Hertz has announced a shift in its electrification strategy. The car rental giant has confirmed it is selling around 20,000 of its electric vehicles (EVs) and plans to go back to gas-powered cars.
Hertz announced the shift in its strategy in a regulatory filing on Thursday, explaining that the sell-off will amount to about one-third of its total EV fleet, and include “multiple makes and models.” (via Bloomberg)
The company made headlines in 2021 after announcing plans to spend $4.2 billion to purchase 100,000 Teslas in an effort to electrify the rental car industry. Since the initial deal with Tesla, Hertz also signed deals last for 65,000 Polestar 2 EVs and 175,000 EVs from General Motors.
As for the reason behind the shift, Hertz said in the filing it was to “eliminate a disproportionate number of lower margin rentals and reduce damage expense associated with EVs.” The company says it will use a portion of the proceeds from the sales of its EVs to fund the purchase of internal combustion engine (ICE) vehicles.
The plans to sell part of its EV fleet have already been set into motion after Drive Tesla reported earlier this week the company had over 800 Teslas for sale on its website, many for under US$20,000. Hertz said in the filing the sales will continue “in an orderly fashion over the course of 2024.”
This shift back to ICE vehicles is not a surprise. During their Q3 2023 earnings call in October, Hertz said it was reassessing its EV strategy due to Tesla’s price reductions and unexpectedly high repair costs.
