Hertz plans to order up to 175,000 EVs from GM over the next five years! Wayne Gerdes – CleanMPG – Sept. 20, 2022 2023 Chevrolet Bolt EUV A $6,300 reduction in MSRP but is the average renter ready to pay $300 to $400/week to rent a compact after the economy has settled? Hertz and GM announced a plan in which Hertz will order up to 175,000 GM EVs over the next five years. The purchase will be the largest expansion of EVs among fleet customers in history. The agreement will encompass EV deliveries through 2027 as Hertz increases the EV component of its fleet and GM accelerates production of EVs broadly. Over this period, Hertz estimates that its customers could travel more than 8 billion miles in these EVs, saving approximately 3.5 million metric tons of CO2 compared to similar gasoline-powered vehicles traveling such a distance. Hertz is investing to create the largest rental fleet of EVs in North America, with tens of thousands of EVs available for rent at 500 Hertz locations across 38 states. The company’s current goal is for one-quarter of its fleet to be electric by the end of 2024. Hertz expects to begin taking delivery of Chevrolet Bolt EVs and Bolt EUVs in the first quarter of next year. GM deliveries to Hertz are projected to increase as GM rapidly scales its EV production between 2023 and 2025, driven by the opening of Ultium Cells battery cell plants in Ohio, Tennessee, and Michigan. GM plans annual production capacity of 1 million EVs in North America by 2025. 2023 Chevrolet Bolt EUV Detail Infographic I drive by the new Ultium plant on I65 in Springhill, TN a few times a week and there is no denying this new facility’s expansion. The possible problem with Hertz’s purchase direction is profit. They are not purchasing the fuel, they are buying the vehicles, maintaining the vehicles, and selling the vehicles. The upfront pricing is going to be steep unless GM provides a huge fleet discount for that volume, and the rental company’s maintenance should be minimal. Upselling the EVs rental pricing to cover the huge upfront outlay and the large resale hit is not going to be a hit for Hertz’s bottom line when all is said and done. This will be interesting to see going forward from my perspective. Fingers crossed GM and Hertz can keep the upfront and rental costs down far enough to entice renters to go for it.