Key points:
- Hertz rallied over 8% on new EV supply deal with Swedish manufacturer Polestar
- The company will supply 65,000 EVs over the next 5 years, expanding on Hertz's Tesla deal
- The deal is an important milestone in the company's pledge to have the largest EV fleet in NA
Hertz (NASDAQ: HTZ) stock jumped over 8% in early Monday trading, on the news the rental company has signed an agreement with EV manufacturer Polestar – a leading Swedish name planning on going public later this year via a SPAC. The deal will provide rental group Hertz with 65,000 EVs over the next five years. The deal follows a similar deal that involved Tesla supplying around 100,000 models last year as the rental company seeks to maximize options for changing consumer demand.
Hertz doesn’t seem to be sparing any cash on its EV endeavor, and it isn’t cheap. Should the company pay full price for the basic-level Polestar models, the total cost is standing around $3.2B. Arguably, it’s an unavoidable cost. Consumer demand is changing and the EV market is exploding. Rental companies will have to adapt their fleets to match demand, and as today has outlined, it will likely be a costly expenditure.
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It’s been an incredible growth story for Hertz, which filed for bankruptcy during the pandemic and is now pledging the largest electric rental fleet in North America. HTZ stock shows a 1500% increase from this time last year. Today’s Polestar order represents double the Swedish company’s total orders for 2021. The first sales are expected in Europe this Spring, with US and Australia fleets to follow later in the year.
Hertz CEO Stephen Scherr commented:
“By working with EV industry leaders like Polestar, we can help accelerate the adoption of electrification while providing renters, corporate customers, and rideshare partners a premium EV product, exceptional experience, and lower carbon footprint”
HTZ stock is currently trading at a solid gain of 8.7% as investors react well to the company’s bold EV mission. Rental companies will be forced to adapt to the new energy wave before missing out on market share, which will generally be tailored towards the growing EV market.
