Hertz’s audacious $4.2 billion investment in Tesla Model 3 vehicles didn’t just bolster Tesla’s bottom line. The move also became a dynamic marketing strategy for both companies, revealing the smart ingenuity of Elon Musk’s “innovation equation.”
In 2021, Hertz committed to the largest-ever vehicle order, procuring 100,000 Tesla Model 3’s, subsequently catapulting Tesla’s worth to a colossal $1 trillion, Bloomberg reported. Fast forward two years, and we see Hertz’s contributions to Tesla go beyond the hefty fiscal expenditure.
Hertz’s decision to add a fleet of Tesla vehicles to its services was more than just an attempt to modernize its offerings. It was a vital move in Tesla’s marketing playbook, which has not only translated into billions in earnings but also a potential saving of millions.
Despite the challenges Tesla faced, such as skeptical consumers and a lack of electric vehicle (EV) charging stations, Hertz’s investment became a problem-solving partnership for both companies. Consumers hesitant about investing in a Tesla can now experience driving one through Hertz’s rental services, offering far more insight than a standard 15-20 minute test drive.
Tesla Hertz Partnership
Moreover, Hertz’s acquisition of Tesla’s electric vehicles prompted the need for more charging stations across the country. This high demand puts pressure on the EV market to meet these needs and ensure EVs become a more practical choice for potential buyers.
Furthermore, Hertz’s contribution isn’t limited to generating demand. Earlier this year, Hertz joined forces with British Petroleum (BP), planning to invest around $1 billion in creating a nationwide charging network across the U.S.
This initiative takes the burden off Tesla and puts it on Hertz to expand the charging infrastructure, an essential factor in Tesla’s sales growth. Not only did Tesla secure a whopping $4.2 billion from Hertz’s initial purchase, but Hertz is now investing its resources to increase the practicality of EVs, thereby setting Tesla up for more success in the future.
Ultimately, this strategic partnership between Hertz and Tesla serves as a valuable lesson. It underscores the power of mutually beneficial partnerships as a marketing tool and a means of growth. In the words of Elon Musk and echoed by other industry titans, thinking about the future better positions you and your business to get ahead.