Hertz delays plans to buy Polestar EVs

Hertz has announced another shift in its electric vehicle (EV) strategy, with the rental car giant saying it will delay its purchase of Polestar EVs.

In 2022 Hertz announced plans to purchase 65,000 Polestar EVs over five years, a move that was part of a broader goal of having a quarter of its fleet be electric by the end of 2024. This agreement came after similar deals with other automakers, like a deal with Tesla for 100,000 Model 3 and Model Y, and 175,000 EVs from General Motors (GM).

However, the company’s strategy took a turn due to several challenges. Hertz recently announced plans to sell a number of its Teslas and reinvest that money into gas-powered cars, citing the plummeting resale value of EVs, paired with unexpectedly high repair costs as a reason for the change. The company also said it would not meet its goal of having a quarter of its fleet be electric by the end of the year.

While Hertz has not announced any changes to its deal with GM, their Polestar deal has now also shifted.

According to a report from the Financial Times, Polestar CEO Thomas Ingenlath disclosed that Hertz had sought to pause their agreement last fall. In response, Polestar has agreed to waive Hertz’s purchase obligation for 2024, under conditions that would prevent a quick sell-off of the existing EV fleet at diminished values.

When sales to Hertz will resume is still up in the air, with Ingenlath saying the two companies will reevaluate the situation next year, but adding that there is a “clear intention” to continue working together.

The decision to pause the purchase of Polestar EVs came after Hertz had already acquired about 13,000 vehicles from the automaker between 2022 and 2023.

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