Tesla & Hertz Stock Surge on 100,000 EV Order

Hertz Makes Historic Tesla Order

Hertz, a leading car rental company, has committed to purchasing 100,000 Tesla vehicles. Deliveries are scheduled to be completed by the close of 2022, marking the largest ever single order of electric vehicles (EVs).

Deal Details and Fleet Impact

This substantial agreement, valued at approximately $4.2 billion as reported by Bloomberg sources, will enable Hertz to offer EVs as 20% of its entire global fleet. The integration of these vehicles represents a significant shift towards sustainable transportation options.

Tesla Model 3 vehicles are anticipated to become available for rental as soon as next month. Initial deployment will focus on key U.S. markets and select European cities.

Production and Delivery Considerations

The magnitude of this order is expected to account for a considerable percentage of Tesla’s total vehicle production and deliveries over the next fourteen months. In 2020, Tesla delivered 499,550 vehicles, with the Model 3 constituting the majority of those sales.

Production figures have increased throughout 2021. Through the first three quarters, Tesla reported 627,572 deliveries and produced approximately 624,582 vehicles.

Infrastructure and Customer Experience

Alongside the vehicle acquisition, Hertz is planning to install a widespread network of charging stations. This infrastructure will support the growing number of EVs in its fleet.

The company also intends to provide a unique rental experience for Tesla customers. This will include comprehensive guidance on vehicle operation and charging procedures. Renters of the Tesla Model 3 will gain access to Tesla’s Supercharger network.

Market Reaction

Following the announcement, Tesla’s stock price experienced a surge, increasing by over 5% to reach $960 shortly after market opening. Hertz stock also benefited, rising by approximately 11% to around $27.

Hertz’s Recent Restructuring

Hertz faced significant challenges during the pandemic, leading to a bankruptcy filing in May of the previous year. However, the company successfully emerged from bankruptcy just four months ago, coinciding with a strong recovery within the rental car industry.

Currently, Knighthead Capital Management and Certares Management are the controlling stakeholders of Hertz.