Car rental giant Hertz has signed a deal with Swedish electric car marker Polestar for the purchase of up to 65,000 electric vehicles over the next five years. The two companies announced the new deal Monday.
Hertz said it has already made a preliminary order for Polestar's compact electric sedan, the Polestar 2, which will be added to its fleet. In October last year, Hertz had placed an order for up to 100,000 electric vehicles from Tesla.
The Polestar 2 is a compact electric vehicle with a 270-mile estimated range on a single charge. It is one of Polestar's two models available on the market. Polestar said it plans to release new models, including a compact SUV, a mid-sized SUV, and a sports sedan, by 2024.
Hertz said Polestar vehicles would become available to its European customers first by this spring. The company plans to then roll out its new Polestar fleet in North America and Australia by the end of this year or early next year.
Polestar stands to gain much from the deal as it would allow it to achieve its sales goals for the coming years. It would also allow the company to position itself as a viable alternative to Tesla for customers interested in shifting to electric vehicles. In the past, manufacturers trying to break into a new market had attempted to offer their vehicles to rental car businesses as a method of presenting their products to a wider variety of buyers, effectively giving them an extended test drive.
With over 1 million electric car sales last year, Tesla is by far still the most dominant company in the segment. Polestar is also up against other electric car manufacturing startups like Lucid, as well as well-known automakers like Ford, General Motors, Volkswagen, and Nissan, all of which offer EVs in either the US or Europe.
Last year, the Swedish automaker sold around 29,000 vehicles, which represented a 185% increase from its sales numbers a year before. Polestar CEO Thomas Ingenlath previously stated that the company aims to sell at least 65,000 units this year.
Polestar broke away from Volvo in 2017 and is now a stand-alone electric car manufacturer. Volvo and Volvo parent firm Geely, which recently announced plans to go public in a deal slated to completion in mid-2022, continue to jointly own the company. While it is operating as a stand-alone company, Polestar still benefits from specific technological and engineering synergies with Volvo.