Hertz leans on Polestar to speed up EV adoption

The news: Hertz announced a partnership with Swedish EV manufacturer Polestar for 65,000 EVs over five years, with the first units arriving in spring of 2022, per MarketWatch.

Why it’s worth watching: Hertz announced a monumental shift to EVs in November and tapped Tesla to provide 100,000 Model 3s to transition its global fleet.

  • The Tesla deal, which represented a $4.2 billion revenue for the EV maker, hit a speed bump when Elon Musk tweeted that the deal was not finalized.
  • Tesla officials were reportedly surprised by how quickly Hertz expected EV orders to be fulfilled and estimated delivering 10,000 units a year to Hertz.
  • Tesla reported an all-time delivery record of 310,000 EVs for Q1 2022, despite multiple safety recalls.
  • Availability of Polestar rental cars starts in Spring 2022 in Europe and late 2022 in North America and Australia.
  • "By working with EV industry leaders like Polestar, we can help accelerate the adoption of electrification while providing renters, corporate customers, and ride-share partners a premium EV product, exceptional experience, and lower carbon footprint,” said Stephen Scherr, Hertz CEO.

What the deal means for Hertz: The leading vehicle rental company can diversify its EV fleet with Polestar 2 vehicles, reducing reliance on Tesla and leaving the door open for other manufacturers to seek partnerships with the rental company. 

The ride-share aspect of Hertz’s service, in which it leases vehicles to Uber and Lyft drivers, could speed up EV adoption by easing drivers’ concerns about rising gas prices as well as the initial expense of investing in EVs. 

What the deal means for Polestar: The agreement is a substantial win and vote of confidence for Polestar’s vehicles. Polestar expects production volumes to reach 290,000 vehicles per year by the end of 2025.

The opportunity: Hertz leaning on Polestar, and possibly other EV makers, to complete its electrified fleet can improve EV adoption in the mainstream market. Hertz provides customers with vehicles from Chevrolet, Toyota, Nissan, Chrysler, Ford, and Jeep in its rental fleets and could secure deals with those carmakers as soon as EV options are made widely available.