Hertz buys 65,000 electric cars from Polestar

New York
CNN Business

Swedish electric car maker Polestar will sell up to 65,000 electric cars to Hertz over the next five years, the two companies announced Monday.

The move comes on the heels of Hertz’s order for 100,000 electric cars from Tesla in October 2021.

Polestar CEO Thomas Ingenlath previously told Automotive News Europe that the extended target for 2022 is to sell 65,000 cars. Polestar sold 29,000 cars in 2021, which is an 185% increase over 2020, according to sales figures the company released in January.

Hertz plans to order the compact Polestar 2, one of two EVs currently on the market. The model includes an Android Automotive infotainment system that includes built-in Google apps, and has an estimated range of 270 miles on a single charge, according to the company. Polestar has announced plans to increase its two-car lineup with a mid-size SUV, compact SUV and sports sedan by 2024, as well as the Polestar O2, an electric roadster concept car.

“Partnering with a global leader like Hertz will bring the amazing experience of electric vehicle driving to a wider audience, meeting a variety of short and long-term mobility requirements of our mutual customers,” Ingenlath said in a joint press release. Monday. “For many of them this may be their first time driving an electric car, and it will be polar.”

Polestar spun off from Volvo in 2017 and has now established itself as an independent electric car brand, although it “enjoys specific technological and engineering synergies with Volvo Cars and benefits from significant economies of scale as a result,” according to the company. The company is still jointly owned by Volvo and parent company Geely, a holding group focused on the auto industry that recently released plans to go public in a deal expected to close by mid-2022.

EV made headlines after its Super Bowl ad apparently swung into Elon Musk’s Tesla and SpaceX projects with a promise: “Not to conquer Mars.”

The Polestar cars will be available first to Hertz renters in Europe starting this spring, and will begin rolling out in North America and Australia in late 2022.

The agreement with Hertz will be an aid in Polestar’s efforts to establish itself as a Tesla alternative for those interested in electric cars. Tesla had the best-selling electric vehicle worldwide with nearly 1 million electric sales last year.

Polestar competes with pure electric car makers like Lucid, as well as well-known automakers like Ford (F), General Motors, Volkswagen (VLKAF), and Nissan (NSANF) that sell EVs in either the US or Europe, if not both markets.

Sales of Polestar to Hertz will also help introduce electric vehicles to a wider audience. In the past, automakers looking to break into a new market made an effort to sell their cars to rental car companies as a way to introduce their cars to a wider range of customers, essentially giving them a chance on an extended test drive.

Sales are also helping Hertz, which has been struggling with all the other car rental companies to find new cars to buy for its fleets. Car rental companies sold a large percentage of their fleets in the summer of 2020, when the pandemic brought air travel almost to a standstill. Car rental companies needed to sell cars in order to raise cash and because in many cases they had nowhere to park the cars they had. Hertz has filed for bankruptcy during this time period.

But once travel started picking up, automakers discovered they didn’t have the computer chips they needed to build all the cars for which there was demand. So they focused on selling cars to retail customers, who usually pay more for cars than those companies like rental car companies that pay less than retail customers.

Car rental companies have not been able to purchase the cars they need to renew their fleets, which has left some customers unable to rent the cars they need, especially in some holiday markets. Car rental companies have had to buy used cars for the first time to supplement their fleets, and hold on to cars that have longer than usual.

The shortage of rental cars has also led to an increase in car rental prices. While the Consumer Price Index, the main measure of government inflation, shows car rental prices have fallen somewhat since last summer, they are still 38% higher compared to February of 2020, before the pandemic began to affect travel in the United States. .

There may be some problems for those who rent electric cars from Hertz or any other company, even if they are a fan of electric cars.

While an electric vehicle owner may be able to charge the vehicle in their home overnight, this option may not be available to someone who is traveling and in a hotel. And while public charging stations may be less expensive to use than filling a car with gas, especially with gas now over $4 a gallon in most parts of the country, charging an EV can take a lot more than it takes to fill gas. tank.

CNN Business’s Chris Isidore contributed to this report