Swedish electric car maker Polestar has signed a deal worth around €3 billion.
The agreement sees the rental company buying battery models for use in Europe, the US and Australia, giving more motorists the opportunity to drive electric cars, which remain more expensive than petrol alternatives.
Though neither company is keen on the deal, the entry-level Polestar 2 starts at $49,000, for a total order value of about $3.2 billion if Hertz pays full price for base models.
The Hertz deal is similar to an agreement Tesla made with the rental company last October to provide 100,000 models and comes as Hertz is looking to increase the number of battery models in its fleet.
Hertz averaged almost 500,000 vehicles in its fleet last year. The rental company, which filed for bankruptcy during the pandemic due to a slump in demand, has pledged to offer the largest electric rental fleet in North America and “one of the largest in the world.”
The order number represents double Polestar’s total sales last year, which was 29,000. The carmaker, which is supported by Volvo and China’s Geely, is currently producing its battery models at a plant in Chengdu, China, and is increasing deliveries.
Electric vehicle sales are rising worldwide as automakers push new electric models to meet emissions targets and consumers embrace the new technology.
In Europe, sales of electric cars overtook diesel last year, while in Norway more than 80 percent of new cars sold are battery-powered.
Dealers and industry executives say test drives are key to convincing motorists, giving them the opportunity to experience the quiet driving and instant acceleration of electric vehicles.
Polestar CEO Thomas Ingenlath said the agreement with Hertz will “bring the amazing experience of driving an electric car to a wider audience”.
The first Polestar sales will come this spring for European fleets and later in the year for the US and Australia.
“By working with EV industry leaders like Polestar, we can help accelerate electrification adoption while providing renters, corporate customers and ridesharing partners with a premium EV product, exceptional experience and reduced carbon footprint,” said Hertz -CEO Stephen Scherr.
Last year’s Tesla-Hertz deal boosted the automaker’s stock price, helping it surpass $1 trillion for the first time, though the stock has since fallen.
Polestar plans to take its shares public later this year through a merger with Gores Guggenheim, a special purpose acquisition company.