Hertz dumping 20,000 of its electric vehicles
Car rental giant Hertz this morning said it would sell 20,000 of its electric vehicles to buy more internal combustion vehicles, citing expensive repairs for its EVs.
Why it matters: The move marks an abrupt reversal by Hertz, which in 2022 announced plans to buy 165,000 EVs from Tesla and Volvo unit Polestar.
What they're saying: "Expenses related to collision and damage, primarily associated with EVs, remained high in the quarter, thereby supporting the Company's decision to initiate the material reduction in the EV fleet," Hertz said in a filing this morning to the SEC.
Of note: Hertz is writing down a $245 million loss with the move. The company declined to comment beyond the SEC filing.
Context: Repairing an EV after a collision in 2022 cost about 56% more than a conventional internal combustion vehicle, per a report last year from CCC Intelligent Solutions.
- The wait time for such repairs was also about 25% longer with an EV.
Our thought bubble: This is far from a death knell for EVs — but it's another example of how far the vehicles still have to go. And for a rental provider like Hertz, it makes sense that the higher repair costs and longer wait times were untenable.
- Figuring out charging infrastructure has also remained an expensive and time-consuming challenge for fleet operators of all types.
- We'll see how this impacts Hertz's broader EV plans, plus those by other rental providers.