Hertz to buy 100K Tesla EVs, sending car company’s value over $1T

Rental car company Hertz announced Monday it will buy 100,000 electric vehicles from Tesla by the end of 2022. The company also said it will make “a significant investment” in “new EV charging infrastructure across the company’s global operations”. Hertz’ interim CEO said that Teslas are already arriving at the company’s sites and should be available for rental starting in November.

“Electric vehicles are now mainstream, and we’ve only just begun to see rising global demand and interest,” Mark Fields said in a press release. “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.”

The purchase reflects signs the rental care company is bouncing back, just a year after Hertz filed for bankruptcy.

The Hertz announcement caused the value of Tesla to spike Monday. The carmaker’s market value topped $1 trillion for the first time, putting it in an elite group with companies like Microsoft and Apple. The value jump appeared to surprise even Tesla CEO Elon Musk.

“Strange that moved valuation, as Tesla is very much a production ramp problem, not a demand problem,” Musk said in a tweet thread.

He later added, “to be clear, cars sold to Hertz have no discount. Same price as to consumers”. At about $40,000 apiece for each Model 3, that puts Hertz’s purchase at around $4 billion.

The Hertz purchase also did a lot for the Tesla CEO’s personal net worth, adding $36 billion to it. Musk is now worth $289 billion. That’s more than Bill Gates and Mark Zuckerberg combined. It’s also nearly $100 billion more than the second richest man in the world, Jeff Bezos.

The purchase comes just a week after a Morgan Stanley analyst said Musk was on his way to becoming the world’s first trillionaire. However, the analyst said it would be Musk’s passion project SpaceX that would get Musk there, saying it is “challenging any preconceived notion of what was possible and the time frame possible”