Hertz car rental have announced their plans to sell most of the EVs that they hire out and reinvest in gas powered vehicles due to waning demand from their customers according to a report in Bloomberg. Hertz plans to sell some 20,000 EVs during the course of this year and expect to lose about USD245 million in the process.
As of now, Hertz are listing almost 700 EVs (mostly Teslas) for between USD20k and USD40k for their Model 3s. This is a significant discount from the USD38k it costs to buy a model directly from a dealership.
The reason they are divesting from their EV fleet is simple, they cost too much to maintain and repair. But buying a used EV is not as straight forward as you may think, at least according to Business Insider who point out that high mileage, amongst other things, are a red-flag that potential buyers must be aware of.
Hertzs’ venture into EVs, and particularly Teslas, was launched with the usual brouhaha with a high-profile advertising campaign featuring Tom Brady, an American Football legend.
However, in a recent interview, Hertz CEO, Stephen Scherr said that they would sell-off most of their EV fleet because they are being operated at an elevated cost.
As we have pointed out many times over here at Automology, the cost of running an EV is nowhere as low as the manufacturers would have us believe. In a recent survey conducted by Business Wire, they found that the repair of an EV is 29% more costly than and ICE model in a side-by-side comparison. This then impacts the insurance cost which becomes significantly higher as a result.
We’ve also covered two separate stories featuring the Hyundai Ioniq 5 that had a battery replacement costs that were higher than the price of the car.
Hertz plans to reinvest the money they get back from the sale of EVs into expanding their gas powered vehicles—which would appear to be not so good for the planet but much better for the company balance sheet.
It would appear then that the public are not as in love with EVs as we are being led to believe.
But hold your horses one darn minute because Hertz are also reported to be eyeing GM’s plans to sell more affordable EVs which may then make renting out EVs profitable for Hertz.