Hertz to Sell 20,000 EVs and Replace with Gas Vehicles
Hertz has announced a plan to thin its fleet of electric vehicles by 20,000 units and replace them with gasoline-powered vehicles, citing lower than expected demand and higher repair costs. Bloomberg reports they have already began the process of selling their inventory.
Overall EV demand has not met lofty sales expectations, as sales growth was only 1.3% higher from the third to fourth quarter of 2023. In an interview with CNBC, Hertz’s CEO Stephen Scherr said EV rentals are “not at the level of demand that we anticipated.” EVs have also been more expensive to repair than gasoline vehicles in Hertz’s fleet, and Sherr suggested that “efforts to wrestle it down proved to be more challenging.” CNBC also did a credible job explaining the how and why this strategy failed.
The video suggests that routine maintenance costs were lower for EVs, but repairing accident damage is twice that of a gasoline vehicle. Tesla vehicles are sometimes associated with uneven parts and service support, and a quick scan of Hertz Car Sales’ website shows that they are currently selling 672 Teslas, 35 Chevrolet Bolts, 3 Kia EV6s, one Nissan Leaf, one BMW i3 from 2018 (!), and none of their Polestar EVs.
What does this mean for you?
More Teslas will be dumped onto the market in the coming months, which may affect already depressed prices. Currently, Hertz’s cheapest Tesla is this black Model 3 with the standard battery. It is fairly priced at $20,125, roughly 57% less than its original asking price of $46,440 back in 2021. The cheapest 2021 Toyota Prius that Hertz is currently selling is $18,300 (with no photos, possibly in worse shape than the Tesla), which is only a 28% loss in value in a similar timeframe.
Because EV production is lowering to match this slower than expected growth, Hertz’s market correction could be the best time for EV-intenders to get into the game before supply fully adjusts to demand. If that’s what you really want.
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Readers beware, your weird uncle twice removed is going to send this article to you over facebook messenger at least twice with an accompanying tag line “see EVs are going nowhere!”
Not going nowhere. But not going where the people in charge that don’t have a clue how reality works want them to anytime soon.
100% correct.
It’s more of loss like drigs ….. Just say NO !!!
Some people don’t want to hear (or more likely, can’t understand) inconvenient truth.
I suppose I am that weird uncle because I have forwarded it.
Wish I still had some of my uncles and great-uncles left…
[counting off uncles on fingers…] One of my great-uncles used to street-race a Stanley, so I guess I have to hold it against him that he didn’t leave that non-ICE to me. And one was a Lincoln dealer, one hardly knows what to say. Of my dad’s two brothers, though, they left me a new 66 El Camino, a new 84 Chev half ton with a stove-bolt, and a pretty sweet slant-six Dodge camper special. At one time there was a 56 T-bird, in primer, in that barn, so I’ll be uncling away about that one for the rest of my life.
Love it! 🙂 I’ve pretty much given up on countering all the EV FUD out there but kudos to you for an excellent post.
We hired a contractor at work, and he initially arrived on site with an electric rental. Fortunately we have chargers on site, but we are also very rural so we probably have most or all EV chargers within 100 air miles. He quickly swapped it out for a gas model. I can only imagine the sheer panic of renting an electric car and arriving at a destination with no charging stations.
I suspect another cost that Hertz didn’t anticipate was the expense of retrieving all the Teslas with dead batteries that headed off into “charging deserts”, or whose renters just didn’t watch the battery level gauge.
While I don’t own an e-car, and don’t anticipate buying one soon, I could imagine using one for around town use if I had a charger at my home. But using one on a business trip in a strange city where I was on a tight schedule? No way. Imagine telling your client “oh, sorry I’m an hour late – it took me awhile to find a charging station, and then when I found one all the bays were occupied or out of service, and then it took a half hour to charge”. Yea, right!
About 50 years ago I bought a Hertz rental that was about two years old and had about 20 thousand miles on it. It was an excellent purchase. They provided a complete history of the car including maintenance history. If I was going to buy a used car again I would definitely check them out. Just no EV’s thank you.
