.....
Rental car giant Hertz is dramatically expanding its electric vehicle selloff program, with used Tesla Model 3s now available for under $20,000 as the company grapples with mounting EV depreciation costs. Hertz’s heavy investment in Tesla EVs has been a disaster causing massive losses and the loss of its CEO.
Inside EVs reports that Hertz’s ambitious electric vehicle program has hit another significant roadblock, with the company reporting an 89 percent increase in EV depreciation costs, amounting to $537 per vehicle per month. The rental car company has committed to selling 30,000 electric vehicles from its fleet by the end of 2024, marking a stark reversal from its earlier EV adoption strategy.
The company’s current predicament stems from its bold 2021 initiative to “go green,” which included plans to purchase 100,000 Tesla Model 3s. While this initial vision appeared promising, with benefits including reduced maintenance costs and strong customer interest, the strategy has since encountered numerous challenges that have forced a significant course correction.
A primary factor in Hertz’s EV difficulties has been Tesla’s multiple price reductions, which have severely impacted the residual value of the rental fleet. These price cuts have created a ripple effect throughout the used EV market, leading to accelerated depreciation of Hertz’s electric vehicle assets. The company is now offering used Tesla Model 3s at prices below $20,000, with additional savings possible through the $4,000 federal tax credit available for used EVs.
The financial impact has been substantial. Beyond the depreciation costs, Hertz has discovered that its Tesla fleet hasn’t delivered the anticipated cost savings. Repair expenses have exceeded expectations, and the company has experienced higher-than-anticipated collision rates with its Tesla vehicles, resulting in significant restoration costs and extended repair times.
These compounding factors have contributed to multiple quarters of losses, resulting in the resignation of CEO Stephen Scherr earlier this year.
The financial nightmare has Hertz’s new leadership to initiate a widespread divestment of its EV fleet. The company plans to maintain only enough electric vehicles to meet actual customer demand for EV rentals, marking a significant scaling back of its original electric mobility ambitions.
The selloff program will continue through 2025, with the company attempting to minimize losses as used EV values continue to decline. Current market prices for these vehicles appear to be stabilizing between $20,000 and $25,000, providing some predictability to the company’s loss mitigation efforts.
.....
.....
Apparently Hertz was NOT in on the game, and fell for the "green deal" hook, line, and sinker. I thought most corporations were smarter than that, or at least had inside info that would have at least curtailed their EV purchases to a few, just for show. Instead, they chose attempted corporate suicide... it remains to be seen if they can recover from this MASSIVE error in judgement.
Play stupid games, win stupid prizes.
Hertz gambled that customers would want to rent EVs, but only a small percentage of the customers did. Now they need to get rid of their EVs because they don’t pay for themselves. Hertz has a huge monthly bill for EV payments. If you’re interested, you might be able to get a used EV for 5-10K under market value. That amount would just about cover the losses after once the vehicle is at the end of its useful life.
Well, it looks like, "We're number 2 and we try harder," may finally end up being number 1...
(Avis)