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 on Tuesday.
The deal calls on GM to start supplying electric vehicles such as the Chevrolet Bolt EV and Bolt EUV to the car rental giant from the first quarter of next year. Those vehicles are expected to be followed by newer EV models featuring the company’s Ultium battery technology, such as the Chevrolet Blazer, Chevrolet Equinox and other GM brand vehicles.
GM is expected to significantly increase production of all-electric vehicles in the coming years as North American production of cars and trucks — as well as the battery cells used to power them — increases. The company plans to reach a production capacity of 1 million EVs in North America and China by 2025.
GM is the latest automaker to sign such an agreement 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 huge step forward in emissions reduction and EV adoption that will help create thousands of new EV customers for GM,” CEO Mary Barra said in a statement.
Hertz has made expanding its fleet of electric vehicles a priority after going bankrupt less than a year ago. The debt-laden company was an early victim of the coronavirus pandemic, but has since recovered from rising travel demand and supply chain problems. The problems have led to lower inventories, but higher profits for fleets.
Shares of GM and Hertz were relatively unaffected by the announcement. Both fell amid a broader market decline on Tuesday afternoon.
Investors have traditionally viewed car manufacturers with disapproval when they sell large quantities of vehicles to daily rental fleets. That’s because cars and trucks sold to rental companies are usually sold at a discount, using such deals to reduce inflated inventories and increase their overall vehicle deliveries.
Shareholders and analysts, however, reacted positively to automakers like Tesla selling EVs to Hertz, seeing the move as a sign that battery-electric cars were becoming more mainstream.
Hertz aims to have a quarter of its fleet electric by the end of 2024, while GM has announced plans to offer only electric vehicles by 2035.
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