Automobile

Tesla-Hertz blockbuster deal paves way to take EVs mainstream

Hertz will have a competitive advantage, Fields said, as consumers look for options other than traditional internal-combustion vehicles. Even in a down U.S. auto market in the third quarter, sales of EVs jumped 60 percent and accounted for a record 1 out of every 10 sales, according to Cox Automotive. Nearly 40 percent of U.S. car buyers said they would consider an EV for their next vehicle purchase, according to a recent survey by the Pew Research Center.

“When a lot of consumers think electric vehicle, they think of Tesla, and now if they want to rent one, they’ll think of Hertz,” said David Whiston, automotive analyst for Morningstar Inc. in Chicago. “Eventually, there will be much more competition.”

Pool of buyers

Hertz picked an ideal time to get in the game, Whiston said, and EV-makers will benefit as well if renters turn into buyers down the road.

“It’s a great way for consumers to get that EV experience for a few days or a weekend trip or a vacation,” Whiston said. “For a lot of them, it will probably be a good experience, which could help them, if they were on the fence, to take the plunge.”

Tesla is in the midst of a vast production push as plants in California and China expand, while factories in Texas and Berlin set to open this year. Analysts say Tesla, which sold fewer than a half-million cars last year, could have the capacity to build 1.5 million EVs next year.

“EV demand continues to go through a structural shift,” Tesla told shareholders in its third quarter presentation Oct. 20. “We believe the more vehicles we have on the road, the more Tesla owners are able to spread the word about the benefits of EVs.”

Brady’s help

Until now, Tesla has relied on word-of-mouth and eschewed traditional advertising entirely. But a side benefit of this deal is the Hertz ad campaign where Model 3 rentals will be the focus of Brady’s message.

Two TV spots debuting today — entitled “Plugged In” and “Speed” — show the Tampa Bay Buccaneers quarterback renting, recharging and driving a Tesla from an airport. The tag-line for the commercials is Brady’s signature exhortation, “Let’s Go!”

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