Tesla rentals are likely to become more popular and dramatically easier to find when Hertz takes delivery of 100,000 Model 3 vehicles. Tesla is, of course, wildly popular in the news but the vehicles remain out of reach for many drivers. As a rental, even at a rate, the opportunity to test drive a Model 3 for a day or over the weekend could be quite tempting.
Tesla always had a plan to manufacture low-cost electric vehicles. Starting with the original Roadster sports car, then the Model S luxury sedan, and the Model X utility vehicle, Tesla used those profits to pay for producing the first Model 3. This was planned to sell for $35,000, and it did for a short time. The pandemic and parts shortages led to price increases and the Model 3 now starts at over $40,000. To make matters worse, Tesla sured the 200,000 vehicle threshold and orders no longer qualify for the $7,500 federal tax credit.
Hertz recently EV charging infrastructure worldwide. Currently, Hertz's inventory of Model 3 vehicles is quite limited and hard to book. With the addition of 100,000 more Model 3s, availability should improve considerably, even though it may still be an expensive rental. Bloomberg reports that this is a $4.2 billion investment by Hertz.
Hertz Model 3 Deliveries May Take Time
Hertz is buying 100,000 Tesla Model 3s, possibly at the retail price if Bloomberg's sources are correct, which is a bit surprising since such a massive order usually benefits from large discounts. Another possibility is that Hertz is including a significant number of long-range and performance Model 3s in the order. It could also mean that Tesla is providing some assistance with the charging infrastructure that Hertz mentioned in its press release or including a service agreement. Whichever the case, Hertz is making a large investment and this will likely be reflected in the rental prices.
According to Bloomberg, the order is equivalent to around one-tenth of the total number of vehicles that Tesla can currently produce in a year. Due to this, an order of 100,000 will likely take some time to fill given that customer orders will still be delivered throughout the year. While Hertz mentioned that a portion of its new Model 3 fleet will arrive as early as November, availability will probably remain tight for the near future. By the end of 2022, however, renting a Tesla Model 3 from Hertz should finally become much easier.