That's only if you consider this a one time thing. Those 100K vehicles are going to need replacement in a few years. And considering, Hertz's stock price increase, investors are clearly believing this is a great deal for them. Which raises the question about where all their competitors will be buying their EVs. There are millions of rental vehicles. Close to 2M in the US alone.
The reasons Hertz is considered to be getting a great deal here by investors is that EVs retain their value a lot better and are known to have much lower maintenance overhead. So, they'll get more miles out of them before they have to sell them on, get back more when they do, and be able to charge a premium for them at the same time. In a market where margins are razor thin, that's a big deal.
It's more a question of when than if their competitors will be lining up to buy some EVs. They'll have to. And then of course the next question is which one they'd be buying. The answer for the next few years is that Tesla is one of the few companies that has both product and manufacturing ready for volume production. Of course a few other manufacturers might make some nice money here too.
So, investors are thinking that Tesla could end up supplying many hundreds of thousands of vehicles for rental per year in the next few years. On top of their other business, which is also continuing to grow at a very nice pace. They'll likely need a few new factories for this but they've shown they can deliver those as well.
This isn't just a very profitable deal for Tesla, it is a strong indicator towards that electric cars are really around to stay and that the electric car market is growing quickly. If it is more profitable for Hertz to buy Teslas than other brand cars, it should be for most car rentals and probably also most other customers.
Not too long ago Elon talked about Tesla making up to 20 million cars per year in 2030. That would make Tesla twice as large as VW, the currently largest car manufacturer. Of course this statement was treated as Elons typical optimism, but deals like this pave the way to that actually coming true.
I think this is profitable, but my post was about that the profit goes far beyond the money earned in this contract. Perhaps I shouldn't have used double negation :)
> Of course this statement was treated as Elons typical optimism, but deals like this pave the way to that actually coming true.
I feel people have really short memory wrt. Elon's optimism. Not everything he promises pans out (autopilot being the prime example), but usually, it does, just slightly later than promised.
Right, though it currently looks that autopilot is about to work out, if you look at the FSD beta releases (check the videos on YouTube). And the Hertz order points to the possibility of the 20M cars/year being not to far off both in volume as in time frame.
Check all the months. Tesla usually delivered them all in the same month/quarter as far as I'm aware.
It leads to a misleading number if not averaged over the other months.
> Normally, Tesla would deliver only a handful of cars during the first 2 months of a quarter and then deliver an incredible amount of cars during the last month a quarter.
I think people are doing the math on car TCO finally.
If nothing goes wrong, the first two-three years are practically free for an EV. Home charging costs pennies and if you're really stingy you can use free public chargers.
Then you might need a new set of tires maybe a quick maintenance at the dealership and you're good for a few years again.
A family friend just got an increase from their electricity provider to 0.44€/kWh due to increased costs of gas and coal. Assuming 18kW/100km (including charging losses) that's 8€/100km. Not very far from gas prices at the moment.
With Electricity prices topping $0.30/kWh in many places, this is no longer true...
Unless you also have solar panels at home and want to have the hassles of making sure your EV only charges on sunny days, you're going to be paying rates for electricity close to rates for dinosaur-fuel, especially if you're comparing to a modern 60 mpg gas car.
But even at those electricity prices, the cost per mile is still cheaper than with an ICE car. And fuel prices are going to raise further with higher carbon taxing.
60mpg (us) is 72mpg (uk), or 4l/100km. A Vauxhall Corsa may claim that[0], but I've got one at the moment as a rental and don't get anywhere near that, more like 45-50mpg (uk) - so about 40mpg (us).
That's 56mpg (American gallons are smaller). It's also a claimed number, real numbers tend to be about 70% of that, which would make it about 40mpg (US).
The reasons Hertz is considered to be getting a great deal here by investors is that EVs retain their value a lot better and are known to have much lower maintenance overhead. So, they'll get more miles out of them before they have to sell them on, get back more when they do, and be able to charge a premium for them at the same time. In a market where margins are razor thin, that's a big deal.
It's more a question of when than if their competitors will be lining up to buy some EVs. They'll have to. And then of course the next question is which one they'd be buying. The answer for the next few years is that Tesla is one of the few companies that has both product and manufacturing ready for volume production. Of course a few other manufacturers might make some nice money here too.
So, investors are thinking that Tesla could end up supplying many hundreds of thousands of vehicles for rental per year in the next few years. On top of their other business, which is also continuing to grow at a very nice pace. They'll likely need a few new factories for this but they've shown they can deliver those as well.