Car rental company Hertz has ordered 100,000 electric vehicles from Tesla in a move that some analysts say further validates a growing electric vehicle movement in the U.S.
Hertz said Monday that it’s buying the Tesla Model 3 cars by the end of 2022, and it also will create its own electric vehicle-charging network. Hertz didn’t disclose how much it paid for the order, but analysts at Wedbush Securities estimated the deal at $4.2 billion. The base price for a Model 3 is about $40,000.
“While Hertz is in the early stages of electrifying its rental car fleet, Tesla getting an order of this magnitude highlights the broader electric vehicle adoption underway in our opinion as part of this oncoming green tidal wave now hitting the U.S.,” analysts Daniel Ives and John Katsingris said in a research note.
Tesla’s stock price soared after the Hertz announcement, topping $1,020 in afternoon trade and valuing the company at $1 trillion for the first time — more than Daimler, Ford, General Motors, Honda, Toyota and Volkswagen put together.
Hertz interim CEO Mark Fields told The Associated Press that the company has the capital and a healthy balance sheet after emerging from bankruptcy protection in June. Fields said Teslas are already arriving at Hertz sites and should be available for rental in November. He added that Hertz intends to lead as a mobility company with the largest electric vehicle rental fleet in North America.
The Wedbush analysts and Hertz officials said the demand for electric vehicles is rising. The Wedbush analysts said electric vehicles will grow to be a $5 trillion market over the next decade. Surveys show that during the past five years, consumers have progressed toward being interested in driving and buying electric vehicles, Fields said.
“More are willing to try and buy,” said Fields, who took over as interim CEO in October. “It’s pretty stunning.”
Hertz is talking to other automakers about buying more electric vehicles as more models enter the marketplace, said Fields, a former Ford Motor executive.
Hertz is also investing in its own charging network, planning for 3,000 chargers in 65 locations across the U.S. by the end of 2022, and 4,000 by the end of 2023, Fields said.
Hertz emerged from bankruptcy protection in June after. It was among the first major corporations to be felled by the pandemic last year as infections surged and shut down travel on a global scale for both companies and vacationers.