If you’re a Tesla shareholder today, have a drink and celebrate. $TSLA rose more than 12.6% in a single day to reach a share price of more than $1,024. This moves the company’s Market Cap above $1.01 Trillion for the first time, joining an elite list of companies globally to do so.
This dramatic move in the stock price is off the back of record vehicle production deliveries in Q3, strong financial results on last weeks earnings call and a number of analysts upgrading their Tesla forecasts.
It was perhaps a new order announced by Hertz that has been the catalyst for today’s big move. Most Australians would be familiar with vehicle rental company Hertz, but they have a global footprint and whenever people need loan cars, or temporary transport on trips, Hertz is a popular choice.
During the pandemic, Hertz was hit hard with a lack of demand as the world stopped travelling, but like many companies, the rebuilding story is one of opportunity, a rethink about the next decade and beyond.
As consumer interest in electric vehicles (EV) skyrockets, Hertz today announced the largest single order for Tesla to date. This includes an initial order of 100,000 Teslas by the end of 2022 and new EV charging infrastructure across the company’s global operations. This significant investment will see Hertz become the largest supplier of EVs in a rental fleet in North America and one of the largest in the world.
It is understood that there is no special bulk pricing for the deal and at full retail, Hertz will spend more than US$4Billion. What’s amazing about that number is that it accounts for roughly one quarter of the company’s $12.8Bil Market Cap (before today).
It is clear that on the back of Covid, Hertz has decided to take a big, bold direction shift in their vehicle fleet and set up their company to not just move to EVs, but be a leader in the zero-emission transition.
To help promote this move, Hertz teamed up with 7-time Super Bowl champion and entrepreneur Tom Brady to showcase how it is making EV rentals fast, seamless and more accessible, as the company accelerates its commitment to lead the future of mobility and travel.
“Electric vehicles are now mainstream, and we’ve only just begun to see rising global demand and interest,” said Hertz interim CEO Mark Fields. “The new Hertz is going to lead the way as a mobility company, starting with the largest EV rental fleet in North America and a commitment to grow our EV fleet and provide the best rental and recharging experience for leisure and business customers around the world.”
Hire a Model 3 in Australia
Regarding the Australian offering, Hertz already offer the Model 3 at 2 sites, the Adelaide Airport and Canberra airport.
To celebrate their introduction, Hertz are currently offering 10% off the base rate when you rent the Tesla for a minimum of 1 day. The offer valid through to the 30th November, 2021.
Let’s hope that many more locations are added locally.
Today, 40% of U.S. consumers say they are likely to consider an electric vehicle the next time they are in the market for a new vehicle, according to Pew. Global EV sales skyrocketed 200% in the last year and will likely continue to grow with commitments from global automakers to increase EV sales. For example, in August, three U.S. automakers pledged to boost EV sales to 40-50% by 2030.
The growth is powered by electric vehicles’ high efficiency, positive user experience and climate change benefits – coupled with battery breakthroughs and rapidly expanding charging networks. EV drivers also benefit from lower maintenance and fuel costs.
Beginning in early November and expanding through year end, customers will be able to rent a Tesla Model 3 at Hertz airport and neighborhood locations in U.S. major markets and select cities in Europe. To learn more, visit hertz.com/ev.
The configurator today allows customers to select their rental car type, however their ‘Green Traveler Collection’ includes a suite of ICE vehicles, albeit small, efficient ones. I expect this to be replaced by exclusively electric vehicles in the months ahead.
While there’s currently no mention of what the Tesla Model 3s will be priced at to hire, what we do know is that the ongoing running costs and maintenance is dramatically lower than traditional vehicles. This means if you’re planning on keeping the vehicles for a number of years (I expect Hertz will) the higher up-front cost, combined with shifting consumer demand, will see this be a very lucrative decision over the medium and long term.
Hertz also is installing thousands of chargers throughout its location network. Customers who rent a Tesla Model 3 will have access to 3,000 Tesla supercharging stations throughout the U.S. and Europe.
Hertz will offer a premium and differentiated rental experience for the Tesla EVs. This includes digitized guidance to educate customers about the electric vehicle to get them on their way quickly, and coming soon, an expedited EV rental booking process through the Hertz mobile app.
With the current order, EVs will comprise more than 20 percent of Hertz global fleet and is expected to be supported by a combination of Level 2 and DC fast charging in approximately 65 markets by the end of 2022 and more than 100 markets by the end of 2023. Hertz said these ambitions could be affected by factors outside of Hertz’s control, such as semiconductor chip shortages or other constraints.
It is interesting that Hertz have selected Model 3 exclusively in this new order, I would have expected there to be a mix of Model Y, but they did say this is just the initial order. For Tesla, they’re getting close to shipping a million cars per year globally, so 100,000 from a single order is a big deal. Let’s remember that they already have plenty of demand and multiple month wait times.
These Tesla Model 3 SR+ for Hertz are likely to use the LFP battery which is capable of charging to 100% daily without much degradation and achieves up to 260 miles (418km).
There’s a number of questions that come out of an announcement like this, namely who will follow. The car rental industry is incredibly competitive and if this announces sees customers flock to Hertz because they running not just EVs, but specifically Tesla’s, we could see some more bulk orders coming.
When we consider alternatives, there would be very few, if any, alternate EV manufacturers that could have facilitates an order of this size, while many OEMs are moving to EVs, almost none outside Tesla have volume production in place.
“Hertz, Let’s Go!” with Tom Brady
To spread the word about its leadership on EV rentals, Hertz is partnering with seven-time Super Bowl champion Tom Brady for a new “Hertz, Let’s Go!” campaign.
Two new ads – “Plugged In” and “Speed” – beginning today show Brady renting, recharging and using an EV at a Hertz airport location. The spots use humor and Brady’s signature “Let’s Go” game-day rallying cry to underscore Hertz’s reputation for excellence, speed and ease throughout the travel experience.
“Hertz is changing the game when it comes to the future of mobility and has come through for me time and time again.
Although the company has been around for over 100 years, their constant evolution, especially now, is something that is amazing to be a part of. I’ve been driving an EV for years and knowing Hertz is leading the way with their electric fleet speaks to how the world is changing and the way companies are approaching being environmentally and socially conscious.
I’ve always loved how easy and convenient Hertz makes it for me when I’m traveling to my favorite places like New York, LA and Tampa and can’t wait to see what they continue to have in store.”
Tom Brady.
The New Hertz
Hertz is combining its brand strength and global fleet management expertise with new technology and innovations to chart a dynamic, new course for travel, mobility and the auto industry. The company’s commitment to becoming an essential component of the modern mobility ecosystem includes Hertz leading in electrification, shared mobility and a digital-first customer experience.
Today’s investment in electric vehicles builds on Hertz’s pioneering work in its rental operations during the past decade. Hertz was the first U.S. car rental company to introduce EVs to its rental fleet in 2011 and the first to implement a wireless charging system for electric vehicles. The company also is the exclusive rental car member of the Corporate Electric Vehicle Alliance, a consortium of companies focused on accelerating the transition to electric vehicles.
