GM to sell up to 175,000 electric vehicles to Hertz through 2027

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  • GM 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 requires GM to start supplying electric vehicles like the Chevrolet Bolt EV and Bolt EUV to the car rental giant starting early next year.
  • This follows similar agreements by Hertz with Tesla and Polestar to help build the rental company’s electric vehicle fleet.

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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.

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The deal requires GM to start supplying electric vehicles like the Chevrolet Bolt EV and Bolt EUV to the car rental giant starting in the first quarter of next year. These vehicles are expected to be followed by newer Ultium battery-powered electric vehicles such as the Chevrolet Blazer, Chevrolet Equinox and vehicles from other GM brands.

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, increase. The company plans to reach a production capacity of 1 million electric vehicles in North America and China by 2025.

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GM is the latest automaker to reach such an agreement with Hertz after Tesla and Polestar, a Volvo-backed electric vehicle start-up. These agreements 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 for reducing emissions and EV adoption and will help create thousands of new GM EV customers,” CEO Mary Barra. says in the statement.

Hertz has made expanding its electric vehicle fleet a priority after it emerged from bankruptcy less than a year ago. The indebted company was one of the first victims of the coronavirus pandemic but has since bounced back amid rising travel demand and supply chain problems. The problems resulted in a decrease in inventory, but an increase in the profits of rental car fleets.

The companies declined to disclose financial details of the deal. Steve Carlyle, president of GM North America, said the company plans to sell electric vehicles at a “retail markup” rather than at a discount.

“It’s good business,” Carlisle told reporters during a phone call.

The announcement was relatively unaffected by GM and Hertz shares. Both fell at noon on Tuesday amid broader market declines.

Investors have traditionally frowned upon automakers when they sell large numbers of cars for daily rentals. This is because cars and trucks sold to rental companies are usually discounted and such deals are used to reduce inventory bloat and increase overall vehicle shipments.

However, shareholders and analysts have responded positively to automakers like Tesla selling Hertz electric vehicles, seeing the move as a sign that battery-electric vehicles are becoming more popular.

Hertz plans to make a quarter of its fleet EVs by the end of 2024, while GM has announced plans to offer EVs only by 2035.

Credit: www.cnbc.com /

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