Rental car company Hertz is walking back its push into the electric vehicle market.
Hertz has decided to sell off one-third of its electric vehicle fleet, totalling around 20,000 vehicles.
The big picture: CNN reported that Hertz will use the proceeds from selling the electric vehicles to purchase more gasoline-powered vehicles.
- Executives from Hertz have stated that EVs have negatively impacted the company’s financials due to higher costs for damage repairs and depreciation.
- The decline in the prices of new EVs, primarily driven by Tesla, has also decreased the resale value of Hertz’s used EV rental cars, leading to greater losses for the company.
- Hertz expects to incur a loss of around $245 million in depreciation on the EVs, averaging about $12,250 per vehicle, according to an SEC filing.
- Tesla constitutes about 80% of Hertz’s EV fleet, and the price reductions initiated by Tesla have influenced other automakers to reduce the prices of their electric vehicles as well.