The purchase is the biggest move into electric vehicles by a rental car company.
Tesla’s value skyrocketed to $1 trillion after car-rental giant Hertz purchased 100,000 Model 3s from the electric vehicle manufacturer.
The news of the sale increased Tesla shares by 12.6% after the biggest-ever rental car order for battery-powered vehicles. Hertz ordered the Tesla Model 3, a sedan that is the cheapest available vehicle by the electric carmaker.
The unprecedented deal is considered to be a major marketing push and a major comeback for the rental company after recently filing for bankruptcy.
“Both companies are going to benefit from this in ways that no one else has imagined,” said Ivan Drury, a senior manager at the automotive information company, Edmunds.
Mark Fields, the interim CEO of Hertz and former CEO of Ford 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.”
As concerns over pollution and climate change heighten worldwide, battery-powered vehicles have seen a major increase in demand as companies and governments mull transitioning to more eco-friendly alternatives to gas and diesel.
This is hoped to reduce the adverse impact of human-caused climate change.
Michelle Krebs, executive analyst at Cox Automotive, believes Hertz’s deal could actually accelerate the adoption of electric vehicles as it offers a glimpse into the technology to more people.
“It exposes more consumers to EVs [electric vehicles] and Tesla specifically,” she says. “We know there’s reluctance by people to buy EVs because they have range anxiety … and this is an opportunity for them to get experience with EVs and with Tesla specifically.”
Customers are more likely to buy electric cars once they’ve actually driven one, she said.
The Tesla Model 3 is currently listed at around $40,000 on the manufacturer’s website.
Hertz said its Teslas will be available for rent as soon as next month at airports in major US markets and in some European cities.
“The cars will first be available in USA and European markets and will reach the Gulf region in a later stage,” a source at Hertz told Doha News on Tuesday.