Hertz sells 20,000 electric cars to reduce maintenance costs

According to news on January 12, car rental giant Hertz suddenly announced on Thursday that it will significantly reduce the size of its electric vehicle fleet in the United States and plans to sell approximately 20,000 electric vehicles. Behind this decision are the high collision and damage repair costs associated with electric vehicles. Hertz said the company therefore decided to refocus its efforts on the fuel vehicle market.

After the news was released, Hertz's stock price fell by about 3% at the opening. Previously, Hertz had actively promoted the construction of electric fleets and cooperated with brands such as Tesla and Swedish electric vehicle manufacturer Polestar. At the end of 2022, Hertz announced a large-scale purchase plan, including ordering 100,000 Tesla electric vehicles and signing an agreement with Polestar to purchase up to 65,000 electric vehicles within five years.

But in the latest regulatory filing, Hertz revealed: "Collision and damage costs related to electric vehicles remained at a high level this quarter." This makes the company unable to Not reassessing and adjusting its EV strategy. According to the editor's understanding, Hertz had set a goal of replacing 25% of its fleet with electric vehicles by the end of 2024. However, it now seems that this plan will be seriously affected.

Hertz expects the sale of the electric vehicles to result in approximately $245 million in additional depreciation charges in the fourth quarter of 2023, which will have a negative impact on adjusted core corporate profits in the quarter. Still, the company said it would work to improve the profitability of its remaining electric fleet.

Currently, Hertz’s used car sales website has more than 700 electric vehicles listed for sale, including BMW i3, Chevrolet Bolt and Tesla’s Model 3 and Model Y SUV and other models. This move undoubtedly marks a major shift in Hertz's electric vehicle market strategy.

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