Hertz plans to purchase 100,000 Teslas for its fleet by the end of next year, the rental car company announced in a press release on Monday.
Market shares of both Hertz and Tesla shot up after the news broke, leading to Tesla becoming the first automaker to hit $1 trillion in market value.
Hertz said Monday that over 20% of its fleet will be electric vehicles at the end of 2022 following the planned purchase. Wall Street Journal reporter Tim Higgins told KCBS Radio's Jeff Bell and Margie Shafer that the Elon Musk-run company was Hertz's only option to ramp up its share of electric vehicles.
"There are a lot of electric vehicles out there, but really Tesla is the only one doing it at this huge scale," Higgins said. "Tesla, in a lot of ways, represents to many people what an electric car is, and if you’re going to experiment with an electric car, you'll probably choose a Tesla."
Higgins said this plan will open up new marketing opportunities for Tesla. By giving a renter the experience of driving an electric car, Tesla could reach a new audience, including those who haven’t previously considered purchasing an electric vehicle.
Travelers, however, could be anxious about driving long distances in an electric vehicle. Hertz said it will create its own network of charging stations, while also providing access to 3,000 Tesla supercharging stations in the U.S. and Europe.
But if electric vehicles are going to form a larger share of the Hertz fleet, let alone become widespread among all drivers, Higgins said he believes electric car batteries must be far more accessible than they are now.
"One of the challenges for Tesla and all electric car makers going forward is the price of battery, and decreasing the price of battery and increasing the range of those charges," Higgins, the author of "Power Play," a book about Musk and Tesla published earlier this year, said Monday.
"If the vehicles are going to become mainstream, those are the two areas that they need to combat," he added.
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