Shares of Tesla popped more than 4 percent Monday morning after car-rental company Hertz announced a deal to buy 100,000 of Elon Musk’s electric cars in an overhaul of its rental fleet.
The order is part of the embattled rental-car company’s push to “offer the largest EV rental fleet in North America and one of the largest in the world.”
It described the purchased of 100,000 Teslas as an “initial order” that will be delivered by the end of 2022.
“Electric vehicles are now mainstream, and we’ve only just begun to see rising global demand and interest,” said Hertz interim CEO Mark Fields, who led Ford from 2014 to 2017 and was appointed Hertz’s CEO earlier this month.
“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 and provide the best rental and recharging experience for leisure and business customers around the world.”
It’s the largest bulk purchase of electric vehicles ever, according to Bloomberg, which first reported the news, and will give Tesla $4.2 billion of revenue.
Shares of the Musk-helmed company started trading at $950.53 per share, near an all-time high as the electric car manufacturer nears a $1 trillion valuation.
Customers will be able to rent Tesla’s Model 3 sedans at Hertz locations in major US markets and parts of Europe starting in early November, the company said.
It’s the first big announcement for Hertz since it emerged from bankruptcy in June under new owners, Knighthead Capital Management and Certares Management.
“While Hertz is in the early stages of electrifying its rental car fleet, Tesla getting an order of this magnitude highlights the broader EV adoption underway in our opinion as part of this oncoming green tidal wave now hitting the US,” Dan Ives, managing director at Wedbush Securities, said in a note.
“This Hertz deal is a “major feather in the cap” for Tesla and speaks to where demand is heading in the EV transformation hitting the auto sector globally.”
In addition to the purchase of Tesla cars, Hertz said it will also build out new EV charging stations across the company’s global locations.
A lack of charging infrastructure for electric cars in parts of the world has been a major obstacle for Tesla. Hertz’s commitment to expand access could open new markets for Tesla and improve adoption.
The company also unveiled a new marketing push featuring NFL legend Tom Brady.
“Hertz is changing the game when it comes to the future of mobility and has come through for me time and time again,” Brady said.
“I’ve been driving an EV for years and knowing Hertz is leading the way with their electric fleet speaks to how the world is changing and the way companies are approaching being environmentally and socially conscious.”