Tesla, Hertz shares rise following order for 100,000 EVs

Car rental giant Hertz has placed an order for 100,000 Tesla vehicles to be delivered by the end of 2022 in the largest single purchase of EVs ever. The deal, which will push the car rental giant’s EV offerings to 20% of its global fleet, is reportedly worth $4.2 billion, according to sources cited by Bloomberg.

Tesla Model 3 vehicles will show up in the Hertz rental inventory as early as next month in major U.S. markets and select cities in Europe, according to the rental company.

The order will likely represent a notable portion of Teslas manufactured and delivered over the next 14 months. The EV maker delivered 499,550 vehicles in 2020, with the vast majority of these being its most popular Model 3 sedan. Production and deliveries have risen this year. Tesla delivered 627,572 through the first three quarters of 2021. The company produced around 624,582 vehicles in that same nine-month time period.

Hertz also announced plans to install thousands of chargers throughout its network to support the increase in EVs, in addition to a “premium and differentiated rental experience” for customers renting a Tesla that includes educating drivers on how to use and charge the car. Customers who rent a Tesla Model 3 will also have access to Tesla’s supercharging stations, infrastructure that is already under pressure in some locations as sales of the Tesla EVs skyrocket.

Tesla shares rose more than 5% following the news, pushing the stock price to $960 shortly after the market opened. Hertz stock also saw an 11% increase, to around $27.

Like other companies in the travel and tourism industry, Hertz had a rocky pandemic, with decreased rentals pushing the company to file for bankruptcy protection in May last year. The deal with Tesla comes just four months after Hertz emerged from bankruptcy, amidst a remarkable rebound for the rental car industry. Investment firms Knighthead Capital Management and Certares Management took over Hertz earlier this year.