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Summary. Hertz, a leading player in the car rental industry, is going to get rid of a large part of its electric fleet, estimated at some 20,000 vehicles, in favor of new gasoline vehicles. This strategic move is in response to financial challenges, particularly the high maintenance costs and rapid depreciation of electric vehicles.

This strategy change at Hertz marks the complex dynamics in the transition to electric vehicles within the car rental industry. It highlights the financial stumbling blocks related to the maintenance and resale value of EVs.

In the news. Hertz is relinquishing a third of its electric vehicle fleet, amounting to about 20,000 vehicles.

  • The sale comes in the face of higher repair costs and faster depreciation of EVs.
  • Hertz CEO Stephen Scherr outlined the issues during a recent financial analysis.

Repairs are twice as expensive

Zoom in. Repairs on electric vehicles can be up to twice as expensive as those on conventional internal combustion engine vehicles.

  • Hertz expects a $245 million loss from depreciation on its electric vehicles, an average of $12,250 per car.
  • Price drops on new EVs, especially by Tesla, are having a dampening effect on the resale value of used EVs.
    • In the U.S., the price of a used Tesla Model X fell 36 percent from a year earlier.
    • In Belgium, Tesla lowered the price of a Model Y to below 40,000 euros. The price reduction makes buyers eligible for the 5,000 euro premium promised by the Flemish government.
    • In the Netherlands, Tesla has lowered the price of a new Model Y by about €5,000 to €44,990. This currently makes a new Tesla cheaper than a used one. This is causing major problems for used and leasing companies, writes Autoblog.nl.

Zoom out. This situation illustrates the impact of pricing strategies of manufacturers like Tesla on the used car market.

  • With an 80% share of Hertz's EV fleet, Tesla plays a key role in this development.
  • The maintenance and repair challenges specific to Tesla, caused by a limited supply of parts and specialized technicians, highlight the major challenges in the EV sector.

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