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Tesla receives massive Model 3 order from car-rental giant Hertz

Tesla’s market value increased beyond $1 trillion on Monday after Hertz announced “an initial order” of 100,000 vehicles from the automaker.

Hertz has ordered the Tesla Model 3, which starts at around $40,000 and is the automaker’s best-priced vehicle among its current range of electric vehicles (EVs).

The deal means that from early November, and subject to availability, Hertz customers will be able to rent a Tesla Model 3 at Hertz airport and neighborhood locations across the U.S. and select cities in Europe. The company is yet to reveal rental terms for the vehicle.

Hertz said it will offer “a premium and differentiated rental experience” for customers renting one of its Tesla EVs. This will include, for example, digitized guidance to educate customers about the Model 3 “to get them on their way quickly,” and a streamlined EV rental booking process via Hertz’s mobile app.

The rental giant is also installing thousands of chargers throughout its network, with customers renting a Model 3 also able to use 3,000 Tesla Supercharger stations throughout the U.S. and Europe.

Hertz said it plans to have all 100,000 Tesla Model 3 sedans available by the end of 2022, at which point EVs will make up 20% of its global fleet.

But the company cautioned that its ambitions could be impacted by issues such as semiconductor chip shortages or other factors, a complication that has already affected vehicle production at Tesla and other automakers around the world.

Responding to the deal, Tesla CEO Elon Musk said that Hertz was paying full price for the vehicles, tweeting: “To be clear, cars sold to Hertz have no discount. Same price as to consumers.”

After seeing Tesla’s market value break the $1 trillion barrier, Musk followed up with: “Wild $T1mes!”

Hertz CEO Mark Fields commented in a release: “Electric vehicles are now mainstream, and we’ve only just begun to see rising global demand and interest.”

Fields added: “The new Hertz is going to lead the way as a mobility company, starting with the largest EV rental fleet in North America and a commitment to grow our EV fleet and provide the best rental and recharging experience for leisure and business customers around the world.”

The order is a big win for Tesla as it seeks to cement its position as a leader in the electric-car industry. It could also lead to more drivers trying out EVs for the first time and potentially lead to more sales for the company. For Hertz, the deal is a bold statement of intent regarding a gradual transition to EVs by a company that has only recently emerged from bankruptcy.

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