Hertz agrees to buy 65,000 electric vehicles from Polestar

The rental-car industry, which has long been a major wholesale buyer of new models in the car business, is increasing efforts to add more battery-powered vehicles to the fleet.

The addition of EVs enables rental-car companies to embrace green technologies and cut their greenhouse-gas emissions, but it also comes with challenges. Electric vehicles are generally more expensive, creating higher upfront costs for rental car companies and potentially raising prices for renters. Additionally, the lack of a public charging network could prove difficult for leisure travelers and hurt the customer experience.

Hertz expects the Polestar vehicles to be available in Europe starting this spring, and in North America and Australia later this year. Hertz will initially order the EV maker’s main production model, the Polestar 2, which is marketed as a competitor to Tesla Inc.’s Model 3.

Polestar, owned by Chinese carmaker Zhejiang Geely Holding Group Company, focuses on high-performance electric cars. Zhejiang Jelly is controlled by its billionaire chairman and founder, Li Shufu. It owns Geely Automobile Holdings Ltd., Volvo Car Group and other electric-vehicle brands. Polestar said it produced 29,000 vehicles in 2021.

In October, Hertz placed a 100,000-vehicle order from electric-car pioneer Tesla. At the time, Hertz stated that the order would increase the mix of electric cars to 20% of its total fleet. Tesla chief executive Elon Musk later cast doubt on the deal, writing on Twitter that a contract has yet to be signed. Hertz confirmed that the order has been placed in response to a tweet from Musk, which said that some deliveries of Tesla Model 3s have already begun.

The rental car company has undergone a restructuring since it filed for bankruptcy in May 2020, as the falling value of its used car fleet led to a debt crunch. It became a meme stock, fueled by an army of individual traders, and trading bounced back faster than expected as the pandemic changed Americans’ habits.

Demand for rental cars soared during the pandemic as many consumers avoided planes and public transport and moved for remote work. When a group of investment firms acquired Hertz last June, shareholders received $8 per share — almost unheard of in bankruptcy, which usually wipes out shareholders.

Hertz went public again in November and has a market value of about $9 billion, three times what it was before the pandemic hit. In February, Hertz appointed Stephen Scher, a former executive of Goldman Sachs Group Inc., as its next chief executive.

This story has been published without modification to the text from a wire agency feed