Hertz agrees to purchase 65,000 Polestar electric vehicles
Hertz Global Holdings Inc. has agreed to purchase up to 65,000 electric vehicles from Swedish automaker Polestar over a five-year period, as part of the rental car company’s goal of expanding its plug-in offering.
The rental car industry, long a major buyer of new models in the auto business, is increasing efforts to add more battery-powered vehicles to fleets.
The addition of electric vehicles allows rental car companies to show their acceptance of greener technologies and reduce their greenhouse gas emissions, but it comes with challenges. Electric vehicles tend to be more expensive, resulting in higher upfront costs for rental companies and potentially higher prices for renters. In addition, a lack of public charging networks could prove difficult for leisure travelers and affect the customer experience.
Hertz expects Polestar vehicles to be available in Europe starting this spring and in North America and Australia later this year. Hertz will initially order the Polestar 2, the electric vehicle maker’s main production model, which will be marketed as a competitor to Tesla Inc.’s Model 3.
Polestar, owned by Chinese automaker Zhejiang Geely Holding Group Co., focuses on high-performance electric cars. Zhejiang Geely is controlled by its billionaire chairman and founder, Li Shufu. It owns Geely Automobile Holdings Ltd., Volvo Car Group and other electric vehicle brands. Polestar said it produced 29,000 vehicles in 2021.
In October, Hertz placed an order for 100,000 vehicles with electric car pioneer Tesla. At the time, Hertz said the order would increase the mix of electric cars to 20% of its total fleet. Tesla boss Elon Musk later expressed doubts about the deal and wrote on Twitter that a contract had yet to be signed. In response to Musk’s tweet, Hertz reconfirmed that the order had been placed and stated that some Tesla Model 3 deliveries had already begun.
The rental car company has undergone a restructuring since its bankruptcy in May 2020 after the decline in the value of its used car fleet led to a debt crisis. It became a meme stock cheered on by an army of individual traders, and business rebounded faster than expected as the pandemic shifted Americans’ habits.
Demand for rental cars has increased during the pandemic as many consumers have avoided planes and public transport and relocated to work remotely. When a group of investment firms took over Hertz last June, shareholders got $8 a share — almost unheard of in bankruptcies that typically wipe out shareholders.
Hertz went public again in November and has a market value of about $9 billion, three times its pre-pandemic value. In February, Hertz named Stephen Scherr, a former Goldman Sachs Group Inc. executive, as its next chairman.
This story was published from a wire agency feed with no changes to the text
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