Rental car company Hertz Global Holdings Inc has taken its first big step toward electrifying its fleet by ordering 100,000 Teslas. The company is expected to receive the first tranche of Tesla’s Model 3 sedans as early as November. The entire fleet will be delivered over the course of the next fourteen months. This is going to be a tough task for Tesla as it already has a tight supply schedule. Following this, these EVs would be available to rent from Hertz in major European and US markets. The announcement has been made just a month after the car rental company escaped bankruptcy.
Soon after the company announced the purchase, the market cap of Tesla briefly crossed USD 1 trillion as stock price reached as high as USD 998.74. This put the company in the group of a few selected companies with a trillion-dollar market cap. Some of them are Amazon, Apple, and Microsoft. This is reportedly the single largest order ever for EVs and is valued at worth USD 2.4 billion in revenue to Elon Musk’s company. Earlier, it was reported that Model 3 of the company became the first EV to be on top of monthly sales charts in Europe this September. Tesla has been extremely popular among peer-to-peer car-sharing companies in San Francisco.
Moreover, Tesla reported record sales in the third quarter of this year. This is an achievement because the company did this despite chip shortages that have heavily dented the automotive market. It must be noted that Hertz is apparently paying list prices of the EVs to Tesla. Also, the size of the order indicates that the company must be getting a discount. This is not surprising as car rental companies usually get such discounts from automakers. Electrification of fleets is the first big initiative by Hertz after it emerged from bankruptcy in June this year. This also hints towards the intentions of Hertz’s new owners – Knighthead Capital Management and Certares Management.