Elon Musk’s Tesla Inc has scored its biggest-ever order worth $4.4 billion after Hertz Global Holdings Inc has announced it would buy 100,000 EVs in in a huge first step toward electrifying its rental-car fleet and mainstreaming EVs just months after emerging from bankruptcy, Bloomberg reports.
The cars of the single-largest purchase ever for EVs should be delivered over the next 14 months- by the end of 2022- from an already tight supply of vehicles Tesla has on disposal while coping with continuing supply chain disruptions and the backlog of unfulfilled orders for its vehicles.
Only last week Tesla’s Chief Financial Officer Zach Kirkhorn said the company’s backlogs are continuing to grow and average customer wait times are extending.
The cost of the order implies that Hertz is not getting a discount for its large order, which car-rental companies usually get from automakers, but is paying list prices for the Tesla EVs, with the cheapest Model 3 sedan starting at about $44,000.
With the current order, EVs will make up more than 20% of Hertz’s global fleet, another solid evidence EVs are going mainstream, and will also install thousands of chargers throughout its network so the customers renting the Model 3 will have 3,000 Tesla supercharging stations at disposal throughout the United States and Europe.
Starting in early November, according to sources, Tesla Model 3s will be available to rent at Hertz locations in major US markets and parts of Europe.
As travel demand sank during the height of the COVID pandemic and talks with creditors failed to provide relief, Hertz had filed for bankruptcy protection in May 2020, but was rescued by a group of investors including Knighthead Capital Management, Certares Opportunities and Apollo Capital Management.
Due to high demand for rental cars soon after, Hertz officially emerged from bankruptcy on June 30, shedding more than $5 billion in debt.
Even as it warned that supply chain headwinds would pressure margins, Tesla Inc, the world’s most valuable automaker managed to deliver record 241,300 EVs globally in Q3 with its stock going up 4.3% in premarket trading and set to open at a record high following the latest order.
The shares’ value is additionally fueled by the news that the company’s Model 3 is becoming the first electric vehicle to top monthly sales of new cars in Europe.
As the brokerage expects the electric carmaker to keep posting higher volumes, reaching more than 8 million deliveries in 2030, Morgan Stanley’s analysts bumped their price target on Tesla by 33%.
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