Hertz will buy 100,000 Teslas, marking a big bet on electric vehicles in rental cars

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A sign hangs above a Hertz rental car office on Aug. 4, 2020, in Chicago. The company said it’s buying 100,000 Teslas in a bold move to diversify into electric vehicles.

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But electric vehicle sales are increasingly rapidly. And there is growing pressure from companies and governments to accelerate the switch away from gas and diesel, in order to reduce the impact on human-caused climate change.

Meanwhile, Hertz also notes that battery-powered cars have lower maintenance and operating costs.

«Electric vehicles are now mainstream, and we’ve only just begun to see rising global demand and interest,» Hertz interim CEO Mark Fields said in a statement.

Hertz has hired Tom Brady, winner of seven Super Bowls, to promote the availability of Teslas in ads.

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A Tesla Model 3 is seen during the 19th Shanghai International Automobile Industry Exhibition in Shanghai, China, on April 19. Hertz said it was hiring quarterback Tom Brady to promote the Tesla Model 3s it’s buying to diversify the rental car company’s fleet.

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Owner Of A Broken Hertz

Hertz went through bankruptcy last year, as high levels of debt collided with a drop in demand triggered by the pandemic. But after emerging from bankruptcy, it’s been on stronger financial footing — including a big boost from selling off part of its rental fleet while used car prices have been sky-high.

However, a global shortage of semiconductors has cut sharply into new vehicle production, which has made it challenging for all rental car companies to buy new vehicles to update their fleet.

Tesla, while still affected by the shortage, has done a better job than many of its rivals at managing the supply chain challenges. In fact, Tesla has increased its production, setting new records for itself, every quarter so far this year.