For Tesla, a recent order by Hertz, the rental car provider, offers several promising outcomes. Perhaps most visibly, the order for a whopping 100,000 cars put Tesla’s stock price over $1000 per share for the first time, enabling the firm to claim the status of being a trillion-dollar company. Furthermore, it reflects a sense that Tesla’s anticipation of a market shift, toward greater and greater adoption of electric vehicles (EVs), is being borne out in reality. In addition to making Tesla 3 models available to renters, Hertz noted that it would be adding charging stations to many of its locations, an investment that likely indicates its prediction that more vehicles will require charging in the future. Although some elements of the deal remain unknown, Tesla explicitly noted that it was not providing Hertz with a volume discount, as most car manufacturers do when making huge sales to car rental companies. In addition, consumer demand has largely focused on Tesla’s Model Y, so this call for more Model 3 vehicles may help Tesla balance out and rationalize its production facilities, which have famously struggled to achieve efficient output. For Hertz, even if it is not getting a discount on the 100,000 vehicles, the purchase appears to offer some benefit too, mostly notably in the form of a point of distinction. For drivers who either love their own EVs or are curious about testing one out before buying, Hertz now offers the only place they can rent one and thus perhaps the only service provider they will contact.
Source: Neal E. Boudette and Niraj Chokshi, “Tesla Value Tops $1 Trillion After Hertz Orders 100,000 Cars,” The New York Times, October 25, 2021