Rental car company Hertz plans to order up to 175,000 General Motors Co electric vehicles over the next five years, its latest move toward zero-emission models.
The multi-billion dollar, multi-year deal could be the first of many GM agreements to supply electric vehicles to rental car companies, said Steve Carlisle, the automaker's North American operations chief, on a conference call to media outlet, Reuters.
Automakers have cut reliance on low-profit, bulk sales to rental car agencies as supply chain problems curtailed production. Carlisle said GM expects to deliver electric vehicles to Hertz at close to retail profit margins.
GM aims to have capacity to build 1 million EVs annually in North America by 2025. Carlisle said the sales to Hertz fits within that previously announced goal.
Hertz's current goal is for one-quarter of its fleet to be electric by the end of 2024. In April, Hertz said it would buy up to 65,000 electric vehicles over five years from EV maker Polestar, a joint venture between China's Geely and its Swedish Volvo unit. In October 2021, Hertz announced plans to purchase 100,000 Tesla electric cars, primarily the Model 3.
The first GM electric vehicles to ship to Hertz will be Chevrolet Bolt models starting early next year, Carlisle said.
GM expects Hertz to deploy many of its EVs in Los Angeles and San Francisco, helping to meet California electric vehicle quotas. Hertz Senior Vice President Jeff Nieman said the company plans to offer EVs across its network, with priority to Los Angeles, San Francisco, Miami and Orlando.