On Monday 25th Oct., Hertz Global Holdings announced that the company just ordered 100,000 vehicles from Tesla for its electric vehicle rental fleet. The deal boosted Tesla’s market value to US$1.03 trillion which made Tesla the first car-making company joining the likes of Apple, Facebook, and Amazon in the trillion-dollar company club. The news also skyrocketed Tesla’s stock from $900 to $1,045 and closed up 12.66% at approximately $1,024 a share.
It is uncommon for carmakers to brag about deals with rental car companies due to plans to discard the oversupply of slow-selling cars. But that is certainly not the case with Tesla and Hertz. For Tesla’s investors, Hertz’s decision will influence the mass car market in the near future. The construction of the electric car rental fleet is expected to start by the end of 2022.
As reported by Reuters, Hertz interim chief executive Mark Fields stated that he started to see the increasing global demands for electric vehicles as they are going mainstream. According to consulting firm Jato Dynamics, the inflating demand for electric cars made the Tesla’s Model 3 the best-selling vehicle in Europe last month (September 2021).
The order for 100,000 Tesla cars may be worth approximately US$4.4 billion if it were to entirely aim for Tesla’s cheapest model alone, which costs around US$44,000 per car. However, Tesla couldn’t be contacted for further comment and Hertz refused to tell the exact number of the order.
Tesla’s order will take 20% of the space of Hertz’s total fleet. Hertz added that 3,000 Tesla supercharging stations will be available across the US and Europe for customers who choose to rent electric cars.