Renting an electric vehicle through Hertz may become a bit difficult.
The car rental company will sell about 20,000 EVs, or about a third of the electric cars in its fleet.
Some of the money earned will go to purchase internal combustion engine vehicles, The Wall Street Journal reported.
Hertz introduced EVs into the options for vehicle rentals in 2021 and eventually purchased 100,000 Teslas.
“Electric vehicles are now mainstream, and we’ve only just begun to see rising global demand and interest,” interim CEO Mark Fields said at the time. Current CEO Stephen Scherr doubled down in 2022, buying 65,000 cars from Polestar, then pledged to buy 175,000 GM EVs later that same year.
The company said the cars lost value quicker than expected, The New York Times reported.
Scherr said, “Certain of these EVs became uneconomical for us.”
Part of it was the “unprecedented” price cuts made by Tesla, which made the resale value of used cars lower than hoped.
Rental companies estimate how much money they will get for vehicles when they are no longer rented and sold from the fleet. The resale value is a calculated cost and if it falls more than anticipated, it will impact profits, the Times reported.
Hertz said in an SEC filing that the company will take a loss of $245 million because of the depreciation of the vehicles. That is about $12,250 per car, CNN reported.
Scherr also said that EVs accounted for more accidents, as people who rented cars may not have had the experience with dealing with the technology that came with the vehicles. They accelerate quicker than gas vehicles and are heavier.
They’re also more expensive to fix.
“Collision and damage repairs on an EV can often run about twice that associated with a comparable combustion engine vehicle,” Scherr said according to CNN.
Despite Hertz’s decision, EVs are still popular, with sales totaling 1.2 million in 2023, up 40% in the last three months when compared to 2022.
To see what vehicles are currently for sale by Hertz, visit the company’s car sales website.