The prominent rental car company Hertz is reportedly selling off its electric vehicle fleet in increasing numbers amid the mounting depreciation costs of its EV lineup. Reportedly, used Telsa Model 3s are being sold for under $20,000 and Hertz is enduring massive losses after its significant investment in a lineup of EVs.
According to reports, Hertz’s EV program has continued to face substantial hurdles. The rental company reported an 89 percent increase in EV depreciation costs, equating to $537 per vehicle per month. Furthermore, Hertz has committed to selling off approximately 30,000 electric vehicles from its fleet by the end of the year, representing a major pivot from its previous plans for EV adoption.
Amid the EV hype of 2021, Hertz enacted a “go green” initiative that included the purchase of 100,000 Tesla Model 3s. The plan touted benefits, such as supposed reduced maintenance costs and consumer enthusiasm. However, these predictions have not come to fruition as unexpected factors in the EV market, such as the repeated price cuts on Tesla, which have accelerated depreciation and negatively impacted the value of Hertz’s fleet.
Furthermore, the company has encountered unanticipated repair and maintenance costs beyond what the company had forecasted several years ago. The financial hardships inflicted by the massive rollout of Hertz’s EV fleet have led to steep losses across multiple quarters. Moreover, the company’s former CEO, Stephen Scherr, resigned earlier this year amid the struggles.
The American Tribune reported in March on Scherr’s resignation after the company reversed course on its EV program. As the company’s electric ambitions backfired, Scherr announced he would be stepping down from his position as the Chief Executive Officer and the Board of Directors. Explaining his resignation, Hertz said, “The company expects this action to better balance supply against expected demand of EVs. This will position the company to eliminate a disproportionate number of lower margin rentals and reduce damage expense associated with EVs.”
Furthermore, Scherr highlighted the unanticipated, excessive costs of repairs on electric vehicles that far surpass the expense associated with that of internal combustion engines. “Collision and damage repairs on an EV can often run about twice that associated with a comparable combustion engine vehicle,” the former CEO said at the time.
However, just months prior, the Biden-Harris administration had praised Hertz for its green efforts. “This morning, [Hertz] was recognized by The White House for our efforts to expand access to electric vehicles across the country,” the company boasted on X, shortly before Scherr would resign from the company over the failed agenda. “Demand for EV rentals is growing and we’re here to help our customers electrify their travels.”
Regardless, Hertz emphasized the move toward the “diversification” of its fleet of rental cars to include EVs. “Throughout our 105-year history, Hertz has moved people and things. Now, within a changing mobility landscape, we are building a more diversified fleet for our customers, including electric vehicles. EVs offer our customers a premium driving experience, attractive economics in the form of lower energy prices and the opportunity to reduce carbon emissions.”
Watch a shocking EV fire during Hurricane Helene below:
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