2024 Chevrolet Blazer SS EV
General Motors has agreed to sell up to 175,000 electric vehicles to Hertz Global over the next five years, the companies announced Tuesday.
The deal calls for GM to start supplying electric vehicles such as the Chevrolet Bolt EV and Bolt EUV to the rental car giant starting in the first quarter of next year. Those vehicles are expected to be followed by newer EV models with the company’s Ultium battery technology, such as the Chevrolet Blazer, Chevrolet Equinox and vehicles from other GM brands.
GM is expected to significantly increase its production of all-electric vehicles in the coming years, as production of cars and trucks in North America increases, as well as the battery cells used to power them. The company plans to reach a production capacity of 1 million electric vehicles in North America and China each by 2025.
GM is the latest automaker to strike such a deal with Hertz after Tesla and Polestar, a Volvo-backed electric vehicle startup. Those deals were for 100,000 and 65,000 vehicles, respectively, making GM’s deal the largest of the three.
“Our work with Hertz is a major step forward for emissions reduction and electric vehicle adoption that will help create thousands of new electric vehicle customers for GM,” CEO Mary Barra said in a statement.
Hertz has made increasing its fleet of electric vehicles a priority after emerging from bankruptcy less than a year ago. The debt-ridden company was one of the first victims of the coronavirus pandemic, but has since bounced back amid rising demand in travel and supply chain issues. The problems have resulted in lower inventories but higher profits for rental car fleets.
GM and Hertz shares were not affected by the announcement. Both were down Tuesday midday amid a broader market decline.
Investors have traditionally frowned on automakers when they sell large numbers of vehicles to daily rental fleets. This is because cars and trucks sold to rental companies are usually sold at a discount, and these deals are used to reduce inflated inventories and increase total vehicle deliveries.
However, shareholders and analysts have responded favorably to automakers like Tesla selling electric vehicles to Hertz, seeing the move as a sign that battery electric cars are going mainstream.
Hertz aims to have a quarter of its fleet electric by the end of 2024, while GM has announced plans to exclusively offer electric vehicles by 2035.