Estero Group (Florida) explained in a document filed with the American Market Regulation Authority (SEC) that the purpose of selling these 20,000 vehicles is to “create a better balance between demand and supply forecasts for electric models.” Hertz said the operation would “eliminate a disproportionate amount of low-margin rentals and reduce maintenance costs associated with damage to electric vehicles.”
Disappointment
The rental company scored a major hit in October 2021 by announcing an order for 100,000 Tesla-branded cars, spread through the end of 2022.
The sale of its electric fleet segment will result in $245 million in depreciation, which will be included in the fourth quarter of 2023 accounting. Despite the sale, Hertz says it is committed to “executing its electric vehicle strategy.”
20,000 vehicles are for sale
Almost two and a half years after this communication, Hertz has only 60,000 electric vehicles, a fleet that will shrink by one-third. In its 2022 annual report published in February 2023, the group said it aims to make a quarter of its vehicle fleet electric by the end of 2024.
At the end of 2022, Hertz had approximately 550,000 vehicles worldwide.
Declining demand
Noting that demand isn’t growing as fast as expected, some American automakers have cut back on electric vehicles in recent months.
Although growing, the American market is penalized by falling gasoline prices, delays in the deployment of an adequate network of charging stations, and the still high purchase price of electric vehicles.
Very expensive maintenance
American Rental Company also condemns the excessive cost of parts in the event of a repair, especially with regard to body parts. However, rental cars are subject to numerous collisions and even more so when they are electric, as users do not necessarily use them.
