The company specializing in vehicle rental, Hertz, announced Thursday its desire to sell 20,000 electric cars, including Teslas, although ordered en masse by the American.
The rental giant, Hertz, surprised everyone by announcing that it would abandon its 20,000 electric vehicles, including the famous Tesla, in favor of gasoline cars. This step back marks a notable turnaround in the company’s strategy, which hoped to convert 25% of its fleet to electric by the end of the year. In this regard, she had planned to order 100,000 cars from Elon Musk’s company. But why such a choice?
Hertz backtracks on electric and points the finger at Teslas, which cost too much in maintenance
Hertz justifies itself by citing higher expenses today, particularly linked to collisions and damage for electric cars, despite the company’s primary ambition to promote this electric mobility. Its CEO, Stephen Scherr, had already warned of the financial challenges of electric last year, highlighting the headwinds linked to maintenance costs, particularly for Tesla vehicles.
To stem the increase in frontal collisions, Hertz had already taken drastic measures by limiting the torque and speed of electric vehicles, reserving them for experienced users on the platform, to minimize the risk of accidents.
After the announcement of the sale of 20,000 electric cars, Hertz saw its stock plunge, just like that of Tesla. The car rental giant also expects charges of around $245 million related to depreciation expenses resulting from the sale of its electric vehicles last quarter.
Consequences on the second-hand market
The Hertz company’s decision reflects the uncertainty that reigns in the electric vehicle market, with sales growth particularly in France, which tends to slow down around the world, in the United States for example, where electric giants Automotive companies such as Ford and General Motors have scaled back their production plans.
And let’s add to this that the massive sale of 20,000 Hertz electric vehicles, particularly Tesla Model 3s at attractive prices, is impacting the second-hand market. Analysts also predict a drop in the prices of used electric cars, which will only reinforce the general trend of depreciation in their value.
If Hertz chooses a more pragmatic approach to improve the profitability of its fleet of electric vehicles, its German competitor, Sixt, has decided to exclude only Tesla cars from its fleet. It nevertheless seems that rental companies are at a turning point, which still promises good times for gasoline cars.
Source : Reuters
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