Car rental company Hertz has signed a billion-dollar deal with carmaker Polestar for 65,000 electric cars. Both parties announced this on Monday.
The exact amount involved in the deal has not been disclosed – but the Financial Times calculated based on the price of Polestar cars that it is in any case in the billions.
Over the next five years, the American Hertz will purchase the cars, which will mainly be found on the European, American and Australian rental market. The agreements with Polestar come on top of an earlier deal with Tesla at the end of last year to purchase 100,000 electric cars in the coming period.
The two deals are a result of Hertz’s attempt to electrify its fleet of cars. The company currently owns about 500,000 cars, mostly equipped with a fuel engine. Now that electric driving is becoming more common and the number of charging stations is growing, Hertz intends to increasingly offer this type of car to customers looking for a rental car.
The deal with Hertz is also important for Polestar, a spin-off of Volvo and the Chinese Volvo owner Geely. In 2021, it sold a total of about 29,000 cars – about half of what it will now deliver to Hertz.
The first cars to be delivered by Hertz are intended for the European market. The integration of the electric car is currently most advanced on that continent.
Billion Dollar Investment
The deal also shows how strikingly Hertz has risen from the ashes after it filed for bankruptcy during the corona crisis. It was one of the first major victims of the pandemic, partly because of its heavy debt burden. But two private equity funds, Knighthead and Certares, saved the company with a multi-billion dollar investment. Subsequently, the rental car market unexpectedly quickly returned to its former level, after travelers were eager to go on holiday in 2021. Hertz can currently charge very good prices for rental cars, the company is in good shape.
Hertz’s previous deal with Tesla sparked a lot of attention because the news caused Tesla to be worth more than a trillion dollars for a while. The company’s stock market value has since plummeted again. Polestar, which manufactures its cars in China, plans to go public in the near future, in a merger with an empty stock shell.
A version of this article also appeared in NRC on the morning of April 5, 2022