Hertz announced that it intends to sell one-third of its fleet of electric vehicles in the US and reinvest in gasoline-powered cars, due to weak demand and high repair costs for battery-powered models. The sale of 20,000 electric vehicles began last December and will continue throughout 2024, according to the rental car giant on Thursday. According to Automotive News, the company expects to record a non-cash charge in the fourth quarter results of approximately $245 million (about €223.8 million at current exchange rates) related to incremental net depreciation expenses.
In 2022, Hertz announced the acquisition of 100,000 Tesla vehicles, but the decrease in demand for fully electric cars in the US is the reason for the change in strategy. “We may have been ahead of ourselves”, commented Stephen Scherr, CEO of the company, in an interview with CNBC.
“The company expects this action to better balance supply with the expected demand for electric vehicles”, he added, explaining that part of the money raised from the sale of electric vehicles will be reinvested in the purchase of gasoline vehicles.
Analysts also argue that Tesla’s price cuts last year reduced the value of Hertz’s fleet vehicles, while it is also unclear whether American consumers will have interests in these models in the used car market.
