At the beginning of the year, car rental company Hertz had around 60,000 units in its global EV fleet – and announced that it would sell 20,000 electric cars from various manufacturers in the USA by the end of the year and invest some of the proceeds in the purchase of combustion cars. Now it appears that this will not be the case. In its latest annual report, Hertz writes that it has “upsized its EV disposition plan by 10,000 vehicles, for a total of 30,000 EVs intended for sale in 2024.” This would correspond to half of all electric cars operated by Hertz at the beginning of the year.
Hertz also announced that it had recognized vehicle depreciation charges of $588 million in the first quarter, including $195 million for the EVs for sale. Following the publication of the resulting quarterly loss, Hertz Global’s share price plummeted by 24 per cent on Thursday. According to Reuters, this was the biggest percentage drop in a single day.
Hertz had already announced in October 2023 that it would not push ahead with the expansion of its electric fleet as quickly as previously planned. For example, Tesla’s repeated price cuts have reduced the resale value of electric cars. In addition, it was said at the time that repairs to electric cars were more cost-intensive than expected.
In the fall of 2021, Hertz announced plans to purchase 100,000 Teslas, half of which would be made available to Uber drivers in the USA. Hertz also wanted to rent a further 25,000 electric cars to Uber drivers in European capitals, including models from Tesla and Polestar. The car rental company had commissioned Polestar to supply up to 65,000 electric cars. Hertz placed another order for up to 175,000 electric vehicles with General Motors.
In the meantime, disillusionment has set in. Stephen Scherr, Chief Executive Officer of Hertz, told Bloomberg at the beginning of the year that the high costs associated with electric vehicles were continuing – and “efforts to reduce them have proven more difficult”. In the future, Hertz will therefore closely monitor the demand for electric vehicles both at dealerships and within its own company “to decide whether the company should buy more vehicles”.
Car rental company Sixt is also reportedly phasing out electric cars from Tesla. The residual value issue, which seems to affect Tesla more than other brands, is apparently also playing a special role at Sixt.
