As Tesla moves HQ to Austin, it lands $4 billion order from Hertz

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Excerpts:

"Rental car company Hertz placed an order for 100,000 Tesla vehicles to be delivered by the end of 2022 — the biggest order for electric vehicles ever placed by a rental car company.  The rental company is purchasing Tesla Model 3 sedans, the company's midsize four-door car.

The deal from Hertz was estimated to be worth $4.2 billion, and it sent Tesla's share price climbing. Tesla shares closed Monday up $115.18, or 12.6 %, to end the day at $1,024.86. Reuters news service estimated that Tesla surpassed $1 trillion in market capitalization on Monday. 

Dan Ives, an analyst with Wedbush Securities said the Hertz deal is a "watershed moment" for Tesla and the electric vehicle industry at large.

"The magnitude and scale of the largest EV deal ever placed is a feather in the cap for Musk & Co. and ultimately would not be possible without the Austin Giga capacity coming online in 2022," Ives said. 

More: Tesla moving HQ from California to Austin: 'A huge feather in the cap' for region

Tesla produced just under 510,000 vehicles in 2020, and has been ramping up its supply in 2021. Earlier this month the company said it produced 241,300 electric vehicles in its third quarter of 2021. 

Electric vehicles are being increasingly adopted by consumers, and big name auto companies including Ford and General Motors are increasingly making their own electric vehicles. Once it Tesla order is filled, Hertz estimates that electric vehicles will make up more than 20% of its global fleet. 

The rental company plans to offer Tesla Model 3s for rent at airport and neighborhood locations in major markets and certain European cities beginning in early November. The deal comes a year after Hertz filed bankruptcy in May 2020, and as a national rental car shortage begins to ease. 

Hertz said customers who rent a Tesla Model 3 will have access to 3,000 Tesla supercharging stations throughout the U.S. and Europe.

"Electric vehicles are now mainstream, and we've only just begun to see rising global demand and interest," said Hertz interim CEO Mark Fields.

More: Tesla still not giving many details about HQ move to Austin

Tesla's latest big win comes just more than two weeks after CEO Elon Musk announced that the company will relocate its corporate headquarters to Austin. To this point, few details have been given as to when the move will occur, how many employees might move to Texas or how many jobs would be created. 

Tesla is also getting close to opening its $1.1 billion Central Texas manufacturing facility where it's expected to start rolling out vehicles before the end of the year. Musk said in July 2020 that he had picked a site in southeast Travis County where the company would produce its Cybertruck, Semi, Model 3 company sedan, Model Y and batteries. 

The Austin facility is expected to help greatly expand the carmaker's production capacity.  Ives said the Austin and Berlin manufacturing facilities will be key to ramp global supply for Tesla, as EV demand outstrips its supply by about 30k units a year, a problem only amplified by supply chain and chip shortages. As the Austin and Berlin facilities open in the coming months, Tesla's capacity could expand to about 2 million units annually over the next 18 months, Ives said.

Ives also predicted that the scale and scope of the Tesla facility in Austin will allow the company to further expand margins and help alleviate the supply chain bottlenecks."

Source: https://www.msn.com/en-us/autos/news/as-tesla-moves-hq-to-austin-it-lands-244-billion-order-from-hertz/ar-AAPWxxb?ocid=uxbndlbing

 

Edited October 26, 2021 by RV_