NOT. TOO. GOOD.
Hertz is selling 20,000 electric vehicles to buy gasoline cars instead
Hertz, which has made a big push into electric vehicles in recent years, has decided it’s time to cut back. The company will sell off a third of its electric fleet, totaling roughly 20,000 vehicles, and use the money they bring to purchase more gasoline powered vehicles.Electric vehicles have been hurting Hertz’s financials, executives have said, because, despite costing less to maintain, they have higher damage-repair costs and, also, higher depreciation.
“[C]ollision and damage repairs on an EV can often run about twice that associated with a comparable combustion engine vehicle,” Hertz CEO Stephen Scherr said in a recent analyst call.
And EV price declines in the new car market have pushed down the resale value of Hertz’s used EV rental cars.
“The MSRP declines in EVs over the course of 2023, driven primarily by Tesla, have driven the fair market value of our EVs lower as compared to last year, such that a salvage creates a larger loss and, therefore, greater burden,” Scherr said.
Simply put, people are generally willing to pay a certain amount less for a used car than for a new one. As the price of new car goes down, that also pushes down what people are willing to pay to buy a used one.
Hertz expects to take a loss of about $245 million due to depreciation on the EVs, an average of about $12,250, per vehicle the company said in an SEC filing.
If you don’t already know it by now, you certainly should: Mike’s Iron Law #187: There’s always a workaround, and true Americans will always be able to find it. Flipping the big honking middle-digit salute at FederalGovCo like this counts as one of the very best examples I can think of.
On the other hand, though, watch now as the goobermint takes over the rent-a-car industry entire in retaliation. Who can say, maybe such a dick-move was the whole idea from the very beginning?