Hertz says it will purchase 65,000 electric vehicles from Polestar

Rental car company Hertz announced plans to purchase up to 65,000 electric vehicles from Polestar, a sub-brand of Volvo and its Chinese parent company Geely. The announcement follows a similar move by Hertz to purchase 100,000 Tesla vehicles in a bid to electrify its global fleet.

The new vehicles will be acquired over a period of five years. The Polestar vehicles will available in Europe in spring 2022 and in North America and Australia in late 2022. Neither company disclosed the financial terms of the deal, but the EV maker’s Polestar 2 sedan starts at $49,000, making the deal worth around $3.18 billion if Hertz pays full price for the vehicles.

Hertz reported having around 500,000 vehicles in its global fleet last year. The rental car company escaped bankruptcy last year after the pandemic, and an unsustainable amount of debt nearly devastated its business. The company, which is more than a hundred years old, was eventually refinanced to the tune of $5.9 billion by investors led by Knighthead Capital Management and Certares Management.

Hertz now plans to electrify nearly all of its roughly 500,000 cars and vans, with the Tesla and Polestar orders comprising a significant first chunk. Hertz says it will initially order the Polestar 2, though that could grow to include the company’s other models.

Polestar, which started out as the performance sub-brand of Volvo, has emerged as one of the more interesting EV companies on the market in recent years. The company — which is jointly owned by Volvo and Volvo’s parent company Geely — recently announced plans to go public by merging with a special purpose acquisition company, or SPAC. Polestar has positioned itself as a competitor to Tesla, with an emphasis on sleek, premium vehicles made from sustainable materials.

Polestar has only released two vehicles so far: the $155,000 hybrid coupe Polestar 1 and the Polestar 2. That lineup will grow with the release of the Polestar 3 SUV in 2022, the Polestar 4 compact SUV in 2023, and the Polestar 5 (née Precept) sports sedan in 2024. The company also unveiled a sleek roadster concept called the Polestar O2.

The news that Hertz would order 100,000 Tesla vehicles helped send the EV company’s stock prices soaring, with Tesla eventually reaching a valuation of over $1 trillion.