Companies often tout their green initiatives as a way to drum up new business, but the expensive reality of investing in EVs and other technologies isn’t always clear up front. Hertz found that out the hard way, as it aggressively invested in new EVs for its rental fleet a couple of years ago, only to begin selling them off in 2024.
The company announced that it would buy tens of thousands of electric vehicles from Polestar, BMW, Chevrolet, Tesla, and others and had aimed to purchase 100,000 Teslas by the end of 2022. While that splashy announcement likely netted the company new customers, it now has hundreds of EVs on sale as it moves to scale back its fleet. At their height, EVs made up 11 percent of Hertz’s rental vehicle catalog.
The company blamed EVs’ high repair costs and expensive collision repairs as part of its decision. Consumer Reports found that EVs are typically less reliable than comparable gas models, which could cause repair costs to pile up over time. Hertz will see about a $245 million expense from the sale in the fourth quarter of 2023.
Demand for EVs continues to grow, although far slower than many had hoped. Sales climbed just over one percent in the last quarter of 2023, but updates to the EV tax credit rules may spur more sales going forward, as buyers can now use the tax credit as a discount at the time of the sale instead of waiting for a year-end refund.
[Image: Feng Cheng via Shutterstock]
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