Hertz is selling 20,000 EVs and replacing them with gas-powered vehicles
The company cited demand concerns and higher expenses linked to EV repairs for the decision.
Hertz says it's selling around 20,000 electric vehicles from its US fleet, which constitutes approximately a third of its total number of EVs in its global fleet. It claimed that "expenses related to collision and damage, primarily associated with EVs, remained high" in the most recent financial quarter, "thereby supporting the company’s decision to initiate the material reduction in the EV fleet." Hertz said it plans to reinvest some of the proceeds into purchasing gas-powered vehicles.
"The company expects this action to better balance supply against expected demand of EVs," Hertz said in an SEC filing. "This will position the company to eliminate a disproportionate number of lower margin rentals and reduce damage expense associated with EVs."
There were already signs that Hertz was having cold feet over its decision to invest heavily in EVs over the last few years. It was reported in 2021 that the rental company had ordered 100,000 EVs from Tesla. The following April, it emerged that Hertz planned to buy up to 65,000 EVs from Polestar over five years.
However, in October 2023, Hertz said it was slowing down plans to electrify its fleet. At the time, CEO Stephen Scherr said EVs cost Hertz "about twice in terms of damage cost repair than a conventional internal combustion engine vehicle."
As Reuters notes, Tesla is currently selling more than 700 EVs through its used car website. The vast majority of those are Tesla Model 3 and Model Y vehicles.
