$TSLA $HTZZ Estimated annual revenue for Tesla

Just how big is the Tesla Hertz deal? Well, the price of the vehicles alone is at least $4B. Elon has confirmed that Hertz is paying retail prices for the Model 3s, and the cheapest one costs $40,000, though Hertz might opt for some of the longer range models. Then, we have the Supercharger revenues. Assuming an average cost of $0.315 per KwH, and average renter would probably need about 30KwH per day (~100 miles), though a few power drivers could skew this to the right substantially. Given that Tesla can produce electricity at roughly $0.07 per KwH, we will say that (30KwH x $0.25) = $7.5 net Supercharger revenue per car day. Assuming the cars are rented 24/7/365, that is $750,000 per day, or $274M per year. Nonetheless, Tesla has substantial pricing power, especially as the price of gas increases. This would assume that the average rent-a-car gets driven 36,500 miles per year. The average car renter is likely to get in more accidents per mile, since they’re unfamiliar with local traffic laws and the vehicles they are renting. It is hard to put a number on this, but I would guess that maybe 2% of the vehciles may get into an accident requiring repair annually. 2,000 cars x $10,000 average repair = $20M in automotive parts annually. This is a really rough estimate and it could be wildly distant from reality. Premium connectivity is $9.99 per month. Assuming all the cars have premium connectivity, that’s another $12M in revenue per year. Full Self-Driving (FSD) is $199 per month. No idea if Hertz would pay for this service yet, and at what scale. It as at most 239M in revenue per year assuming every single car got FSD. Tesla will also enjoy big data to improve their machine learning algorithms. That’s probably worth $5M per year, who knows though. Many renters will choose to purhcase a Tesla after test driving them too, which will result in another 10,000 sales per year at minimum. Assuming average cost of $50,000 that is another $500M per year in sales for Tesla. Free advertising from Hertz and Tom Brady is probably worth another $10M. When you take all these factors into account, Tesla is likely to get between $800M-$1.4B annually from this deal with Hertz. Margin of Error: $3B roughly The deal is a clear win-win for TSLA and HTZZ.

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npiterman

Oct 27, 2021

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$TSLA $HTZZ Estimated annual revenue for Tesla

bullish

Just how big is the Tesla Hertz deal? Well, the price of the vehicles alone is at least $4B. Elon has confirmed that Hertz is paying retail prices for the Model 3s, and the cheapest one costs $40,000, though Hertz might opt for some of the longer range models.

Then, we have the Supercharger revenues. Assuming an average cost of $0.315 per KwH, and average renter would probably need about 30KwH per day (~100 miles), though a few power drivers could skew this to the right substantially. Given that Tesla can produce electricity at roughly $0.07 per KwH, we will say that (30KwH x $0.25) = $7.5 net Supercharger revenue per car day. Assuming the cars are rented 24/7/365, that is $750,000 per day, or $274M per year. Nonetheless, Tesla has substantial pricing power, especially as the price of gas increases. This would assume that the average rent-a-car gets driven 36,500 miles per year.

The average car renter is likely to get in more accidents per mile, since they’re unfamiliar with local traffic laws and the vehicles they are renting. It is hard to put a number on this, but I would guess that maybe 2% of the vehciles may get into an accident requiring repair annually. 2,000 cars x $10,000 average repair = $20M in automotive parts annually. This is a really rough estimate and it could be wildly distant from reality.

Premium connectivity is $9.99 per month. Assuming all the cars have premium connectivity, that’s another $12M in revenue per year. Full Self-Driving (FSD) is $199 per month. No idea if Hertz would pay for this service yet, and at what scale. It as at most 239M in revenue per year assuming every single car got FSD.

Tesla will also enjoy big data to improve their machine learning algorithms. That’s probably worth $5M per year, who knows though.

Many renters will choose to purhcase a Tesla after test driving them too, which will result in another 10,000 sales per year at minimum. Assuming average cost of $50,000 that is another $500M per year in sales for Tesla.

Free advertising from Hertz and Tom Brady is probably worth another $10M.

When you take all these factors into account, Tesla is likely to get between $800M-$1.4B annually from this deal with Hertz. Margin of Error: $3B roughly

The deal is a clear win-win for TSLA and HTZZ.

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