That's crazy. Who pays the single-unit retail price for 100,000 units of something?!

That doesn't happen in business, ever, unless something weird is going on.

That weird thing is called supply & demand. Econ 101

Traditionally car makers offer volume discounts because they have excess capacity i.e. they can make more cars that they can sell.

Currently Tesla is sold out 6 months in advance on Model 3 SR (the one that Hertz is buying).

Currently Tesla doesn't care if Hertz buys cars from them or not because they are sold out for the foreseeable future either way.

So if Hertz wants 100k EV to be delivered within a year, their only option is Tesla, because no other company can even make that many EV cars.

And if Tesla doesn't want to give them discount, they have to pay full price.

Things are never that black and white.

Knowing you have a 100k order gives you more confidence to increase production for the medium term, even if it's not that useful in the short term.

Well I don't know why Hertz did it but as for Tesla, that is what happens when you are production limited and not demand limited.