Inside Tesla’s $4.2 Billion Model 3 Sale to Hertz
In 2021, Tesla announced plans to sell a fleet of its Model 3 sedans to rental car company Hertz. The sale amounted to around $4.2 billion for 100,000 units, and some now consider the strategic partnership an impressive and mutually beneficial move for both companies.
Above: A Tesla Model 3 (Image: Casey Murphy / EVANNEX).
Tesla’s sale of 100,000 Model 3 units to Hertz has gone on to be a brilliant move and a game-changer, according to Inc.com’s Kelly Main. As she points out, Bloomberg reported at the time that the move had launched Tesla’s value past $1 trillion, and it has seemingly been a success for both parties ever since.
Hertz was founded over a hundred years ago, though the shift to include Tesla’s vehicles in its lineup was a surprising show of modernity. The announcement came just months after the company had exited bankruptcy, and with new ownership, the Model 3 purchase represented the single-largest sale of electric vehicles yet.
For Tesla, as Main points out, the sale was basically a creative marketing tool that got the EV company’s name out there to a large number of vehicle renters. It also made Hertz somewhat of a stakeholder with a multi-billion dollar investment into Tesla, that would pay out over several months.
It’s also a win for the consumer. Those thinking about buying an EV can affordably test the vehicle without needing to purchase their own. Additionally, a rental experience offers users more time with a vehicle than the 15-20 minutes garnered from a test drive — which Main notes isn’t even enough time to fully charge an EV.
Since the purchase, Hertz has begun carrying other EVs such as the Tesla Model Y, the Chevy Bolt, the Kia EV6, the Polestar 2 and more. Continued demand for EVs will increase the company’s offerings over time, so we can probably expect even more in the years to come. Charging remains a concern for many who are new to EVs, and it’s a paradigm shift to consider that everything from air conditioning to charging a smart device could decrease your battery’s capacity.
However, those using Tesla EVs have access to its vast network of Superchargers, and the Hertz deal has helped push demand for more charging stations in general. In addition, Hertz has partnered with gas company British Petroleum on a national charging network, with BP expected to invest around $1 billion into the EV charging stations.
Thus far, the sale has played a landmark role in progressing the adoption of EVs, and one that has benefited both Tesla and Hertz to seemingly great degrees.
===Sources: Inc.com / Bloomberg