Hertz Global Holdings Inc. said it will sell off 20,000 electric vehicles (EVs) due to weak demand and high repair costs.
“The elevated costs associated with EVs persisted,” Hertz Chief Executive Officer Stephen Scherr said in an interview. “Efforts to wrestle it down proved to be more challenging.”
The 20,000 vehicles represent one-third of the company’s EV fleet. The EVs will be replaced with gas-powered vehicles.
The about-face “underscores the waning demand for all-electric cars in the U.S.,” Bloomberg reported on Jan. 11. “EV sales growth slowed sharply over the course of 2023, rising just 1.3% in the final quarter as consumers were put off by high costs and interest rates.”
Team Biden had on more than one occasion praised Hertz for the company's public commitment to transition its fleet to EVs.
In March 2023, the White House highlighted Hertz's efforts and said the company was playing a role in "accelerating the EV transition." The fact sheet stated that Hertz, in addition to other private sector and public sector entities, would help ensure the Biden team's goal of having 50% of total vehicle sales be electric by 2030.
Last month, Team Biden said Hertz would help to guarantee federal employees were able to rent EVs when traveling. The White House guidance released at the time required federal government employees to prioritize using EVs, trains, and public transportation options when conducting official business.
In 2021, Hertz announced plans to buy 100,000 Tesla Inc. vehicles.
At last year’s JPMorgan Auto Conference, Scherr had said Hertz was struggling with higher expenses for its EVs, particularly Teslas.
Hertz limited the torque and speed on its EVs and offered them to experienced users on the platform to make them easier to adapt after some users had front-end collisions, Scherr said.
"Expenses related to collision and damage, primarily associated with EVs, remained high in the quarter," Hertz said in a regulatory filing on Thursday.
Hertz is selling some Tesla Model 3s for as low as $20,000, nearly half the purchase price for the cheapest variant of the compact sedan, its used car website showed.
Other EVs listed for sale include BMW's i3, Chevrolet's Bolt, and Tesla's Model Y SUVs.
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