So, I came across some interesting news about Hertz and the electric vehicles in their fleet. It turns out that Hertz plans to sell around one-third of the electric vehicles in their lineup. According to the company, these electric cars lost their value faster than expected, dealing a blow to Hertz’s efforts to transition to emission-free vehicles.
Hertz revealed that the electric vehicles in their possession were more prone to accidents and incurred higher repair costs. As a result, they intend to replace the 20,000 battery-powered cars they are selling with more traditional gasoline vehicles.
Now, here’s where it gets really interesting. Hertz both attributed and partial blamed “unprecedented” price cuts by Tesla as a reason for the decreased resale value of their electric cars. This has provided ammunition for critics of government policies aimed at promoting electric vehicles to combat climate change and air pollution.
One prominent opponent, Senator John Barrasso, made a statement during a climate policy hearing, citing Hertz’s decision as evidence that electric vehicles are both expensive and unpopular.
Hertz’s CEO, Stephen Scherr, pointed fingers at Tesla for the company’s decision to sell off its electric vehicles. He highlighted that Tesla’s significant price reductions last year substantially diminished the value of their used cars, affecting Hertz’s profits.
On top of that, Tesla’s reluctance to offer volume discounts on replacement parts added to Hertz’s challenges. It seems that Tesla’s relative inexperience in catering to rental car companies may have played a role in their decision-making.
Interestingly, Hertz had previously announced plans to purchase 100,000 Teslas as part of their initiative to electrify their fleet, but it seems that only a fraction of that number has been acquired so far. However, Hertz does offer electric vehicles from other manufacturers such as Kia, General Motors, Volkswagen, and Polestar.
In the midst of all this, Hertz acknowledged that the lack of experience with electric vehicle technology among renters could have contributed to more accidents involving their electric cars. Despite the company’s efforts to educate customers, it seems that demand for the vehicles was lower than expected.
This move by Hertz has undoubtedly provided fodder for skeptics, including former President Donald J. Trump, who have been critical of the hype surrounding electric vehicles. However, it’s worth noting that overall electric vehicle sales in the United States have been steadily climbing, reaching nearly 1.2 million last year, showing a 40 percent increase in the last three months of 2023 compared to the same period in 2022.
Hertz clarified that they are not abandoning their electrification plans or their intention to purchase more Teslas. They believe that the market still needs time to mature and that the convergence of Tesla’s status as a best-selling car and the best rental car is on the horizon.
So, there you have it – a glimpse into the challenges that Hertz has faced with their electric vehicle fleet. It’s a reminder that the shift to electric vehicles is a complex process and that the market dynamics are constantly evolving.