Hertz Global Holdings Inc (NASDAQ: HTZ), which operates a fleet of rental cars, has decided to take the next step toward zero-emission vehicles by placing an order for as many as 175,000 electric cars manufactured by General Motors Company (GM.N) over the next five years.
During a conference call, Steve Carlisle, the chief of the automaker’s North American business, said that the multi-billion dollar and multi-year partnership might be the first of many deals between GM and rental car firms to supply electric vehicles.
Carlisle described the agreement as “an enormous first step,” He said that GM is currently discussing similar partnerships with other rental car firms.
Hertz Global Holdings Inc Supplier
More than 5% of GM’s stock was lost. The competitor Ford Motor Company issued a warning late Monday that their supply chain expenses were $1 billion higher than planned in the third quarter. This warning was made public Tuesday afternoon. The stock price of Ford fell by more than 11%.
As a result of disruptions in the supply chain, automobile manufacturers have reduced their reliance on high-volume, low-profit sales to rental car agencies. Carlisle stated that General Motors anticipates that it will be able to offer Hertz Global Holdings Inc electric vehicles at prices near retail profit margins.
According to the Chief Executive Officer of GM, Mary Barra, “each rental experience will further raise purchase consideration for our goods and drive growth for our company.”
By the year 2025, General Motors plans to have the capacity to produce one million electric vehicles yearly in the North American market. According to Carlisle, the sales to Hertz are within the parameters of the aim that was previously announced.
Such arrangements would reduce the pressure that General Motors is under to meet its EV sales targets through sales to individual customers. This market is now dominated by Tesla Inc. (TSLA.O).
The current objective of Hertz Global Holdings Inc is to convert one-fourth of its fleet to electric vehicles by the end of 2024. Hertz announced in April that it planned to purchase up to 65,000 electric cars from Polestar over the next five years. This electric vehicle manufacturer is a joint venture between China’s Geely and its Swedish Volvo unit. Hertz announced in October 2021 that it intended to purchase 100,000 electric automobiles manufactured by Tesla, notably the Model 3.
According to statements made by both parties, the scope of the GM agreement “spans a wide variety of vehicle categories and price points,” including “compact and midsize SUVs, pickups, and premium vehicles.”
According to Carlisle, the first GM electric vehicles to be shipped to Hertz will be variants of the Chevrolet Bolt beginning early next year.
GM anticipates that Hertz will deploy many of its electric vehicles in Los Angeles and San Francisco, contributing to the state of California meet its quota for electric cars. Jeff Nieman, Senior Vice President of Hertz Global Holdings Inc, stated that the business intends to offer electric vehicles (EVs) across its entire network, prioritizing the cities of Los Angeles, San Francisco, Miami, and Orlando.
Compared to gasoline-powered vehicles, Hertz Global Holdings Inc predicted that customers could travel more than 8 billion miles in these electric vehicles and save around 3.5 million tonnes of carbon dioxide emissions.
Image: DepositPhotos © Evgenyatamanenko
Author Valerie Remorosa 
