(In the September 20 story, Hertz corrected its estimate in the last paragraph to 1.8 million tons from 3.5 million)
Written by David Shepardson and Joseph White
(Reuters) – Hertz Global Holdings (OTC: car rental) plans to order up to 175,000 electric vehicles from General Motors (NYSE: NYSE) over the next five years, its latest step toward zero-emissions models.
The multi-billion-dollar, multi-year deal may be the first of many GM agreements to supply electric vehicles to rental car companies, Steve Carlisle, the company’s chief of North American operations, said on a conference call.
“It’s a massive first step,” Carlisle said, adding that GM is in talks about similar deals with other car rental companies.
Shares of General Motors fell more than 5% Tuesday afternoon after rival Ford Motor Company (NYSE:) warned late Monday that supply chain costs were $1 billion higher than expected in the third quarter. Ford shares fell more than 11%.
Automakers have reduced reliance on low-profit wholesale sales to rental car agencies as supply chain problems curtail production. Carlisle said GM expects to deliver electric vehicles to Hertz close to retail profit margins.
“Each rental experience will increase buying consideration for our products and drive growth for our company,” General Motors CEO Mary Barra said in a statement.
General Motors aims to have the ability to build 1 million electric vehicles annually in North America by 2025. Carlisle said sales for Hertz fit in with the previously announced goal.
Deals like these will ease pressure on General Motors to meet its electric vehicle sales goals through individual customer sales, a market dominated by Tesla (NASDAQ: Inc.).
Hertz’s current goal is to have a quarter of its fleet electrified by the end of 2024. In April, Hertz said it would buy up to 65,000 electric vehicles over five years from electric vehicle maker Polestar, a joint venture between China’s Geely and the Swedish tech giant. Volvo unit. In October 2021, Hertz announced its plans to purchase 100,000 Tesla electric vehicles, in particular the Model 3.
The two companies said GM’s deal “covers a wide range of vehicle classes and price points – from compact and mid-size SUVs to pickups and luxury cars.”
Carlisle said the first GM vehicles shipped to Hertz will be Chevrolet Bolt models starting early next year.
GM expects Hertz to deploy several of its electric vehicles in Los Angeles and San Francisco, helping to meet the electric vehicle quotas in California. Jeff Neiman, Hertz’s senior vice president, said the company plans to offer electric vehicles across its network, with priority given to Los Angeles, San Francisco, Miami and Orlando.
Hertz estimated that customers could travel more than 8 billion miles in these electric vehicles and save about 1.8 million tons of CO2-equivalent emissions versus gasoline-powered vehicles.