German car rental giant Sixt has announced it will be phasing out their Tesla electric vehicles (EVs) from its rental fleet. The company said it is making the move in response to Tesla’s aggressive price cuts and high repair costs.
According to a Bloomberg report, Sixt is communicating this decision to its customers through an email, citing poor resale values, as well as higher repair costs for EVs compared to traditional combustion-powered models. The email states that there are “significantly higher holding costs for Tesla vehicles,” leading the company to discontinue the addition of any more Tesla vehicles to its fleet.
Despite the decision to phase out Teslas, a spokesperson for Sixt reaffirmed the company’s commitment to EVs, revealing plans to electrify up to 90% of its European rental fleet by the end of the decade. Sixt recently inked a deal to purchase around 100,000 BYD vehicles by 2028, with a rollout starting in Germany, France, the Netherlands, and the UK.
This move aligns with Sixt’s broader strategy to convert half of its 16,000-strong nationwide rental fleet to electric vehicles “in the coming years.” In Australia, Sixt has already purchased at least 500 BYD Atto 3s for its fleet, aiming to establish the largest and most diverse electric vehicle rental fleet in the country.
Sixt is not the first rental company to change their mind on Tesla EVs. Hertz has also slowed down its electrification rollout after reporting lower-than-expected margins in the third quarter of the year. Hertz not only cited high repair costs as a significant challenge, but also noting that collision and damage repairs on EVs can cost about twice as much as comparable combustion engine vehicles.