Hertz continues to sell off Tesla and other electric cars en masse
Hertz rental company announced that it will continue mass sales of Tesla and other electric cars until 2025. The company explained its decision by the significant depreciation of the electric car fleet.
Where it all started
In 2021, Hertz decided to convert some of its fleet to electric and ordered 100,000 Tesla Model 3s and later added the Model Y to the order. The deal initially led to a boost in the rental company's business, but that all changed when Tesla began slashing prices on the Model 3 and Model Y in 2022 and 2023. As a result, the market value of electric cars dropped significantly, which hit Hertz's profitability hard.
Back in 2020, the Model 3 retained up to 90% of its value over three years of use, but Tesla's recent price adjustments have caused the residual value of the electric sedans to drop by nearly 50%, and the Model Y is losing even more value in the aftermarket. To mitigate the losses, Hertz has already put 20,000 Tesla vehicles up for sale in early 2024.
It's not just Tesla
In recent years, Hertz has added not only Tesla to its fleet, but also electric cars from Polestar and General Motors. This week, the company unveiled its latest financial report, in which it said it aims to sell up to 30,000 electric cars by the end of 2024 and continue to sell off electric cars in 2025. Hertz believes it will completely revamp its fleet by the end of next year based on new market conditions and customer demand for electric car rentals.
Source: Bloomberg
