The Daily Update: Tesla Supercharged

The car rental company Hertz, just four short months out of bankruptcy, announced it has ordered 100,000 Tesla cars as part of an ambitious plan to begin to electrify a large part of its fleet. The deal is the single largest order ever for electric vehicles, and worth nearly USD4.5bn in revenue to Tesla. Unlike most other purchases by rental companies, in that there is a big discount by the car maker to secure the deal, the size and worth to Tesla implies that Hertz is paying close to list prices.

Hertz, which is more than 100 years old, went into bankruptcy 16 months ago as the car rental market was decimated by the global pandemic. The company was eventually re-financed to the tune of nearly USD6bn by investors. Hertz plans to electrify nearly all its roughly 500,000 cars and vans, with the Tesla order comprising a significant first chunk. Anyone renting a Tesla from Hertz will be able to use the automaker’s network of 3,000 superchargers across the US and Europe with Hertz also planning on supplementing these chargers with ‘thousands’ of its own chargers, dispersed throughout its location network.

The cars, which will be delivered over the next 14 months, will begin to be available to rent at Hertz locations in major U.S. markets and parts of Europe starting next month. In the press statement, Mark Fields Hertz’s interim CEO said: ‘Electric vehicles are now mainstream, and we’ve only just begun to see rising global demand and interest. The new Hertz is going to lead the way as a mobility company, starting with the largest EV rental fleet in North America and a commitment to grow our EV fleet and provide the best rental and recharging experience for leisure and business customers around the world’.

Tesla delivered just over 241,000 electric cars globally in the third quarter, so order represents approximately 10% of their annual production, which may bring its own problems due to the ongoing supply chain disruptions and the time required to ramp up production at the new factory in Texas.

However, it’s a nice headache for Elon Musk to have. Along with how he’s going to spend the extra USD36bn he is now worth after Tesla stock jumped over 12.5% after the order was announced, making it a trillion-dollar company. He also vested a fresh tranche of options in his Moonshot pay package for good measure. According to the Bloomberg Billionaires Index it's the biggest one-day gain in its history.

Musk's net worth now stands at USD289bn, give or take the odd billion dollars.

Have a good day.