In its latest annual report, Hertz stated that it has increased its plan to sell EVs by 10,000 units, totaling 30,000 EVs intended for sale in 2024. This represents half of the electric cars in Hertz's fleet at the beginning of the year.
HertzAt the start of the year, Hertz, the car rental company, had approximately 60,000 electric vehicles (EVs) in its global fleet. It initially planned to sell 20,000 EVs from various manufacturers in the USA by year-end and reinvest some of the proceeds in purchasing combustion cars. However, recent developments indicate a change in strategy. In its latest annual report, Hertz stated that it has increased its plan to sell EVs by 10,000 units, totaling 30,000 EVs intended for sale in 2024. This represents half of the electric cars in Hertz’s fleet at the beginning of the year.
Additionally, Hertz reported vehicle depreciation charges of $588 million in the first quarter, including $195 million for EVs earmarked for sale. The announcement of this quarterly loss led to a sharp decline in Hertz Global’s share price, plummeting by 24% on Thursday, marking the largest single-day percentage drop, according to Reuters.
Hertz had previously announced in October 2023 that it would slow down the expansion of its electric fleet due to factors such as Tesla’s repeated price reductions affecting EV resale values and higher-than-expected repair costs for electric cars.
In fall 2021, Hertz had ambitious plans to purchase 100,000 Teslas, with half allocated to Uber drivers in the USA and another 25,000 EVs for Uber drivers in European capitals, including models from Tesla and Polestar. Hertz had also commissioned Polestar to supply up to 65,000 electric cars and placed an order for up to 175,000 electric vehicles with General Motors.
However, disillusionment has set in since then. Stephen Scherr, Hertz’s CEO, acknowledged at the start of the year that the high costs associated with EVs persist, and efforts to reduce them have proven challenging. Moving forward, Hertz plans to closely monitor demand for EVs both in dealerships and within its own operations to determine whether to increase vehicle purchases.
Reports also indicate that Sixt, another car rental company, is phasing out Tesla electric cars. The issue of residual value, particularly affecting Tesla compared to other brands, appears to be a significant factor for Sixt as well.
Source: Hertz
