Hertz Shifts Gear: Electric Cars Out, Gasoline In Amidst Industry Slowdown

Rental Car Electric Car Sales

The electrification of the automobile sector is going through a difficult time. Everything indicates that interest in electric cars has fallen in recent months and Elon Musk’s latest statements, pointing directly to the slowdown in sales that has cost him a sharp drop in the value of his shares, only adds more fuel. to the fire.

As if this were not enough, one of the main rental car companies in the world has decided to reverse the electric cars in its fleet and is going to replace them with gasoline vehicles. This is Hertz Global Holdings, who are going to sell around 20,000 electric cars, including Tesla, from their US vehicle fleet.

The rent a car company Hertz is selling 20,000 electric cars

Reuters reported just a few days ago that Hertz intends to get rid of these cars just two years after reaching an agreement with Tesla to offer its vehicles for rent. According to the information agency, this is “another sign that demand for electric vehicles has cooled.”

To replace the gap that the sale of these 20,000 vehicles will leave in its fleet, Hertz intends to acquire cars equipped with gasoline engines, the company said a few days ago, citing the higher expenses related to accidents and damages in electric vehicles as another of the factors that have led the company to make this decision.

Hertz had a short-term goal of converting up to 25% of its vehicle fleet to electric cars by the end of this year. However, in 2023 the company’s CEO, Stephen Scherr, pointed out at the JPMorgan Auto Conference the obstacles arising from the increase in expenses for its electric vehicles, particularly Tesla cars.

In fact, the company even limited the engine torque and maximum speed of the electric vehicles in its fleet, offering them only to experienced users on the platform to facilitate their adaptation after several head-on collisions were recorded.

Consequence, among other problems, of the slowdown in sales of this type of vehicles

Hertz, whose shares fell 4% after this announcement, also expects about $245 million in charges related to depreciation expenses arising from the sale of electric vehicles in the fourth quarter of 2023.

The rent a car company is just one more case in the problems caused by the slowdown in growth in sales of electric cars, which is affecting even the world’s largest automobile manufacturers.

In fact, the German car rental company Sixt said in December last year that it had not purchased Tesla vehicles since 2022 and that it was selling those currently in its fleet of cars “as part of our usual fleet disposal process.” quotes Reuters.

Even so, it still plans to offer a range of electrified vehicles and “meet our goal of electrifying between 70% and 90% of our rental fleet in Europe by 2030.”