Tesla became a a multi-billion dollar company this week after the announcement of a major partnership with Hertz. The car rental company said so buy 100,000 Tesla Model 3 sedans by the end of 2022, and this sent Tesla stock price north of $ 1,000 per share. Two days later, Hertz revealed that Uber had offered to rent about half of these electric cars to his hail-riders. Hertz though wrote Tom Brady to upgrade his new ships.
But a week after Hertz announced the deal, Elon Musk said on Twitter that “no contract has been signed here.”
“Tesla needs more than production, which is why we only sell cars to Hertz at the same consumer price,” said Tesla CEO. “The Hertz alliance does not affect our economy.” It is unknown at this time what he will do after leaving the post. a very large system.
“Teslas shipping has already begun,” Lauren Luster, director of communications at Hertz, told Recode on Monday. “We see Teslas’ primary importance in our rental fleet, which reflects the importance of Tesla’s automotive market.”
Assuming everything goes as planned, this is good for Tesla, and it is going well for all EV companies. But some of the companies involved are making risky bets. Hertz is wasting money about $ 4.2 billion assuming that, when its Tesla lease becomes available next month, cars will be so expensive that its customers will pay higher prices for what the company says it will be “Premium is a different kind of rent.” Hertz says Tesla rental price will remain “the same”Depending on the cost and the price of the car, which varies depending on the destination and the date of your reservation. For more information, rent a Jaguar XF sedan, which saves money approx Similar to the new Tesla Model 3, LaGuardia Airport in New York costs more than $ 300 a day in the past. taxes and duties.
At the moment, Uber is offering drivers a small fee as well as discounts on other stations agree to pay $ 334 a week rent Tesla from Hertz. The hiking company thinks this new rental system could lay the foundation for a better future, an environmentally friendly business, even though the company has a mixed reputation when it comes to car rental for drivers.
To understand how these companies can reach the new Tesla lending market, we looked at mathematics. Hertz ‘partnership with Tesla is worth billions, while Uber could spend millions to attract drivers to rent EVs instead of cheap cars. Obviously, it will be the customers who decide whether the money will be paid to the companies involved.
Tesla is making more than just money
Tesla only makes a profit if these bets pay off. The cost of the contract is too high because Tesla pays sticker on all Models 3 – for now, Model 3 starts at $ 43,990 – although discounts on most orders are very common in car rental companies.
There’s more than just money on the table, too. Making Tesla cars available as rent and the rise of Uber will also reflect the company’s image to many potential customers. For example, Tesla well known does not have an advertising department, but is gaining a lot of attention in Hertz’s recent advertising campaign, which features Tom Brady surrounded by Model 3s.
Hertz bets billions in the future green
More is coming up in this Hertz commercial. The car rental giant donated money to bankruptcy last year the plague halted the tourist activity, and it just started coming back two companies investing bought a large stake in the company in March. Now it looks like Hertz is hoping that the electric car rental pivot could give the century-old company a second life. Instead, Hertz plans to establish a dedicated portal renting EVs, and it is said that more than 20 percent of its ships will be electric by the end of next year.
This calculation assumes that Tesla will deliver the promised cars on time, which will not happen. The company has done missed production goals in the past and still walking on shortage of semiconductor worldwide, which has wreaked havoc on automobile production.
Potential customers may not want to pay to rent Tesla, especially since then car rental rates are still high than it was before the plague. Once again, Tesla’s unique operating system may be enough to reimburse customers. Most people have never had the opportunity to drive an electric car, so renting can give them the opportunity to do this without having to spend a lot of money. more than $ 40,000 on the Model 3.
Uber business is changing gears
While Hertz is selling its Teslas as a valuable commodity, Uber rental cars will be available on all high-end units, including the excellent UberX service. While Uber drivers with Teslas will also be worthy to register their vehicles on the top Uber Comfort Ride platform and Uber Green operating system, there will be no dedicated way for an Uber customer to book a ride in Tesla.
The success of the new Uber and Hertz partnership apparently depends on whether it will convince drivers to sign up for a rental program. Uber drivers can already rent other vehicles through an existing partnership with Hertz, which advertises weekly rental price $ 214 per week, excluding fees. While renting Tesla may be very expensive, Uber has promised that the price will drop from $ 334 a week to $ 299 and possibly even lower. Uber also gives Tesla drivers an extra dollar on the trip (up to $ 4,000 a year), and any Uber driver with an electric car can deduct it from the EVgo power station.
“It is clear that EVs and self-driving vehicles are the future of the automotive industry, as well as [Uber wants] having a front seat in their great movement, “says Gad Allon, a jobs, knowledge, and decisions professor at Wharton. “This collaboration enables them to start and see the future of their model.”
However, this system of things has its limitations. Less than 10 percent of Uber drivers currently rent their cars, so the Hertz contract does not apply to most drivers. The company also has a track record of providing drivers with cars. In 2017, Uber Close its Xchange Leasing business, which provides vehicles for low-income drivers; the program was lost a lot of money. Xchange Leasing was also criticized drivers who have violent financial contracts. Some believe that Uber’s recent lease agreement will also leave drivers deteriorating.
“Whether they are renting Teslas or Toyotas, the drivers whose Uber traps and car rental systems will still be subject to permanent debt,” a spokesman for Gig Workers Rising, a support group, told Recode.
But even if Hertz and Uber make money on their betting, Tesla will still be the most celebrated company. Hertz said Wednesday that if the Uber deal goes well, the company could expand the program to more than 150,000 vehicles. for the next three years, which would require Hertz to purchase at least 50,000 Models 3. This, of course, is good news for Tesla.
Update, November 2, 11:30 am: The article was changed to include Monday’s tweet from Tesla CEO Elon Musk, noting that the Hertz-Tesla agreement has not been signed, as well as a revised statement from Hertz.