Hertz, the iconic car rental company, is making a surprising U-turn on its electric vehicle (EV) ambitions.
Hertz, the iconic car rental company, is making a surprising U-turn on its electric vehicle (EV) ambitions. Today, they announced plans to sell off a whopping 20,000 electric cars from their U.S. fleet, representing a third of their entire EV inventory. This sudden change of course has left investors and environmentalists scratching their heads.
Why the sudden change of lanes?
Hertz cites higher repair costs associated with EVs compared to gas-powered vehicles as the main reason for the sale. Apparently, bumps and bruises from rental drivers tend to be more expensive to fix on electric models. This news sent Hertz shares skidding 3% lower at market open.
Flashback to a greener future:
Just last year, Hertz was singing a different tune. They declared bold plans to acquire 100,000 Teslas and up to 65,000 Polestar EVs, aiming for a quarter of their fleet to be electric by 2024. Now, with 20,000 EVs heading to the used car lot, that green dream seems to be stalled at a red light.
Financial impact:
The sale is expected to hit Hertz’s profits hard, with an estimated $245 million depreciation expense and a dip in adjusted core profit for the fourth quarter of 2023. However, the company says they’ll keep their foot on the accelerator for improving the profitability of their remaining electric fleet.
What’s next for Hertz and EVs?
This strategic shift raises questions about Hertz’s commitment to sustainability and the future of EVs in the rental car market. Will other companies follow suit? Will this flood the used car market with EVs and affect resale values? Only time will tell how this detour on the road to electrification will play out.
In a nutshell:
- Hertz selling 20,000 EVs due to high repair costs.
- Move contradicts previous ambitious EV plans.
- Financial impact expected, but company remains focused on remaining EV fleet.
- Questions raised about Hertz’s sustainability commitment and future of EVs in rental market.
This news story is still unfolding, so stay tuned for updates as Hertz navigates this unexpected detour on their electric journey.