Electrek.co
by Michelle Lewis
October 25, 2021
Bloomberg points out that the cost of the order implies that Hertz is paying list prices for the Teslas, and is thus not getting a discount for its large order, which car-rental companies usually get from automakers.
Tesla Model 3s will be available to rent at Hertz locations in major US markets and parts of Europe starting in early November, according to the source. Customers will of course have access to Superchargers, and Hertz is also building its own charging infrastructure.
Bloomberg writes: The electrification plan, which eventually will encompass almost all of Hertz’s half-million cars and trucks worldwide, is the company’s first big initiative since emerging from bankruptcy in June. And it signals that Hertz’s new owners, Knighthead Capital Management and Certares Management, are intent on shaking up an industry dominated by a handful of large players who are typically slow to change.
Hertz filed for bankruptcy in May 2020 as a result of the pandemic travel slump. Demand for rental cars then swung sharply upward, partly due to the result of a car shortage, driven by high demand for used cars and supply chain disruptions, as well as a rebound in travel. In a quick turnaround due to high demand for rental cars, Hertz officially emerged from bankruptcy on June 30, which allowed it to shed more than $5 billion in debt.
Electrek’s Take This is a huge win for Teslas and EVs in general. Getting bottoms in seats will speed adoption. It’s interesting to see Hertz interim CEO Mark Fields leading the charge here, since Fields was ousted from Ford a few years back largely for not modernizing the company and preparing properly for the onslaught of EVs. It’s also a big win for Hertz since we, and I assume most Tesla owners, will look there first when renting cars. I’m going to assume that they won’t expect to return the cars charged and hope they don’t charge some idiotic “recharging fee” akin to the $9.99 they charge for gas if you don’t return the car full.
The other big thing to consider is how this is going to affect the supply of Model 3s. Tesla already can’t make enough cars and is currently at a 1 million-car-per-year run rate. However, assuming Austin and Berlin get online soon, the automaker should be able to cover this extra demand in stride over the next year and two months.
But that’s really just the start. We have to assume that other rental car agencies will have to buy in to keep up. Nothing but upside here.