Hertz To Acquire 65,000 Polestar Electric Vehicles Over Five Years

Hertz is ramping up its push to have a mostly electric rental car fleet with the proposed acquisition of 65,000 electric vehicles from Polestar, seen as a worthy competitor to Tesla.

In an announcement on 4 March, Hertz revealed that the purchase will consist mainly of the sporty Polestar 2 sedan and will be carried out over a five-year period. Availability is slated to begin in the spring in Europe and later this year in North America and Australia.

The Polestar deal follows a similar purchase agreement signed last year with Tesla when Hertz ordered 100,000 Tesla Model 3s, expected to be delivered late in 2022. The company is anticipating renting out 50,000 of those cars to Uber to support its network.

In March, Hertz also added Tesla’s mid-size SUV Model Y to its electric vehicle fleet, according to the car rental firm’s website.

“So, we are starting a great relationship with Tesla. We are also ready to partner with many other manufacturers to extend our lead in the adoptions of electric vehicles,” former Hertz interim CEO Mark Fields had said on Yahoo Finance Live in November.

“Today’s partnership with Polestar further builds on our ambition to become a leading participant in the modern mobility ecosystem and doing so as an environmentally forward company. By working with EV industry leaders like Polestar, we can help accelerate the adoption of electrification while providing renters, corporate customers and rideshare partners a premium EV product, exceptional experience and lower carbon footprint,” Hertz CEO Stephen Scherr said.

The Hertz partnership “will bring the amazing experience of driving an electric car to a wider audience, satisfying a broad variety of our mutual customers’ short- and longer-term mobility requirements,” Polestar CEO Thomas Ingenlath said in a statement.

Polestar, which was founded by China’s Geely and Volvo Cars, is set to merge with special purpose acquisition company (SPAC) Gores Guggenheim Inc this year. The firm is expected to debut on public markets in 2Q22.

The EV focus by Hertz will be crucial to keeping investors engaged in its turnaround story under new CEO Scherr, who started on 28 February after spending decades at Goldman Sachs in top executive positions.

Hertz returned to public markets in early November last year following a much-publicized bankruptcy, after raising US$1.3 billion in an initial public offering (IPO) that valued the company at US$13.7 billion. Hertz sold 44.52 million shares at US$29 each. It had expected to sell 37.1 million shares in a range of US$25 to US$29, per its prospectus.

Shares are currently trading around US$21, giving it a market cap of more than US$9 billion.