Polestar to supply Hertz with 65,000 EVs; deal could generate $3B in revenue

Swedish electric automaker Polestar has inked a deal with rental giant Hertz to supply up to 65,000 battery-powered vehicles.

The five-year global deal should represent more than $3 billion of potential revenue for the EV startup, a source told Automotive News.

While car rental companies typically demand significant discounts from automakers, Hertz is said to be paying closer to sticker price.

The Hertz order is more than double the 29,000 vehicles Polestar sold globally last year. But the Volvo-affiliated brand has ambitious plans to reach annual sales of 290,000 by 2025 and break even in 2023.

Polestar CEO Thomas Ingenlath said the Hertz deal does not change the EV maker’s sales projections.

“It does add strength and confidence to those numbers,” he said.

Ingenlath described the deal as a “very good arrangement” for Hertz and Polestar.

“They get a steady and secured supply of premium electric cars,” he said, “and we have done very good business at a large volume with no buybacks or related short-term sacrifices.”

Tyson Jominy, vice president of data and analytics at J.D. Power, described the Hertz deal as a “seminal moment” for Polestar — helping fund future product development and to generate buzz for the emerging brand.

“Automakers right now will make the most money selling to the fleet channel,” Jominy said. “Fleet customers are getting desperate for vehicles and will pay full price to get to the front of the line.”