Hertz Abandons EV Strategy as Tesla Fleet Sells at Half Price

Hertz is conducting a significant sell-off of its Tesla fleet, offering unprecedented discounts on electric vehicles following what appears to be a costly miscalculation in its earlier purchase of 100,000 Tesla vehicles.

The rental company has been liquidating its Tesla inventory since last year, citing low customer preference for electric vehicles and high maintenance expenses. The situation has led to remarkable discounts, exemplified by a recent case shared on Reddit where a 2023 Tesla Model 3 was offered for $17,913, significantly below its retail price of $38,990. Hertz Corporation / Wikimedia

Hertz announced in January that proceeds from these sales would fund the acquisition of conventional gasoline-powered vehicles, marking a retreat from its previous ambitious goal of electrifying 25% of its fleet by the end of 2024. Pixabay

This shift comes despite earlier commitments, including a planned purchase of 65,000 EVs from Polestar announced in 2022. JustAnotherCarDesigner / Wikimedia

The company's financial performance has been challenging, with a larger-than-expected third-quarter loss and a $1 billion asset impairment charge due to declining fleet values. Former CEO Stephen Scherr acknowledged in April that the company faced significant "headwinds related to our electric vehicle fleet," announcing plans to sell 30,000 EVs by year-end. Pixabay

The company's SEC filing indicates the sales could result in approximately $245 million in losses due to value depreciation. The Tesla rental program, which included partnerships with Uber starting at $330 weekly, faced practical challenges including range limitations and charging infrastructure access. Uber Brand Team / Wikimedia