CV NEWS FEED // Hertz Global Holdings (“Hertz”) announced plans to sell a third of its electric vehicles (EVs) and refocus its business on traditional gas cars.
Bloomberg reported Thursday that the company’s “sales of 20,000 EVs began last month and will continue over the course of 2024.”
Hertz’s sell-off was sparked “due to weak demand and high repair costs for its battery-powered options,” according to Bloomberg.
Thousands of car dealers wrote in a letter to President Joe Biden last November that “electric vehicle demand today is not keeping up with the large influx of [EVs] arriving at our dealerships prompted by the current regulations.”
“[EVs] are stacking up on our lots,” the dealers continued. “[T]he majority of customers are simply not ready to make the change. They are concerned about [EVs] being unaffordable.”
Business Insider indicated that EVs are thousands of dollars more expensive than comparable gas vehicles. “The average new car sells for around $46,000, and the average new EV costs closer to $50,000, according to JD Power,” the Insider noted.
They also lose their value faster, the Insider reported. “A recent study from iSeeCars found that electric cars have an average five-year depreciation rate of 49.1%, compared to an industry average of 38.8%.”
>> THOUSANDS OF CAR DEALERS STAND UP TO BIDEN’S EV MANDATE <<
Hertz’s move comes three years after the car rental conglomerate ordered 100,000 Teslas. This headline-making deal at the time caused Elon Musk’s EV giant to become a one-trillion-dollar company.
However, Tesla’s market capitalization has since fallen by over $300 billion as the EV industry struggles to remain afloat.
Hertz is the largest car rental company in the country with a 36% market share. Its subsidiaries include Dollar and Thrifty. Together, Hertz, Enterprise Holdings, and Avis Budget Group control over 95% of the American car rental market.
“Hertz has hit reverse — and taken a big hit to its bottom line,” columnist Ed Morrissey wrote on Hot Air. “This move doesn’t come cheap for Hertz, either,” he went on:
They will take a $245 million charge to its Q4 earnings as a depreciation hit. That may continue for a while, as it may take all year to sell off the used EVs in a market where demand for new EVs has dipped dramatically.
Hertz states on its website that its “broad selection of electric vehicles lets you choose a greener way to travel.”
“Our innovative EV fleet options,” the site claims, “boast ample power and advanced features that make journeys comfortable and convenient. And with no tailpipe emissions, EVs are helping to make the air in our towns and cities cleaner.”
Morrisey concluded: “The truth is that EVs are a largely impractical choice for rentals as well as a more expensive option for the agencies. And as the nation’s largest car-rental company just found out, the truth Hertz.”
