Tesla’s new deal with Hertz and Uber looks like a blockbuster

Tesla becomes Trillion-dollar company this week After announcing a large-scale deal with Hertz.Car rental company said it would Purchase 100,000 Tesla Model 3 sedans By the end of 2022, this will allow Tesla’s The stock price exceeds $1,000 per share. Two days later, Hertz revealed that Uber had committed to lease As many as half of electric cars Give it to its ride-hailing driver.Herzlian Recruit Tom Brady Promote its new fleet.

But a week after Hertz announced the deal, Elon Musk said On twitter “The contract hasn’t been signed yet.”

“Tesla’s demand is far greater than production, so we will only sell cars to Hertz at the same profit margin as consumers,” Tesla’s CEO added. “The Hertz transaction has zero economic impact on us.” It is not clear why Musk is fighting back at this point, but it is worth noting that the Hertz transaction represents Tesla’s The largest order ever.

“Tesla deliveries have already begun,” Hertz communications director Lauren Luster told Recode on Monday. “We see very strong demand for Tesla in our rental fleet in the early days, which reflects the market’s demand for Tesla vehicles.”

Assuming everything goes according to plan, these developments are clearly beneficial to Tesla and bodes well for the entire electric vehicle industry. But other related companies are making riskier bets.Hertz cost Estimated $4.2 billion Assuming that when Tesla’s rental service becomes available next month, these cars will be so popular that customers will pay higher fees for what the company says “High-quality and differentiated rental experience.” hertz It has been stated that the cost of renting a Tesla will be “similar“The price of its high-end and luxury cars varies according to the pick-up location and the booking date. For reference, renting a Jaguar XF sedan will cost you approximately Same as the new Tesla Model 3, the price at LaGuardia Airport in New York was as high as $300 the day before Taxes.

At the same time, Uber provides drivers with small subsidies and discounts at certain charging stations if they Agree to pay $334 per week Rent a Tesla from Hertz. The car-hailing company believes that this new leasing method can lay the foundation for a more environmentally conscious business model in the future, even though the company has a mixed record of renting cars to drivers.

To understand how these companies will enter the new Tesla rental market, we look at the math. Hertz’s deal with Tesla is worth billions of dollars, and Uber may spend millions of dollars to attract drivers to rent electric cars instead of cheaper ones. Of course, it is up to the customer to decide whether these investments will bring returns to their respective companies.

Tesla makes more than money

Tesla can only make a profit if these bets are paid off.The price of this transaction is particularly high because Tesla is charging List price On all Model 3-currently, Model 3 Starting at $43,990 — Although the discount for bulk orders is Car rental industry.

There is not only money on the table. Tesla vehicles are widely used for leasing and Uber rides, and will also introduce the company’s brand to more potential customers.For example, Tesla Famous without a marketing department, But it has attracted a lot of attention in Hertz’s latest advertising campaign, which shows that Tom Brady is surrounded by Model 3s.

Hertz is betting billions of dollars on a greener future

Hertz’s deal is more.After the car rental giant filed for bankruptcy last year The pandemic marginalizes tourism, It only starts to rebound Two investment companies A majority stake in the company was acquired in March. It now appears that Hertz hopes that the switch to electric car rental may bring this century-old company a second life.In fact, Hertz plans to launch a Dedicated portal Electric car rental, and said that by the end of next year, more than 20% of its fleet will be electric.

This calculation assumes that Tesla will deliver the promised vehicle on time, which may not happen.Company owned Did not meet the production target In the past and still navigating Global semiconductor shortage, Which has destroyed the automobile manufacturing industry.

Potential customers may not want to pay a premium to rent a Tesla, especially because Car rental prices are still high Compared with before the pandemic. Again, the freshness of driving a Tesla is enough to attract customers. Many people simply don’t have the opportunity to drive an electric car, so the rental experience can provide them with an opportunity to get started without having to spend more Model 3 more than $40,000.

Uber’s business model is changing

Although Hertz markets Tesla as a premium product, the vehicles it leases to Uber will be suitable for all levels of rides, including budget-friendly Uber services.And Uber drivers using Tesla will also qualified To list their vehicles on the platform’s high-end Uber Comfort Ride and the environmentally-focused Uber Green service level, Uber customers will have no special way to book Tesla’s itinerary.

The success of Uber’s new deal with Hertz obviously depends on whether it can persuade drivers to sign a lease plan.Uber drivers can already rent other cars through the existing partnership with Hertz Basic weekly rent rate $214 per week, excluding fees. Although renting a Tesla will be more expensive, Uber promises that the cost will eventually drop from the current $334 per week to $299, or even lower. Uber also provides Tesla drivers with additional dollars per trip (up to $4,000 per year), and any Uber driver who owns an electric car can get a discount at the EVgo electric car charging station.

“It is clear that electric vehicles and self-driving cars are the future of the automotive industry, and [Uber wants] There are opportunities for their impact on large-scale mobility,” Gad Allon said. Operation, information and decision Professor of Wharton School of Business. “This collaboration allows them to start and envision the future of their model.”

Nevertheless, this plan has its limitations. Currently, less than 10% of Uber drivers rent cars, so the Hertz transaction will not affect the vast majority of drivers. The company’s history is also very sketchy when it comes to providing cars to drivers. In 2017, Uber Turn off Its Xchange Leasing business provides vehicles for drivers who cannot find other financing; the program is being lost Too much money. Xchange Leasing has also been criticized as Use abusive financial agreements to restrain driversSome people believe that Uber’s latest rental partnership will also make drivers’ situation worse.

A spokesperson for the advocacy organization Gig Workers Rising told Recode: “Whether they rent a Tesla or Toyota, Uber’s drivers trapped by the car rental program will still be trapped in an endless cycle of debt.”

But even if Hertz and Uber fulfilled their bets, Tesla will still be the most celebrated company. Hertz said on Wednesday that if the cooperation with Uber is successful, the company may expand the program to include 150,000 vehicles. The next three years, Which will require Hertz to purchase at least 50,000 Model 3s. Of course, this is good news for Tesla.

Update, 11:30 AM, November 2nd: This story has been updated to include a Monday tweet by Tesla CEO Elon Musk, noting that Hertz’s contract with Tesla has not yet been signed, and Hertz’s updated statement.

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