Hertz to Offload 30,000 Electric Cars in Bid to Cut Losses

Thousands of Hertz’s electric cars will soon be on sale. Due to considerable depreciation seen in its EVs, the car rental behemoth will offer an extra 10,000 EVs, more than originally planned.

After pledging to buy 100,000 Teslas to improve automobile rental services during the epidemic, Hertz stated this year that it would sell a portion of its electric cars. Now that it has learned that electric vehicles aren’t the good investments it had hoped for, the company is reportedly trying to reduce its losses by selling them off quickly.

Hertz hopes to make a profit by selling its older rental vehicles. At the very least, this business model has historically been profitable for them when it comes to standard automobiles. However, secondhand electric vehicles have not yet had the same success.

This purge of Hertz’s electric vehicles is disappointing news for anybody who spent a lot on a brand-new EV just a few years ago. That’s because there will soon be an influx of used electric vehicles into the market, which will decrease their worth.

The company’s electric vehicles’ expensive upkeep and rapid depreciation have been to blame, while consumers have had their fair share of problems with EV charging.

The rental company said their electric vehicle fleet was an expense and a hassle for customers. During an earnings call with investors, it was noted that despite many renters’ lack of knowledge about electric vehicles, they choose to utilize them due to availability.

That led to a first-quarter loss of $392 million, even though sales were up 2% year-over-year in 2023 at $2.1 billion.

Hertz had intended to remove 20,000 EV models from the fleet, but it had to sell even more after incurring an extra $195 million last quarter due to depreciation across the entire fleet.

Among the many problems with Hertz’s electric vehicle operation, which has reportedly cost them $440 million, are the tens of thousands of vehicles it is now trying to offload.