General Motors is teaming up with Hertz to expand the number of electric vehicles available on the rental car company’s platform. GM announced it will sell 175,000 EVs to Hertz over the next five years, a deal that the companies are calling the largest of its kind yet.
The new EVs will come from all of GM’s brands, including Chevrolet, GMC, Cadillac, Buick, and BrightDrop, the automaker’s commercial vehicle division. The announcement follows a similar move by Hertz to purchase 100,000 vehicles from Tesla and 65,000 EVs from Polestar.
The first vehicles, a batch of Chevy Bolt EV and Bolt EUVs, will be delivered to Hertz beginning in the first quarter of 2023, GM said. Vehicle deliveries will continue until 2027, at which point Hertz estimates that its customers could travel more than 8 billion miles in these EVs, “saving approximately 1.8 million metric tons of carbon dioxide equivalent emissions compared to similar gasoline-powered vehicles traveling such a distance.”
Neither company disclosed the financial terms of the deal, and given the disparity in pricing for GM’s models — the Chevy Bolt EV starts at under $30,000 while the GMC Hummer EV sells for over $108,000 — it would be difficult to estimate the exact amount.
Hertz reported having around 500,000 vehicles in its global fleet last year. The rental car company escaped bankruptcy last year after the pandemic, when an unsustainable amount of debt nearly devastated its business. Hertz now plans to electrify nearly all of its cars and vans, with the GM, Tesla, and Polestar orders comprising a significant first chunk. The company’s current goal is for one-quarter of its fleet to be electric by the end of 2024.
Many of Hertz’s Teslas are being used by rideshare workers driving for Uber. Through its partnership with the rental car company, Uber said it aims to have 50,000 Tesla vehicles on its platform by 2023.
GM says that rental cars will help drive more mass adoption of plug-in vehicles. One of the major barriers to mass adoption of electric vehicles is cost, with the average EV price hitting an all-time high earlier this summer of $66,000. Rental cars, especially for business travelers and ride-sharing, could help convince more customers to make the switch to electric.
As more electric models arrive, GM is trying to position itself as the lone automaker with a particular focus on driving mass market adoption. The company has resisted the urge to raise prices on its lowest-priced EVs, the Chevy Bolt and Bolt EUV, even while other EVs have become more expensive. In fact, the company has decided to keep its discounted price for the Bolts through the end of the year. Late next year, the Chevy Equinox EV will arrive with an attractive starting price of $30,000, and GM said it will have a whole slate of affordable EVs later in the decade as a result of its partnership with Honda.
Whether GM makes good on its promise will depend on a variety of external factors, some of which the company has very little control over. With persistent supply chain problems and low inventory, most automakers have little choice but to raise their EV prices. The demand for battery materials remains a major issue, as does the time, energy, and resources it takes to bring new manufacturing facilities online.