Uber drivers will soon be able to rent Tesla vehicles from Hertz and can earn extra money as a reward for using an electric vehicle, according to US media reports.
Hertz has earlier reported seeing "very, very solid" demand for Tesla EVs, said CEO Stephen Scherr, who took over as Hertz CEO earlier this year after many years in executive roles at Goldman Sachs.
"Demand has been very, very solid," Scherr told Yahoo Finance Live. "We’re seeing demand not just among leisure travelers but also among corporate travelers, where in fact corporations want their employees in an electric vehicle to satisfy some of their own carbon footprint objectives."
The company aims to have 25% of its fleet be EVs by the end of 2024. Currently, about 5% of the fleet is electric, Scherr said.
Given the influx of driver-friendly EVs and solid travel demand, Scherr struck an upbeat tone on the outlook for holiday season bookings.
In late September, Hertz stock got a boost after the rental car company revealed a new EV charging station deal with oil giant BP.
100,000 units ordered
The rental car company has ordered 100,000 EVs from Tesla in October 2021, in the first step of an ambitious plan to electrify its rental-car fleet. It's the single-largest purchase ever for electric vehicles and represents about $4.2 billion of revenue for Tesla.
While car-rental companies typically demand big discounts from automakers, the size of the order implies that Hertz is paying close to list prices.
The cars will be delivered over the next 14 months, and Tesla's Model 3 sedans will be available to rent at Hertz locations in major U.S. markets and parts of Europe starting in early November, the people said. Customers will have access to Tesla's network of superchargers, and Hertz is also building its own charging infrastructure, they said.
The electrification plan, which eventually will encompass almost all of Hertz's half-million cars and trucks worldwide, is the company's first big initiative since emerging from bankruptcy in June. And it signals that Hertz's new owners, Knighthead Capital Management and Certares Management, are intent on shaking up an industry dominated by a handful of large players who are typically slow to change.
Boxing out competition
By locking up so much of Tesla's production — the order is equivalent to about 1/10 of what the EV maker produces in a year — Hertz may box out rivals from copycatting the strategy. Hertz also is breaking with tradition by paying full price for well-appointed cars rather than the typical base-model, heavily discounted sedans that populate rental lots.
In 2020, General Motors Co. was Hertz's biggest car and truck supplier, followed by Nissan Motor Co. and Ford Motor Co.
Teslas, with zero tailpipe emissions, will appeal to rental customers who want a green option or those eager to try out an battery-powered vehicle. Hertz may look to EVs because they're less expensive to maintain and refuel, and they typically don't lose as much value in the resale market as vehicles with internal combustion engines.
