It wasn't that long ago rental car company Hertz went bankrupt. It also wasn't that long ago Hertz hired NFL superstar quarterback Tom Brady to promote the fact it had placed an order for 100,000 Teslas to rent to customers across the globe. Now, it's back to making a profit.
Hertz's Tesla order was big news---not only because it had to do with Tesla, but also because Brady was involved, and it seemed Hertz was doomed not long before it happened.
According to Tesla CEO Elon Musk, Hertz had to order its Teslas just like any other customer, it didn't get a fleet discount and it had to wait in line. The rental car company is still gradually taking delivery of that long list of Teslas. Meanwhile, it's renting the Teslas it has received in locations all over the map, and they're seemingly popular. Even people who may have no interest in buying an EV might rent a Tesla to try it.
Since ramping up its EV offerings, Hertz has enjoyed a 12% increase in annual profits. While you may be thinking this spike in revenue is due to the fact EVs are growing in popularity and causing Hertz's rentals to skyrocket, that's not the whole story.
Hertz is having much more rental success than it was not long ago, and business is way up compared to pandemic levels, but the real kicker comes from the cost savings.
Following the third quarter of 2022, Hertz CEO Stephen Scherr announced yet another EV deal, this time with GM for 175,000 electric cars. The company also noted it made a whopping $2.5 billion in revenue during the third quarter, ahead of those new EVs coming in.
Scherr shared during the earnings call: “We focused on operational excellence and fleet optimization to produce financial results that facilitated investment in our strategic priorities, like electrification, while enhancing returns to our shareholders and being in the service of our customers."
Hertz calculated its EVs are between 50% and 60% cheaper to maintain than gasoline-powered cars. In addition, the cars don't need to be maintained or repaired as often, which means more time in service.
Hertz also recently announced a third EV partnership. It's purchasing 65,000 EVs from Polestar. Between Tesla, GM and Polestar, Hertz aims to have nearly 350,000 electric cars in its fleet. It should see even more monumental results as the new EVs start to trickle in.
Abby Andrews