Tesla Has Scored a Record Order From Hertz for 100,000 EVs

Bringing Tesla within inches of a trillion dollar market cap.
Brad Bergan
A Tesla Model S in front of a dealership.NNehring / iStock

Tesla's EVs are beginning to go mainstream.

Tesla came closer to a $1 trillion market cap when it received its biggest-ever order of 100,000 EV rental cars for Hertz on Monday, according to an initial report from Reuters.

EV rentals will be available in November, and you don't even have to recharge them upon return.

Hertz's giant Tesla order consists primarily of Model 3s

Tesla shares had jumped nearly 9.0% by Monday afternoon, to $990, a new record high, after the order. Shares soared in the wake of the order from Hertz, combined with further news that the Model 3 had become the first EV to rise to the top of the monthly sales charts in Europe. The Hertz news came while Tesla faced a massive backlog of uncompleted orders for its vehicles, in addition to ongoing supply chain disruptions, but Monday's growth helps establish electric cars as a viable market alternative to vehicles powered by fossil fuel and conventional combustion engines.

Mark Fields, the interim chief of Hertz said the Tesla order will consist primarily of Model 3 EVs, according to the Reuters report. Hertz customers will have the option to rent Tesla vehicles this November, with 3,000 chargers spread across 65 markets by the end of 2022, added Fields in the report. An astounding 4,000 chargers through 100 markets will be available by the end of 2023. "We absolutely believe that this is going to be [a] competitive advantage for us," said Fields, of the initial order slated for delivery by the end of 2022. "We want to be a leader in mobility... Getting customers experience[d] with electrified vehicles is an absolute priority for us."

'EVs are going mainstream'

All Hertz customers are required to refuel gasoline-powered vehicles upon return (or pay an additional fee), but customers who rent a Tesla won't have to charge them before bringing them back, said Fields. Tesla will have to reach a market cap of $995.75 to achieve the trillion-dollar status, and, if or when it does, Elon Musk's all-electric automaker will join the ranks of Amazon, Microsoft, Alphabet, and Apple. In other words, Tesla is about to officially become part of what we mean when we say "Big Tech." As the most valuable automaker in the world, Tesla delivered a record-breaking 241,300 EVs in the third quarter of 2021, despite heavy supply chain issues that have increased pressure from the industry.

Tesla's least pricey vehicle, the Model 3 sedan, goes for roughly $44,000, which this sale worth roughly $4.4 billion, assuming the entire Hertz order was for the mass-market sedan. But with the new order, Hertz aims for EVs to comprise more than 20% of its global fleet, citing the rising number of EVs put up for sale, in addition to surging consumer appeal of the all-electric vehicles. "We want to be out there early and fast and take a leadership position," said Fields in the report. Wedbush, a major wealth management, brokerage, and advisory firm, said to investors that "Tesla getting an order of this magnitude highlights the broader EV adoption underway in our opinion as part of this oncoming green tidal wave now hitting the U.S.", according to the report. "If [the order] puts an exclamation point under guidance for 50%+ growth in deliveries," said Craig Irwin, an analyst from Roth Capital in the Reuters report, it becomes yet another "solid piece of evidence EVs are going mainstream."

At times it seems Tesla is immune to market trends, even amid the world-historical ebb and flow of a global pandemic, semiconductor chip supply shortages, and mounting tensions between geopolitical superpowers. But as one of the first firms to venture into the all-electric vehicle market, boom or bust, Elon Musk's Tesla is rapidly becoming one of the major financial juggernauts of the forthcoming industrial revolution.

Disclaimer: Some members of the IE team, including editors of this article, have personally invested in a number of cryptocurrency and stock markets, including Tesla. However, their private investment viewpoints have no impact on editorial content.

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