Hertz continues to backtrack on its dedication to buy extra electrical automobiles for its rental automobile fleet, because the Monetary Instances stories that the corporate has paused plans to accumulate extra EVs from Swedish automaker Polestar.
However a bit greater than a yr later, Hertz had a change of coronary heart, principally as a result of its acquired EVs had misplaced most of their worth. Worth cuts (principally from Tesla), larger depreciation than anticipated, and spiraling restore prices have made EVs a nasty enterprise deal for Hertz. In complete, the corporate mentioned it anticipated to lose over $245 million on the agreements.
Hertz had a change of coronary heart
It’s a disappointing flip for Hertz, which had beforehand set a goal for 25 p.c of its fleet to be electrical by the tip of 2024. Final month, Hertz mentioned it will promote 20,000 Teslas, or roughly one-third of its electrical fleet. And now its cope with Polestar has been placed on pause.
Polestar CEO Thomas Ingenlath instructed Monetary Instances that he was contacted by Hertz CEO Stephen Scherr final fall concerning the pause. Between 2022-2023, the Swedish firm had bought round 13,000 automobiles, in keeping with Ingenlath.
Hertz additionally operates an “in danger” mannequin, through which it owns the automobiles it purchases outright, versus the “buyback” mannequin utilized by some rental corporations through which the producer agrees to reacquire the car at a set value.
Ingenlath instructed FT that Polestar agreed to waive the requirement to purchase all 65,000 automobiles so long as Hertz agreed to not unload its present inventory of EVs too shortly or cheaply. Certainly, whereas Hertz’s used automobile gross sales portal is brimming with Tesla Model 3s for round $20,000, there aren’t any Polestars presently listed.
To make certain, EV gross sales are nonetheless booming. Over 1 million plug-in automobiles have been bought within the US in 2023, which is a brand new document. And the whole share of the car market is just below 8 p.c, up from 6 p.c in 2022, according to Kelley Blue Book. Nonetheless, a lot of producers have gotten over their skis on EV investments, and demand is a bit softer than it was a number of years in the past. That’s why you’re seeing a lot of corporations pause or pull again on a few of their commitments — like Hertz.