20% Of Hertz Rental Cars Will Be Teslas In A Year

Rental car prices have in many cases become the biggest expense of a trip. Rental companies offloaded vehicle inventories during the pandemic, and didn’t place orders. The market for cars is tight. And travel has picked back up. So there’s more people looking for cars than there are cars. Prices are sky high.

Hertz went through bankruptcy. And now they’re refreshing their fleet with…100,000 Teslas. Wow.

The Hertz fleet was down from 535,000 cars in 2019 to 424,000 cars in 2020. So this order of small Model 3s, which is already starting to arrive and will complete “by the end of 2022” will bring them back close to pre-pandemic levels of cars, if they also replace cars that leave the fleet in the meantime.

These are not $100,000 Teslas, these are $40,000 Teslas. At this volume, Hertz isn’t paying retail, but it’s being talked about as though it were a $4 billion order.

There are (2) main challenges, it seems to me.

  1. Charging though many hotels are now offering electric car chargers. Hertz plans to install “its own electric vehicle charging network” of 3000 chargers by the end of 2022 and 4000 by the end of 2023 but that covers 65 of its U.S. locations. Want to use a Tesla charging station? That’s going to be an extra fee.

  2. It takes a bit to get used to driving a Tesla – honestly not very long, you can do it in 15 minutes, but Hertz employees just aren’t going to be doing test drives with customers.

Hertz isn’t saying anything about the price point they’ll be renting these vehicles at, or what car class they’ll be, but as ubiquitous as they’ll be in the fleet they won’t be a true specialty vehicle.

Here in Austin the number of Teslas on the road has skyrocketed, and not even because the company is moving its headquarters here. Many of the cars still have their California license plates.

The major hurdle to electric vehicles is how long they take to charge for full.

Tesla’s innovation has been its battery. A major order from a major rental car player goes a long way towards acceptance, and to many more people test driving these cars, but greater technological advances will be necessary before they replace gas.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. I imagine Hertz will install charging stations and accept them below fully charged at their rental Kiosks. As long as they don’t gouge on the recharging fee like they do with the refilling fee, that would make them strictly more convenient for anyone planning to drive less than the ~200+ mile charge that the Tesla’s hold. I imagine that’s a decent size of the customer base in a lot of city locations.

  2. This might work for local rentals staying in one location, but I can’t see renting these for an extended road trip.

  3. You’re right–Hertz will not be doing test drives, but they did say this FWIW:

    “Hertz will offer a premium and differentiated rental experience for the Tesla EVs. This includes digitized guidance to educate customers about the electric vehicle to get them on their way quickly.”

    They also have a dedicated EV customer support team via the Hertz at or via SMS at 1-855-855-3717.

    More info here –> https://www.hertz.com/blog/electric-vehicles/tesla/model-3/faq/your-first-drive/

    As far as charging goes, Hertz said:

    “To celebrate the release of our Model 3 fleet, charging is included at Tesla network chargers for Model 3 rentals picked up before February 1, 2022.* Although free public charging stations exist, most stations charge a fee based on kWh usage, charging time or percentage of battery charged. Just as gas prices fluctuate, charging fees vary from station to station.”

    More info here –> https://www.hertz.com/blog/electric-vehicles/tesla/model-3/faq/charging-the-model-3/

  4. Hopefully, they will not be stripped of options. I have never understood why car companies sell stripped down cars to rental companies. It’s free advertising and a way to influence buying decisions. I’ve bought cars based on my experience with that model or the parent through rentals.

  5. Why would it be an extra charge to use a Tesla charging station? Wouldn’t that just be like filling up a rental car at any gas station? Or am I misunderstanding you?

  6. I would take this with a HUGE grain of salt. By the end of 2022? Really? More like 2023 at the earliest, unless Tesla is going to keep pissing off their individual buyers shifting delivery priority to Hertz. They’ve already pushed back Model 3 & Y delivery dates to customers by three months a few days ago.

    This looks to be just another great PR disaster for Tesla when they won’t be able to deliver on-time. But they already got rid of their entire PR department, so who cares as long as the stock price skyrockets, right?

  7. If my memory serves me right, I think Bloomberg put the word out this morning about Hertz car rental company suposedly making a huge purchase of Tesla cars very soon. I just double checked by performing a Google search. Yes, Bloomberg did put the word out today about Hertz and Tesla.

  8. Hertz announced it via a press release early this morning. Bloomberg and all the rest of the media outlets learned about it from there.

  9. Enterprise has had them for a while – I’m sure there are some procedures and learnings there but will be fun times at the Hertz lots getting used to them and handling roadside.

    I wonder what this means for restocking the Prestige fleet

    Either way fewer Impalas / Chrysler 300s is always welcome

  10. @Chase – Tesla is successful in spite of many of its customer-hostile policies. For example, all servicing is funded by sales. If Tesla is having a bad quarter, ran out of money this month, is having trouble meeting demand, w/e, you will not be getting your warrantied battery work done that month. It’s the same for their batteries, cars, and solar divisions.

    In fact, I strongly suspect that 3-mo delay is directly related to Hertz making a huge order. However, you seem to also be assuming that Tesla will have similar production levels next year as this year. History would suggest they will grow, and very significantly at that. I believe their Q3 numbers were up ~56% YoY.

    Betting against Tesla as a company is rarely a good idea (in fact, the only real failure so far has been their “self-driving” ambitions), but you’re right that being a Tesla customer is not a great experience. Being a shareholder is probably a much better experience.

  11. Electric cars are fee generating machines for rental car companies. With a liquid fuel vehicle, I can fuel up a few miles from the airport in under 5 minutes and return the tank full. There’s no way on most of my packed travel schedules that I’ll be able to arrange to get to a charger (if one is available) during those last few hours before returning the car. That convenience fee for recharging is a pure profit on each rental. Smart move by Hertz, but I’ll stay away, thank you.

  12. @FNT – There are very few options on the Model 3, and it’s really just motors and battery capacity. I’m guessing these will be single motor/standard range. The only other real option is FSD Autopilot, which I doubt they will have. They will still have basic Autopilot.

    @Gary – There are plenty of 250kw Superchargers around now, which charge very fast. I’m guessing they will have a way to bill you for usage through the rental contract since there is no option to pay at the charger as it’s automated and tied to your Tesla account.

    @Chase – Talk to the legion of $TSLAQ’ers about betting against the company. It hasn’t worked out well for them.

  13. Hard to predict the future but, right now, this seems more like a novelty than a practical transport solution when you’re travelling. I doubt I’d be a customer. I suspect Hertz will find out that most of their customers do not want Teslas.

  14. I won’t rent a Tesla either. On the trips that I rent vehicles, I do not have the time or want to spend my time dealing with finding a charger, etc. Forcing vehicles into the marketplace is not going improve EV vehicle acceptance. The infrastructure for charging just doesn’t exist yet. Not every state is like Southern California. This is big no for me renting from Hertz. A side note, we have decided that our next vehicle will be an EV. But day to day commuting is very different from a rental, where one can easily recharge at home. Renting a vehicle in an area where one doesn’t know where to charge, could be bridge to far to cross for most renters.

  15. Tesla’s in-car mapping system shows all the chargers and the car will guide you to them.

    As far as long trips go, we’ve taken two in ours this year, both from Seattle: one to Moab, Utah and return via California, and one to Cody, Wyoming. No problem finding chargers. It does take a bit longer but normally you do that in conjunction with a meal or pee stop.

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