Hertz and Tesla stocks traded up this morning after Hertz announced its plans to purchase 100,000 Tesla vehicles as the rental car giant looks to build out its electric vehicle (EV) car rental fleet, according to a buysider and sellsider.
The deal is estimated to total roughly USD 4.2bn in revenue, with completion targeted for the end of 2022, according to press reports.
Hertz will also add its own charging stations throughout its location network. Customers who rent a Model 3 sedan will have access to the Tesla charging network, according to a press release.
Beginning early November, Tesla Model 3 sedans will be available at Hertz airport and neighborhood locations in major US markets and select European cities.
The announcement did not specify whether all 100,000 cars will be Model 3s, one of Tesla’s most popular sedans.
“Electric vehicles are now mainstream, and we’ve only just begun to see rising global demand and interest,” said Hertz interim CEO Mark Fields. “The new Hertz is going to lead the way as a mobility company, starting with the largest EV rental fleet in North America and a commitment to grow our EV fleet and provide the best rental and recharging experience for leisure and business customers around the world.”
Hertz’s equity topped at USD 28.07 per share before settling at USD 26.40 per share and a USD 12.446bn market cap, up 6.93% from Friday’s close.
Tesla’s equity hit a USD 1trn market cap before settling today at USD 972.48 per share and a USD 974.612bn market cap, up 6.9% from Friday’s close.
Hertz, which filed for bankruptcy early in the pandemic, emerged on 30 June. The deal with Tesla comes just four months after Hertz emerged from bankruptcy, amidst a remarkable rebound for the rental car industry. Investment firms Knighthead Capital Management and Certares Management took over Hertz earlier this year.
Hertz’s USD 1.3bn Libor+ 350bps term loan due 2028 is quoted at 100/100.5 today, according to a trader.
Tesla’s USD 137m 2% convertible notes due 2025 traded at 1395.228 on 20 October, up from 1271.583 at the end of September, according to MarketAxess.