Jan 16, 2024

Hertz to Sell 20,000 EVs in Shift Back to Gas-Powered Cars

Hertz is significantly reducing its electric vehicle (EV) fleet, selling about 20,000 EVs, or roughly a third of its electric fleet. The proceeds from these sales will be used to purchase more gasoline-powered vehicles. This decision comes as the company faces financial challenges associated with its EVs, including higher repair costs for collision and damage, […] 
 Jan 16, 2024

Hertz to Sell 20,000 EVs in Shift Back to Gas-Powered Cars

Hertz is significantly reducing its electric vehicle (EV) fleet, selling about 20,000 EVs, or roughly a third of its electric fleet. The proceeds from these sales will be used to purchase more gasoline-powered vehicles. This decision comes as the company faces financial challenges associated with its EVs, including higher repair costs for collision and damage, and increased depreciation due to price cuts in the new EV market.

Hertz CEO Stephen Scherr noted that repair costs for EVs can be about twice as high as for comparable combustion engine vehicles. Additionally, market value depreciation of EVs, primarily driven by Tesla's price reductions, has resulted in larger losses for Hertz when reselling these vehicles. The company anticipates a loss of approximately $245 million due to the depreciation of its EVs.

Tesla vehicles, which make up about 80% of Hertz's EV fleet and 11% of its total rental fleet, have been a significant factor in this decision. Tesla's aggressive price cuts have not only influenced the depreciation of Hertz's fleet but also led to challenges in parts procurement and repair due to Tesla's relatively new market presence and less established parts supply network.

Hertz is also addressing the higher incidence of crashes involving EVs, particularly Teslas. The company is in discussions with Tesla to manage the car's performance and reduce the risk of damage. Hertz typically sells its used vehicles through auctions and directly to customers via the Hertz Car Sales website.

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