7:49 am, January 13, 2024
Car rental firm Hertz is to offload roughly a third of its American EV fleet because of the high cost of maintenance as well as poor valuations.
Hertz Global Holdings was reported by The Times as saying it made the decision because of poor used car valuations plus higher bills for replacing and repairing eco-friendly vehicles used by taxi drivers but which were damaged in collisions.
It is going to sell some 20,000 vehicles from its electric car fleet, including Teslas, some two years after it struck a deal with Elon Musk’s company, said Reuters, which added that Hertz had planned to buy 100,00 Teslas by the end of December, as well as 65,000 Polestars over a five-year period.
Hertz had also said it would buy 175,000 of General Motors’ EVs, said The Times.
According to a regulatory filing made by Hertz on Thursday: ‘Expenses related to collision and damage, primarily associated with EVs, remained high in the quarter.’
The rental firm now intends concentrating on better profitability for its remaining EV fleet, said Reuters.
Reuters quoted Morgan Stanley analyst Adam Jonas as saying that Hertz’s move was another indication that expectations about EVs had to be ‘reset downward’.
Although Hertz had been aiming to change a quarter of its fleet to electric by the end of this year, it is instead going to replace the sold EVs with petrol vehicles.
According to The Times, Hertz said the decision would cost it $245m, (circa £192m) but cashflow and profit would be higher than expected from this year onward.
Main image via Hertz newsroom video
