Rental car giant Hertz made a big bet on Tesla, buying tens of thousands of vehicles from the company to bolster its fleet. On Thursday, the company announced they failed to cash in on that bet.
Hertz plans to sell off 20,000 electric vehicles – roughly a third of its EV fleet – and use the money to buy more gasoline-powered cars. CEO Stephen Scherr said Teslas, which make up 80% of Hertz’s EVs, are the main problem, citing their high repair costs, low resale value, and unusual tendency to be involved in crashes.
Jessica Caldwell, head of insights at automotive information site Edmunds, told KNX News’ Chris Sedens that lower demand for EVs among customers was also likely a factor, especially in parts of the country where charging infrastructure isn’t as developed.
“I think we all kind of got caught up in this EV hype over the past few years, and it feels like in 2023 it kind of went back to reality that a lot of folks are just not ready for an EV,” Caldwell said. “Especially when you think about a rental car customer who is not going to own this vehicle forever, maybe is not familiar with charging locations, how chargers work, maybe not as good at planning their routes … I think it makes EVs a bit of a tough sell.”
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She said the reversal at Hertz may be a sign of broader issues in the EV market.
“I think the struggle that we're seeing right now is we had the onslaught of early adopters, people that were so excited about this technology, the people that are willing to, you know, go to extremes to make it work out for them,” Caldwell said. “However, for this to work, this has got to go to a broader group of people, and I think those folks are a lot more unforgiving. They're not going to be happy when chargers are broken, infrastructure isn't good.”
Hertz has already listed over 600 of its used Teslas for sale for as little as $21,557, a 39% markdown from the original price.
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