Home Gadgets Hertz selling 20k electric vehicles to buy gas cars as company faces $245m loss

Hertz selling 20k electric vehicles to buy gas cars as company faces $245m loss

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Hertz selling 20k electric vehicles to buy gas cars as company faces $245m loss

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HERTZ has made the decision to get rid of a third of its electric vehicles after losing millions of dollars.

This is a major change for the motor vehicle company, which has been an advocate for electric cars in the past.

Hertz revealed they are selling thousands of their electric vehicles

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Hertz revealed they are selling thousands of their electric vehiclesCredit: Getty
Depreciation will cost Hertz millions of dollars

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Depreciation will cost Hertz millions of dollarsCredit: Getty
Tesla currently makes up 80% of the Hertz electronic vehicle fleet

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Tesla currently makes up 80% of the Hertz electronic vehicle fleetCredit: Getty

Hertz plans to sell 20,000 of its vehicles and use the money to purchase more gasoline-powered vehicles.

In May 2023, the company was optimistic about the future of electric vehicles, with the plan to have 25% of its 500,000 vehicle fleet be electric by the end of 2024, according to CNBC.

The year prior the company had signed deals to buy 330,000 vehicles from Tesla, Polestar, and General Motors. 

However, since then, a spokesperson for the company has revealed that electric cars have hurt the company, due to the high damage-repair costs and depreciation of its value.

Read More on Electric Cars

“[C]ollision and damage repairs on an EV can often run about twice that associated with a comparable combustion engine vehicle,” Hertz CEO Stephen Scherr said in a recent analyst call.

The resale value has suffered remarkably due to the decline in electric vehicle prices in the car market.

“The MSRP declines in EVs over the course of 2023, driven primarily by Tesla, have driven the fair market value of our EVs lower as compared to last year, such that a salvage creates a larger loss and, therefore, greater burden,” Scherr said.

The depreciation of the cars is expected to cost the company $245million, the company SEC filing claimed.

Tesla currently makes up 80% of the Hertz electronic vehicle fleet, and the car’s new low prices have forced other car companies to follow suit.

Hertz executives have also come to realize that Tesla does not have a lot of replacement parts, making it an expensive and time-consuming issue if anything happens to the car.

“Remember, in the likes of GM and other [automakers], there’s decades of establishment of a broad national parts supply network,” Scherr said in a recent analyst call.

“There’s an aftermarket of parts that is there, that is less mature, obviously, in the context of Tesla.”

The executive continued by pointing out that electric vehicles have been getting into more crashes compared to the rest of their inventory.

“Our work with Tesla is to look at the performance of the car, so as to lower the risk of incidence of damage,” he said.

“We’re in very direct engagement with them on parts procurement and labor and the like.”

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