Hertz Global Holdings Inc has said it plans to order up to 175,000 General Motors Co (NYSE:GM) electric vehicles (EVs) over the next five years, in the rental car company's latest move toward zero-emission models, Reuters reported.
The multi-billion dollar, multi-year deal could be the first of many GM agreements to supply EVs to rental car companies, said Steve Carlisle, GM's North American operations chief, on a conference call. Carlisle noted that GM is in talks about similar deals with other rental car companies, the newswire said.
Carlisle said GM expects to deliver electric vehicles to Hertz at close to retail profit margins.
GM aims to have the capacity to build 1 million EVs annually in North America by 2025. Carlisle said the sales to Hertz fits within that previously announced goal, Reuters noted.
Hertz's current goal is for one-quarter of its fleet to be electric by the end of 2024. In April, the rental car company said it would buy up to 65,000 EVs over five years from 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 deal "spans a wide range of vehicle categories and price points - from compact and midsize SUVs to pickups, luxury vehicles," Hertz and GM said in a joint statement on Tuesday. The first EVs to ship to Hertz will be Chevrolet Bolt models starting early next year, according to Carlisle, Reuters 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, Reuters said.
Hertz has estimated that its customers could travel more than 8 billion miles in these EVs and save about 3.5 million tonnes of carbon dioxide-equivalent emissions versus gasoline-powered vehicles.
GM shares fell more than 5% on Tuesday following a warning by rival Ford Motor (NYSE:F) Co late Monday that supply chain costs were $1 billion higher than expected in the third quarter.