I purchased 2 cars from Hertz in the early 2000s. A 2000 well equipped Camry purchased in 2002 for $15,000, with about 20,000 mi. It was an excellent car, never had any trouble with it in the 11 yrs I owned it. Bought a 2002 Malibu (also well equipped) in 2004 for $10,000. I still own that car. It has 150,000mi. I have had a few problems but over all a good car for the money.
I have never, ever, contemplated buying a used car from Hertz (or any other rental company). Now I think I can double down on that statement.
If only everyone had that luxury. Ex-rentals show up on sketchy dealer lots all the time, and show up on legit dealer lots quite often. Only now with services like Carfax do we know the truth behind a vehicle’s origin. If you are gonna get one, might as well get it from the source and not pay someone else’s markup!
I remember shopping for a car for a friend in San Diego around 2009. Almost everything we found that was a year-or-two-old mainstream mid-sized sedan had a rental history.
If I could go back in time, the only Rental that I would consider buying from Hertz would be a 66 GT 350H!
That worked out very well for most who did . . .
I wouldn’t take one if they were giving them away. At least they are cutting their losses and going back to common sense. I guess you all now know how I feel about all electric vehicles. Hybrids make sense. All electric does not nor will it ever.
I sure would take one for free- then turn around and sell it- free money.
So there is no money in renting expensive cars with their own set of complications. Who would have thought?
These are cars to lease, not buy to me. Tech changes rapidly.
Hybrid still is the best next step. Jumping into all electric still has to many complications.
The complications with maintaining an ICE and a battery compulsion system increases the maintenance requirements, and the risk of higher than anticipated repairs.
I want to reduce my overall operating costs. Purchase, maintenance, cost of operation, and resale value are factors on how I decide on the vehicle of choice.
I do get very excited when I can drive a vehicle for years and sell it for more than I paid.
Last sentence…guess Hertz will make millions on selling those Teslas for more than what they paid?
My experience with buying a 2018 Toyota Highlander from a hertz rental location in Ottawa Ontario Canada in 2019 was excellent. The price was very good and to date I have had no issues with the vehicle.
It would be great fun to read this 10 years from now. My guess is that we are all just guessing what will happen next, and I also guess we will make more wrong guesses than correct guesses.
Well, it’s not hard to see current battery technology isn’t really ready for prime time, and battery replacement costs are just out of this world, so until battery technology changes, we’re likely in for more of the same.
But in 10 years there’s a decent chance other technologies and newer battery technologies WILL make electric more cost effective throughout the supply chain, unlike now where all the costs are fobbed off upstream (mining, electricity generation) to make it SEEM as if the stuff is green.
Rideshare can be a very good use case for BEVs. Both for Hertz (and their competition, eventually), and for the UBER drivers. However, it will be interesting to see if the operating costs truly are “lower” once battery replacements get factored in. The higher mileage rates and greater use of fast charging will, according to Tesla’s data, require much sooner and/or more frequent battery replacements. Those won’t be cheap, and that’s going to be on Hertz, et al. Will they raise the rental rates to compensate? Will they try to sell the vehicles before the batteries need to be replaced (good luck with that when the trial lawyers hear about it)? Either way, somebody will have to pay for the new batteries, whether they’re in a Tesla or some other BEV. All batteries die, eventually.
Rideshare and livery present a rough life for any vehicle. Cars spend a disproportionate amount of time in the body shop. Teslas in particular are incredibly expensive to repair.
No doubt due to their use of “gigacastings” and more proprietary parts likely in short supply.
I rent more cars every year than all you people COMBINED. The last thing I want for a rental in a strange town is an electric car. I need to gas and go, no time to sit in line waiting behind a bunch of man bunz.
If they don’t work for Hertz they won’t work for you, it’s about that simple. Government has used us and also industry to pay for the experimentation of these unproven beasts, fool us once maybe, you won’t fool us twice.
EV is a rich man’s toy, so let them play, while we normal people step on the GAS… and are very happy.
“If they don’t work for Hertz they won’t work for you, it’s about that simple.”
What? That logic is absurd. I am not a multi-billion dollar public corporation focused on profits. An EV fits my daily needs wonderfully. Frustrated I can’t afford one, as switching to an EV for daily driving and commuting seems like it would be quite nice once I looked at it objectively.
