Stock prices soared to record highs after last week’s announcement that Hertz Corporation had purchased 100,000 Teslas to add to its rental fleet. Despite some confusion on social media, stocks for both companies are staying well above their pre-announcement levels. “This is a major milestone in the transformation of the whole automotive industry to electric,” said Mark Pastrone, COO at SemaConnect. “Not only will EVs now be more accessible to the public, but there will also be more pressure to advance charging infrastructure.”
Hertz’s decision to invest in an EV rental fleet signifies its confidence in the technology. Unlike typical rental fleet purchases, it seems that Hertz is buying the Teslas with little to no discount. The purchase is a bold financial choice. The decision to move forward at full price shows that Hertz sees the economic scale is now weighing in favor of EVs over fossil fuel powered cars. It looks like investors agree.
Tesla, which has seen consistently rising stock prices since the stock split in December 2020, reached a $1 trillion valuation shortly after Hertz announced its multibillion-dollar purchase. Tesla is one of only six US-based companies to ever reach this mark.
As one of the largest vehicle rental companies in the world, Hertz’s commitment to an EV fleet will likely inspire other companies to follow suit with their own electric fleets.
For the average American, electric cars may still feel inaccessible. The perception that EVs are unaffordable has remained despite incentives and dramatically reduced purchase prices. The lack of easy-to-find public charging options also discourages people from going electric. Having an option to rent an EV, as a sort of “extended test drive,” has the potential to change the way people think about electric transportation.
Most Americans have yet to ride or drive an electric car. “It’s one thing to read about the driving experience,” said Mark, “but it’s completely different to actually be in one.” He predicts that renting an EV will motivate many drivers to make the switch. In addition to offering Teslas to renters, Hertz announced that it is partnering with Uber to allow its rideshare drivers access to 50% of the electric fleet.
Right now, EV charging is primarily done in the home overnight, but this will not be an option for the large majority of people renting an EV. With Teslas already being delivered to some Hertz locations, the demand for charging stations is primed to spike. “Stations will need to be everywhere renters typically go, so it’s going to become critical for hospitality and retail businesses to provide charging options,” Mark continued. He also noted that business travelers renting an EV will increase the need for charging stations at the workplace.
According to Mark, “this is a huge sign that EVs are here, and they are here to stay. We couldn’t be more excited.”
Laura Zabriskie is the Marketing Content Program Manager at SemaConnect. She brings a passion for writing and experience translating complex topics into content that is understandable and relevant to consumers. She earned her Bachelor of Science degree in Marketing and Supply Chain Management from the University of Maryland College Park. Prior to joining SemaConnect, Laura worked at Greater Baltimore Medical Center where she created and managed content for clinical departments.