Hertz is getting rid of 20,000 EVs, using some of the money to buy ICE vehicles

Vlad, 12 January 2024

Hertz has been very pro-EV over the past few years, announcing at various points that it would buy 65,000 EVs from Polestar and 175,000 EVs from GM; in February last year, it had over 40,000 Teslas on its books.

The tide has turned, however. Hertz is now planning on selling 20,000 EVs from its US fleet, and that's about a third of the total number of EVs it owns globally. Interestingly, the reason for this move seems to be all about "expenses related to collision and damage" to EVs, and how much higher those are compared to ICE vehicles.

Hertz is getting rid of 20,000 EVs, using some of the money to buy ICE vehicles

According to Hertz, these expenses remained high in the last quarter, "thereby supporting the company's decision to initiate the material reduction in the EV fleet". Some of the money it gets from the sale of the 20,000 EVs will be used to purchase more ICE vehicles.

Additionally, "the company expects this action to better balance supply against expected demand of EVs. This will position the company to eliminate a disproportionate number of lower margin rentals and reduce damage expense associated with EVs", Hertz says in an SEC filing.

Let's translate that into normal English: Hertz expects less demand for EV rentals than it initially forecasted, and it's making less money on each EV rental than it is on each rental of an ICE vehicle, because EVs are more expensive to fix or replace when they get into accidents.

Back in October last year, Hertz CEO Stephen Scherr revealed that an EV costs the company "about twice in terms of damage cost repair than a conventional internal combustion engine vehicle". And now it's decided to do something about that. It's interesting that it didn't simply choose to make EV rentals proportionally more expensive based on the added costs - there was always that option too, but perhaps it should have been done from the beginning? Anyway, we'll never know now.

Source | Via


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