters into its own hands. That tells us that the company plans on purchasing more electric cars in the future, and that they all might not be Tesla vehicles.
As we alluded to earlier, selling to rental fleets is often a sign of an automaker trying to push metal in troublesome economic times. Rental fleet vehicles are often de-contented vehicles that end up flooding the used market and driving down transaction prices and perceived value of the brand.
But it’s 2021, and there is a microchip shortage. New car inventories are low and nearly every automaker is having a stellar sales year. It’s unlikely that Tesla “needs” to make these sales.
Additionally, we’re big proponents of butts in seats. Putting 100,000 electric vehicles into a large rental fleet with allow more people to experience and live with an electric car. Those customers might even decide to purchase one. Since they’ll have had experience with Tesla, they might even decide to order one of those cars.
So while it might seem unusual during normal economic times, these are unprecedented times and Hertz is clearly going on all in after bankruptcy on electric-powered transportation.