Accidents with Tesla Cost Hertz Too Much

The Hertz rental company announced a reduction in its electric ambitions due to the skyrocketing repair costs of its Teslas.

The honeymoon period between Hertz and Tesla seems to be over. Just a few months ago, the car rental company boasted that it had reduced maintenance costs for its electric fleet fivefold compared to its thermal fleet thanks to the reliability of its Teslas. Fewer breakdowns, fewer repairs, fewer driving errors, especially related to clutch and gearbox issues—happy days!

Hertz had become the ultimate provider of electric vehicles, distributing battery-powered cars to business travelers, VTC drivers, and tech enthusiasts. To achieve this, the company signed agreements with Tesla and Polestar to purchase nearly 200,000 electric vehicles. Tesla’s valuation even exceeded 1 trillion dollars following this news.

But like many other aspects of the shift to electric vehicles, this plan faces headwinds. This week, Hertz announced it is slowing down the deployment of its electric vehicles, citing declining resale values of these models and the high repair costs.

Tesla has lowered its prices to boost sales amid a slowdown in demand and increased competition. Repair costs are also roughly double 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 lease electric vehicles to VTC drivers. Of the 100,000 Teslas acquired by Hertz, half are operated by Uber drivers under a partnership agreement. And while drivers adore their Teslas, they are not exactly careful with them!

Hertz has somewhat reversed course by transferring some of this fleet back to its Personal division, but the damage is done.

However, the company has not abandoned its zero-carbon goal for 2030. It also signed an agreement to acquire 65,000 Polestar vehicles. A comparative analysis of the figures between Tesla and Polestar fleets will be particularly interesting!

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