Hertz car rental company has commissioned 100,000 electric vehicles from Tesla to the extent that some analysts say it further validates a growing movement of electric vehicles in the United States.
Hertz said Monday it will buy Tesla Model 3 cars in late 2022 and will also create its own electric vehicle charging network. Hertz did not disclose how much it paid for the order, but Wedbush Securities analysts estimated the deal at $ 4.2 billion. The base price of a Model 3 is about $ 40,000.
“While Hertz is in the early stages of electrifying its rental car fleet, Tesla by obtaining an order of this magnitude highlights the wider adoption of electric vehicles in progress, in our view, as part of that green wave now approaching the United States, “analysts Daniel Ives and John Katsingris said in a research note.
Tesla’s stock price skyrocketed after Hertz’s announcement, topping $ 1,020 in afternoon trading and valuing the company at $ 1 trillion for the first time, more than Daimler, Ford, General Motors, Honda, Toyota and Volkswagen together.
Hertz interim CEO Mark Fields told The Associated Press that the company has capital and a healthy balance sheet after stepping out of bankruptcy protection in June. Fields said the Tesla’s are already arriving at Hertz sites and should be available for rent in November. He added that Hertz intends to lead as a mobility company with the largest electric vehicle rental fleet in North America.
Wedbush analysts and Hertz officials said demand for electric vehicles is rising. Wedbush analysts said electric vehicles will grow to a $ 5 trillion market over the next decade. Surveys show that over the past five years, consumers have moved toward being interested in driving and buying electric vehicles, Fields said.
“More are willing to try and buy,” said Fields, who took over as interim CEO in October. “It’s pretty awesome.”
Hertz is talking to other automakers to buy more electric vehicles as more models enter the market, said Fields, a former Ford Motor executive.
Hertz is also investing in its own charging network, planning 3,000 chargers in 65 U.S. locations by the end of 2022 and 4,000 by the end of 2023, Fields said.
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Hertz left bankruptcy protection in June applying for bankruptcy protection in May 2020. It was one of the first major corporations to fall into the pandemic last year, as infections increased and closed world-class travel for both businesses and tourists.
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