Back in 2021, Hertz announced a major effort to electrify its rental car fleet, led by a massive purchase of 100,000 Tesla Model 3 vehicles. More recently, the company added Model Y vehicles to the order.
The rental company's Tesla fleet has been growing over the past few years, and the company reported that Tesla vehicles are increasing Hertz's customer satisfaction.
Yesterday we reported that Hertz has started selling its older Tesla Model 3s. The prices for some of the vehicles were really good, like $14,000 for the Model 3 with the used EV tax credit.
Today, Hertz confirmed in a new SEC filing that it is selling about 20,000 electric vehicles, but it also added that it plans to use some of the proceeds from those EV sales to buy new gas-powered vehicles:
"Hertz Global Holdings, Inc. has made the strategic decision to sell approximately 20,000 electric vehicles from its U.S. fleet, or about one-third of the global EV fleet. These vehicle dispositions, which were initiated in December 2023 and are expected to take place in an orderly fashion over the course of 2024, will cover multiple makes and models.EVs held for sale will remain eligible for rental within the Company’s fleet during the sales process. The Company expects to reinvest a portion of the proceeds from the sale of EVs into the purchase of internal combustion engine vehicles to meet customer demand."
As Electrek explained, Hertz had bad timing with its EV purchase. It began buying its fleet of Tesla vehicles at peak prices, just before the automaker began slashing prices to create demand amid rising interest rates. It resulted in the value of Hertz’s Tesla fleet crashing.
Now, the company is expected to recognize “approximately $245 million of incremental net depreciation expense” related to the sale of its electric vehicles.
Hertz argued that it will continue its EV strategy despite this setback.