EVs are the only type of vehicle that can say they sunk two ships . . . and almost a 3rd last spring when an Euro Ferry had an EV fire that almost ended badly.
LLoyds of London now has ordered all manufacturers that want to ship EVs to disconnect the dead batteries and put the car on a wheeled dolly so they can be loaded & unloaded.
Insurance rates set to go up 70% because of the huge number of Write-offs even with small amounts of damage.
Just read a piece of a guy travelling in Canada with an EV spending $100 a day for charging . . . evidently they don’t work well in the Cold.
A New EV sitting in the showroom . . . has a Karbon Footprint = to your same size ICV after you have drive it for 60,000 Miles.
Hertz has obviously figured this out . . .
You seem to espouse a lot of information for not citing any sources. My comment was regarding how EV can and do work for individual users. nothing in your reply makes any sense relative to what I wrote.
Hertz’s business model is no doubt hugely different from the needs and duty cycles of the average car-owner. I don’t personally want an EV, but they make a lot of sense for many people – including 3 of my sibling-in-laws, who are quite happy with their 4 EV’s.
Blanket statements just don’t always reflect reality.
In all seriousness, where is all the electricity that will be required going to come from? And, at what cost to the end consumer? Electric home heating remains much higher than gas and as it becomes popular to run the world on electricity that will INCREASE, business 101.
I’ve had a ride in one and I’d rather stay home and stick pins in my eyes.
The electricity comes from the outlet on the wall, duh!
If your idea of “electric home heating” is resistive heat, yes. If it’s heat pumps, no.
Heat pumps are less costly than resistance heating. I have one here in the Tampa Fl area, and it works well. Not so great where it gets below 35 to 40 unless you use the ground or a large water source to draw the heat from. It is still more expensive than Natural Gas in most areas. Gas is not available in my area (and many others) unless you go with Propane which is more costly.
Undoubtedly.
Interesting comments thus far.
Hertz has the advantages of fleet purchase and fleet maintained model with the disadvantage of intense use of the vehicles. Resell value factors in as well.
Before Uber… 2nd life of many fleet vehicles (police, etc.) was in taxi fleets. Now areas like mine legislated “only newer” for taxis before Uber et al disrupted that industry. So this maybe messes Hertz’s $ predictions too.
The “lighter, better EV for 2026” that Honda just announced… probably are. There is a very good chance that unless consumers are protected (i.e., backwards compatible rules, manufacturer responsibility around old batteries, etc.) that current and older EV are going to be more like the Betamax story than VHS.
The real reduction in emissions (whole point no?) doesn’t happen until EV are a viable $ cost for consumers and last longer than current ICE fleet in years of service. That a shift in multiple levels of consumer thinking, let alone needed tech advances.
Interesting times.
It’s interesting to note that they have so many Teslas for sale, but not a single Polestar. I’ve been renting from Hertz every week for the past decade for business travel – the Tesla 3 was the only car that I wasn’t able to figure out how to use basic functions (e.g., adjusting the mirrors, turning on wipers) without googling – I’ve seen a lot of folks get in these cars, realize they can’t get them to work, and get right out. While there are risks to renting an EV in an unfamiliar city, I think the real issue here is how unnecessarily complicated Teslas are.
To be clear, I’m very pro-ICE given my passion for cars, but my husband has an i3 and it makes all the sense in the world for certain use cases.
It is much safer to buy an off lease vehicle because the leasee is responsible for properly maintaining the car and will likely not abuse it. Unlike former rentals where the possibility of renter abuse is much higher.
Here’s my Hertz EV rental experience. Was traveling to Orlando last summer, one of the largest car rental markets in the country. Hertz was really pushing EVs, and had discounted the heck out of them – cheaper than any ICE option – so I thought what the heck, I’ll give it a try. Arrived at Orlando and proceeded to the Hertz Gold pickup area – my name is not on the sign. A woman approaches me and asks if I’d reserved an EV, and then directs me to the Gold counter. After waiting in line for a bit, the Hertz rep tells me there are no EVs available. When I wave my hand at the rows of EVs just outside the window, he says “They are all charging – every single EV we have here is not fully charged.” I drove away in a Nissan Altima.