Hertz is undertaking a significant reduction of its electric vehicle (EV) fleet, notably selling off approximately 30,000 Teslas. This strategic shift comes after the rental car giant faced substantial financial losses, including a $392 million loss in the first quarter of 2024 and a $195 million depreciation charge. The high maintenance costs and rapid depreciation of these EVs, exacerbated by their heavy usage, particularly by Uber drivers, have rendered the fleet unsustainable under current market conditions.
The broader market environment has also impacted Hertz's decision. Rising interest rates for auto loans, a shortage of reliable charging infrastructure, and consumer concerns about battery performance in cold weather have collectively dampened enthusiasm for electric vehicles. These factors have led Hertz to pivot back towards traditional gas-powered vehicles, aiming to stabilize its financial situation and operational efficiency.
As part of this strategic reorientation, Hertz has already sold about 10,000 EVs and plans to offload the remaining 20,000 by the end of the year. The sales pace, however, has significantly decelerated, indicating potential challenges ahead. This move by Hertz may serve as a cautionary tale for other rental companies considering a large-scale adoption of EVs, highlighting the complexities and financial risks associated with maintaining an electric fleet in the current market landscape.