Hertz Gets Rid of Its Tesla Fleet

The Hertz rental company has put 20,000 Teslas from its fleet up for sale. The honeymoon between the rental company and electric vehicles has ended.

Just a few months ago, Hertz boasted that it had reduced the maintenance costs of its electric fleet by a factor of 5 compared to its combustion engine fleet, thanks to the reliability of its Teslas. Fewer breakdowns, fewer repairs, fewer driving errors, particularly related to the clutch and gearbox — happiness!

Hertz had become the ultimate electric vehicle rental company, distributing battery-powered vehicles en masse to business travelers, VTC drivers, and tech enthusiasts. To achieve this, the company had signed agreements with Tesla and Polestar to purchase nearly 200,000 electric vehicles. Tesla’s valuation even surpassed $1 trillion following this news.

But like many other aspects of the transition to electric vehicles, this plan encounters headwinds. Two months ago, Hertz announced it was slowing down the deployment of its electric vehicles, citing the decline in resale value of these models and the high repair costs. Repairs are reportedly about twice what the company spends on repairs for gasoline-powered cars, said Hertz CEO Stephen Scherr.

Part of the problem stems from Hertz’s decision to rent electric vehicles to VTC drivers. Of the 100,000 Teslas acquired by Hertz, half are in the hands of Uber drivers under an agreement with the company. And while drivers love their Teslas, they really do not take good care of them!

Hertz has already taken a step back, reassigning part of this fleet to the Consumer division, but the damage has been done.

This week, classified ads appeared on Hertz’s website offering Model 3s starting at $17,000! The first batches are selling like hotcakes, but models around $20,000 are still available. Hertz is following in the footsteps of Sixt, which also decided to part ways with its Tesla fleet.