Car rental company Hertz plans to increase its fleet amid a surge in travel demand, and will be purchasing up to 175,000 electric vehicles from General Motors.
GM has agreed to supply Hertz with some of its flagship EVs including the Chevy Bolt and the Bolt EUV beginning in the first quarter of 2023 through to 2028. Hertz will then begin purchasing GM’s upcoming EV models that use the Ultium battery technology, such as the Blazer and the Equinox.
GM is the latest automaker to sign a supply deal with the car rental company, which is in the midst of updating its fleet to encompass more EVs. Hertz, which recently emerged from pandemic-induced bankruptcy less than 12 months ago, already signed previous supply deals with Tesla and Volvo-backed Polestar. In the past, investors have not taken too kindly to major automakers signing such supply deals with rental car companies, since the vehicles are usually sold at discounted prices in an effort to liquidate inventory and boost overall deliveries.
But, this time around, shareholders have responded to the Hertz and GM deal positively, with shares of both companies only suffering a modest decline on Tuesday due to a broader market slump. Hertz plans to increase the proportion of EVs in its fleet to at least 25% before the end of 2024, while GM plans to stop selling combustion engines by 2035.
Information for this briefing was found via Hertz. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.