While electric vehicle incentives and mandates have riled the internal combustion crowd, it appears the invisible hand of the market is stronger than the heavy hand of political rhetoric.
Rental car giant Hertz announced Monday it would purchase 100,000 electric vehicles from Tesla, a deal that boosted Tesla stock 13% and the company’s market value past $1 trillion for the first time.
Just a few months ago, Minnesota auto dealers and Republicans said there wouldn’t be enough demand for electrical vehicles to justify Gov. Tim Walz’s modest clean air standards. But the market is speaking.
Hertz CEO Mark Field told the Associated Press some electric vehicles will be in Hertz lots by November.
Analysts say the deal is just the start for anticipated roaring demand for electric vehicles from rental car companies and others who have become acutely aware of the environmental destruction caused by global warming, the majority of which is caused by the transportation sector. They note that EV rental cars will offer a great “test drive” for consumers eventually purchasing their own.
The deal will bring Tesla about $4 billion as each Tesla Model 3 sells for about $40,000. Hertz said it would complete its sales next year and plans to add 3,000 charging stations at 65 locations and 4,000 in 2023 as the company aims to have the largest fleet of electric vehicles in the United States. Amazon bought 100,000 electric delivery vans in 2019 from Rivian, a startup manufacturer in which Amazon has an ownership stake.
If two of the richest people in the world, Elon Musk of Tesla ($229 billion) and Jeff Bezos of Amazon ($194 billion) have decided a substantial investment in electric vehicles is a good idea, it seems they’re on to something the rest of us should consider.
That includes those critics of Walz’s push to adopt air standards that will require more and more electric vehicles. In July Minnesota approved stricter tailpipe emissions standards that will take effect Jan. 1 and incentivize new car dealers to stock more electric vehicles. More than a dozen states have adopted the standards, with Minnesota being the first Midwest state to do so.
Senate Republicans and the Minnesota Auto Dealers Association fought the standards in the Legislature and in the courts but were not successful. Statements from the auto dealers group that “California bureaucrats” will somehow be in charge of Minnesota policy and that internal combustion cars will be “effectively outlawed” are ridiculous claims that should be ignored.
For their part, Senate Republicans ousted Minnesota Pollution Control Agency Commissioner Laura Bishop, a businesswoman with sterling credentials, due to the politics of the clean car rules. Republicans orchestrated the removal as retaliation for Walz using his rulemaking authority to improve air quality for all Minnesotans.
Minnesota companies will benefit from the new rules. Phillips & Temro Industries, makers of electric charging equipment, plan to add 200 to 500 jobs in the next few years, again indicating strong demand for electric vehicles. Eden Prairie plans to move its entire fleet to electric vehicles.
The free market has clearly spurred electric vehicle demand. Auto dealers and Republicans should not try to fight capitalism.