GM to sell 175,000 EVs to Hertz over 5 years

Rental car company Hertz Global Holdings plans to order up to 175,000 General Motors electric vehicles over the next five years, the latest move by the rental car firm to add zero-emission models.

Hertz and GM on Tuesday announced a joint agreement in which the rental car firm will order Chevrolet, Buick, GMC, Cadillac and BrightDrop EVs through 2027. Hertz expects to begin taking delivery of Chevrolet Bolt EVs and Bolt EUVs in early 2023.

The multi-billion dollar, multi-year deal could be the first of many GM agreements to supply EVs to rental car companies, said Steve Carlisle, the automaker's North American operations chief, on a conference call.

"It's an enormous first step," Carlisle said, adding that GM is in talks about similar deals with other rental car companies.

GM CEO Mary Barra said in a statement the automaker's work "with Hertz is a huge step forward for emissions reduction and EV adoption that will help create thousands of new EV customers for GM."

Hertz current goal is for one-quarter of its fleet to be electric by the end of 2024. In April, Hertz said it would buy up to 65,000 EVs over five years from Swedish EV maker Polestar and in October 2021 Hertz its intent to purchase 100,000 electric cars from Tesla, primarily the EV maker’s Model 3.

The GM deal "spans a wide range of vehicle categories and price points — from compact and midsize SUVs to pickups, luxury vehicles," the companies said.

Automakers have cut reliance on low-profit, bulk sales to rental car agencies as supply chain problems curtailed production. Carlisle said GM expects to deliver electric vehicles to Hertz at close to retail profit margins.

GM aims to have capacity to build 1 million EVs annually in North America by 2025. Carlisle said the sales to Hertz fits within that previously announced goal.

Such deals would ease pressure on GM to hit EV sales targets through individual customer sales, a market dominated by Tesla Inc.

GM expects Hertz to deploy many of its EVs in Los Angeles and San Francisco, helping to meet California electric vehicle quotas. Hertz Senior Vice President Jeff Nieman said the company plans to offer EVs across its network, with priority to Los Angeles, San Francisco, Miami and Orlando.

Hertz estimated its customers could travel more than 8 billion miles in these EVs and save about 3.5 million tons of carbon dioxide-equivalent emissions versus gasoline-powered vehicles.

Hertz CEO Stephen Scherr said the deal "will dramatically expand our EV offering to Hertz customers, including leisure and business travelers, rideshare drivers and corporates."

Barra said she believes "each rental experience will further increase purchase consideration for our products and drive growth for our company."