Hertz has announced its intention to sell around 20,000 electric vehicle (EVs) from its U.S. fleet, which constitutes roughly a third of its total number of EVs globally. The decision is motivated by the company’s acknowledgement that expenses related to collisions and damage, particularly associated with EVs, have remained high in the most recent financial quarter. Hertz plans to reinvest some of the proceeds from the sale into acquiring gas-powered vehicles.
In an SEC filing, Hertz stated that this strategic move aims to better align the supply of EVs with expected demand, allowing the company to eliminate a disproportionate number of lower-margin rentals and reduce expenses associated with damages to EVs. This decision reflects a tactical adjustment in response to the challenges and cost considerations associated with maintaining and managing an extensive EV fleet.
Hertz’s decision to sell around 20,000 electric vehicles (EVs) from its U.S. fleet aligns with earlier indications that the company was reconsidering its significant investment in Electric Vehicle. In 2021, reports revealed Hertz’s order of 100,000 EVs from Tesla, followed by plans, announced in April of the following year, to purchase up to 65,000 EVs from Polestar over five years.
By October 2023, Hertz had already signaled a shift in its electrification plans, citing concerns over the higher costs associated with EVs. CEO Stephen Scherr noted that EVs incurred approximately twice the damage repair costs compared to conventional internal combustion engine vehicles. These challenges in managing and maintaining an extensive EV fleet likely contributed to Hertz’s decision to slow down its electrification efforts and, more recently, to sell a significant portion of its EVs.
